GET THE ANALYSIS RIGHT!

In one of my recent talks with a fresh Junior Marketing Officer, he mentioned:

“..and I could finally put together a pretty nice file on measuring our market  by only using  SWOT Analysis, I am certain that my Executives will be impressed …..”

“The SWOT Analysis for measuring the market?!” I asked.

Well, it was clear that this officer was a bit confussed with what he might have heard or learnt in some inadequate business classes or that he was not well explained and supervised on the task at hand.

What is actually required to measure a market is rather the PEST Analysis.

PEST is an acronym for Political, Economic, Social and Technological factors, which are used to assess the market for a business or an organizational unit.

The PEST Analysis headings are a framework for reviewing a situation, and similarly to SWOT Analysis, it can be used to review a strategy or a position, or the direction of a company, a marketing proposition, or an idea.

You are recommended to use PEST Analysis for business and strategic planning, marketing planning, business and product development and research reports. As PEST elements are ‘external’, completing a PEST analysis is helpful prior to completing a SWOT analysis. (Strengths, Weaknesses, Opportunities, Threats, which are based on half internal and half external elements).

Note that while a ‘PEST Analysis measures a market’; a SWOT Analysis measures a business unit, a proposition or an idea.

The PEST Analysis needs to primarily address:

  1. How a company/a service is looking at its market;
  2. How a product is looking at its market;
  3. The relation of a brand to its market;
  4. A local business unit in context of its market;
  5. The strategic options, e.g entering a new market / launching a new product;
  6. The possible or potential acquisition;
  7. The potential partnerships;
  8. The investment opportunities.

Final note for Senior Executives:  Make sure you describe both ‘subjectivity’ and ‘objectivity’  for the PEST Analysis to your staff as clear as possible so that everybody who contributes to the Analysis as well as those who read it have a  clear picture and proper understanding of the outcome and its assessment.

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