Why PEST does not work as an analysis tool for a developing sector


Image001

PEST analysis  Political, Economic, Social and Technology is a basic framework for strategy development.  Old but does the job.  Just been doing some work on digital footprint strategies for a developing sector [think - new digital markets not BRIC]

PEST has a limitation that it does not allow you to present or think about the wider implications of digital data and the radical changes on business models.  The analysis tool falls apart when thinking about information silos and the scenarios that are being presented.  Porters 5 forces model does no better.

Scenario planning as a framework allows you to engage, but depends on understanding the drivers for change – miss one key scenario or develop one that the board does not like, approve, engage or understand and the implications could be significant. 

The frameworks that boards are working with (or we are asked to work with or told to work with), as they know and understand them, do not appear to powerful enough to provide the insight and analysis for Digital Data/ Digital footprint implications.  Dilemma:  do you ignore it, walk away, try again and again, reframe the problem, introduce complexity or inform the shareholders?