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Supply Chain Glossary

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PEST Analysis

Source: Procurement Glossary
Author: Paul Rogers
Institute: CIPS - UK

Courtesy of


PEST analysis involves is the systematic exploration of the political, economic, social and technological environments that may have an impact on an organisation or a supply market.  The acronym is sometimes expanded to PESTLE, which adds ‘legal’ and ‘environment’ to the list of domains reviewed.  The purpose of the analysis is to identify the key drivers of change in the market, and anticipate how they may interact to affect the future evolution of the market.  For example, a rise in inflation in China may fuel expectations of increased wages among workers in China’s east.  As these workers seek higher wages to meet their needs and expectations, some suppliers may need to increase prices, reducing their competitiveness compared to that of other low cost economies.  STEER analysis is similar, simply reflecting a more contemporary definition of the factors to be analysed: socio-cultural, technological, economic, ecological, and regulatory.



















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