Reading: Using PESTE for Context Analysis

Using PESTE for Context Analysis

In summary, context analysis represents a written plan that outlines the key, relevant, future, external trends that might affect the industry in which a business operates.

To write a context analysis, one of the easiest ways is to use another very common sub-framework called “PEST”. PEST stands for:

• Political Trends
• Economic Trends
• Social Trends
• Technological Trends

Nowadays, PEST is most commonly expanded to include other common factors, notably Legal Trends (or Legislative Trends) and Environmental Trends (or Ecological Trends). So you may see the same framework written as PESTE, PESTEL or some other form, such as TEPLS, which places Technological Trends first for industries such as digital marketing.

For MRKTG101, we omit Legal Trends as these can be complex and very specific to particular industries, so we use PESTE.

When writing a context analysis, you should write a single sub-section for each of P, E, S, T, and E. The rules of each of these sub-sections are the same as for context analysis overall: you should discuss trends relating to the industry in which the business operates (not relating to the business itself), trends relating to the future (not something that happened in the past), and you should include only relevant trends.

By completing the most relevant points for the specific industry under each of P, E, S, T, and E, you will have a simple but useful context analysis.

IMPORTANT:

1. Remember that this is a researched analysis, not a personal opinion. You may well know some of the current trends, because you’ve seen it in the news, read it online, or discussed it with your friends. To turn those opinions into useful facts, it is essential that each point you make is researched and backed up through citations to the information you found.
2. Many of these trends are proven through data. Wherever possible, you should include specific figures and data that prove the trend you are discussing. For example:”New Zealand is experiencing high inflation in 2023, which puts pressure on households’ ability to spend, but there are signs that inflation will fall in 2024 (Stats NZ, 2023).”
3. In addition to naming the trend, (e.g. “New Zealand is experiencing high inflation”) it is important to interpret that trend for the industry in question. In other words, say what this will mean for the industry in the future. For the kiwi industry for example:”New Zealand is experiencing high inflation in 2023, which puts pressure on households’ ability to spend, but there are signs that inflation will fall in 2024 (Stats NZ, 2023). This means that we may see people beginning to spend more on fruits and vegetables in the coming year.”