PEST analysis is one of the most popular and simple strategic management analysis of organization’s background. It is based on Macro environment, which contains four external forces: Political, Economic, Social and Technological.

Macro environment has a significant effect on business entities’ activities, likewise these forces are independent from enterprise. By reason of rapid change company has to continuously observe trends and environmental factors.

• Political. The first element of a PEST analysis is a study of political factors which could create plenty of advantages and opportunities for organizations. These factors include: political situation, political stability, state legislation, market regulations, state interference, trade agreements, tariffs or restrictions, taxes, lobbying and clarity of law, and other legal factors affecting business.

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• Economical. The second aspect of PEST analysis is focused on economic factors. National interest rates and fiscal policy is set around economic conditions, besides has influence on purchasing power of consumers and structure of their expenditure. These factors include: gross domestic product (GDP) creating by demand, stock quote, currency rate fluctuations, rate of inflations, market substitutive and complementary, tax policy, price changes, revenues, savings and level of unemployment.

Fig. 1. PEST analysis framework

• Social. The third element of a PEST analysis is study about society. Social forces influence our attitudes, interests, opinions, moreover create our behavior and ultimately what we purchase. Trends’ changes have correspondingly direct impact on enterprises. These factors contain: structure of population, falling rates, competition, increase of global population, traditions, level of education, cultural diversity and standards.

• Technological. The fourth element of PEST is technology. Technological advances have greatly changed the manner in which businesses operate. Nowadays technological progress created a society which expects instant results. Here we can mention: new technologies, absorptive capacity for innovation, globalization. New technologies shorten Product life cycle and increase demand for new products. This revolution has increased the rate at which information is exchanged between stakeholders. A faster exchange of information can benefit companies as they are able to react quickly to changes.

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Above mentioned external environment factors, can have both positive influence (then they are called opportunities) or negative influence (and then they are called threats). Theory and practice of management science led to the development of many variants of strategic external environment analysis. Most notable and worth mentioning are: PESTEL analysis, PESTLE analysis, STEEP analysis, STEPLE analysis.