2.1 PEST Analysis Case Study

Omar runs an art gallery where he makes various sculptures and paintings and sets them up for sale. He also handles commissions in addition to his own artwork. Omar started to get worried about his business and felt the need to examine the factors that might have effects on the business. He chose the PEST tool to do so.

First, he needed to address the Political factors.

He was pleased to hear that his art is protected under copyright law and that he can recreate it as he pleases without it being stolen. However, he also learned that he may not recreate artworks and posters made by other creators unless he is being directly commissioned.

When examining the Economic factors, he found that:

The expected upcoming growth of the economy would be beneficial to his gallery as people are less likely to invest in art if they don’t have all of their other needs met.

Upon looking into the social factors, he found that:

The majority of the upper-class segment who are willing to buy his products has an increasing positive attitude towards art. He also found that he could cater to their interests as the attitude towards fiction, superhero movies and shows has become more positive. 

When assessing the technological factors, Omar found that new advancements in 3D printing technology created a demand for more intricate artwork.

Omar then took all those points and identified his growth opportunities. Among other strategies, he considered replicating figures and mass producing them via 3D printing. He planned to expand into new areas where his upper-class customers are residing.

Advantages and Disadvantages:

PEST Analysis helps you spot business opportunities and highlights potential threats. It shows you where your business stands compared to other businesses in the same industry. Moreover, it helps you minimize the risk of failure. However, the external factors in this analysis are dynamic and can change at a very fast pace. As such, a certain amount of uncertainty remains after carrying out a detailed analysis. Also, its simple presentation can be deceptive if you don’t critically examine its impact and findings. It is sufficient for strategic planning since it only examines the external environment and ignores the internal one as well as ignores the competitive scenario.