Certified Professional in Talent Development (CPTD) 2025 – 400 Free Practice Questions to Pass the Exam

PEST analysis is a strategic tool used to assess the external macro-environmental factors that can impact an organization. The correct answer focuses on the specific categories that PEST stands for: Political, Economic, Social, and Technological.

Political factors encompass government policies, regulations, and legal issues that can affect the market environment. Economic factors analyze the economic conditions, including inflation rates, interest rates, and economic growth that can influence an organization’s operations. Social factors consider the demographics, cultural trends, and consumer behaviors that can impact demand for products and services. Lastly, technological factors involve the influence of technology advancements, innovation, and changes that can affect industry practices and competition.

By examining these four categories, organizations can gain a comprehensive understanding of their external environment, which aids in strategic planning and decision-making. The other choices present different sets of factors that do not align with the established PEST framework.