Combining PEST analysis with Porter's 5 forces

[Spunky]

Can anyone tell me how to combine these two? They are both external environmental scans, right?So what is the difference? And how to combine those two? Can anyone give an example?

[steven]

Hey, I am not quite sure why you would want to combine these two models, can you provide more details, pls? You are correct in that both models relate to external environment; however, they differ in the micro/macro scope. While the PEST analysis relates to macroenvironment (ie. "how the environment affects me and my peers"), the Porter's 5 forces model relates more to microenvironment (ie. "how the environment affects me and me"). Compare the following:


PEST analysis (external, macro)

Political factors
Economic factors
Social factors
Technological factors


Porter's 5 forcer model (external, micro)

Barriers to entry
Threat of substitutes
Bargaining power of buyers
Bargaining power of suppliers
Rivalry among the existing players