Solidus has taken the traditional PEST (Political, Environment, Social, Technology) analysis a stage further and developed InSPECT to facilitate development of business strategy.
They make the point that innovation is a key capability for business in a fast changing world. InSPECT builds creativity and new ideas into the analysis to inform the development of business strategy.
Innovation is so important it comes first. It is not possible to achieve a real competitive edge without genuine creativity. This is not just about new technology but is all pervading. It should apply to all aspects of business from product or service design through business processes, administration and operations to customer service and marketing.
Social issues need to be considered, as no organisation operates in isolation from the community it serves or in which oit operates. Environmental matters are much more important to the organisation's image and brand value now than it was even a decade ago. It will continue to grown in importance with global warming and pressures on commodities especially energy, in particular oil.
Along with regulatory issues will always have an impact on even the most insular of organisations. They impact on the regulatory framework, tax, bureaucracy or reporting and even the nature of the product and services. Even a changes of foreign government can have an impact through customer and supply chains or on the availability and pricing of key commodities.
Economic environment is obviously crucial to the strategy that a business will adopt. It changes the nature and volume of the services or products purchased.
Communication plays a major role in an increasingly connected world. It has enabled call centres to be exported half way round the world. Higher value work is now routinely being outsourced to developing markets in India, China and South America. Africa will eventually follow. Knowledge workers collaborate across time zones often with people they have never met. Help desks now pass support issues from office to office following the sun around the world.
It is not just the Internet or telecommunications that is changing the world. Traditional communications such as rail, air and sea transport are also in flux; for example cheap air travel has arrived but is under pressure from the environmental lobby and the volatility of the oil price.
Technology is important in many areas of business strategy. It can be the technology used in the product, in its manufacture or distribution. It can be technology used in support functions - for example research databases or the technology used to collaborate globally which of course overlaps with communication. The only proviso is that the technology should serve an appropriate orgnaisational need and deliver business benefit rather than be technically led.