If you know the enemy and know yourself,

you need not fear the result of a hundred battles.

If you know yourself but not the enemy,

for every victory gained you will also suffer a defeat.

If you know neither the enemy nor yourself, 

you will succumb in every battle 

 ~ Sun Tzu, The Art of War, Special Edition

PEST analysis is a strategic business measurement tool.
PEST is an acronym for Political, Economic, Social and Technological factors.
These factors are primarily external factors which are used prior to doing a SWOT analysis (which is used to assess both internal and external factors).
PEST is used to assess business/strategy planning, marketing positioning, business and product development, product introduction, new idea, business diversification or to review the strategy or position of a organization.
There are variations to the PEST analysis like the PESTLE (includes Legal and Ecological/Environmental)
There are many situations where systematic PEST analysis gives clarity about the external factors which can affect the decisions such as :

• Brand in relation to a market
• Product Launch
• Merger and Acquisition
• Entering a new market
• Potential Partnership
• Investment opportunity
• Company assessing the market conditions
• Product versus competition

More Strategic Frameworks here.