PESTLE Analysis
• A PESTLE analysis studies the key external factors (Political, Economic,
Sociological, Technological, Legal and Environmental) that influence
an organisation.
• A PESTEL analysis is a framework or tool used by marketers to analyze
and monitor the macro-environmental (external marketing
environment) factors that have an impact on an organization,
company, or industry. It examines the Political, Economic, Social,
Technological, Environmental, and Legal factors in the external
environment. A PESTEL analysis is used to identify threats and
weaknesses which are used in a SWOT analysis.
PESTLE
• The outcome of the analysis will help you to understand factors
external to your organisation which can impact upon strategy and
influence business decisions.
• The PESTLE tool: PESTLE is an acronym for:
• P = Political
E = Economic
S = Social
T = Technology
L = Legal
E = Environmental
PESTLE Analysis
• When looking at Political factors you will need to take into account
your countries government policies and political stability. Other
factors will include tax implications, industry regulations and global
trade agreements and restrictions.
• Political factors include government policies, leadership, and change;
foreign trade policies; internal political issues and trends; tax policy;
regulation and de-regulation trends.
PESTLE Analysis
• Economic factors will include exchange rates, economic growth or
decline, globalisation, inflation, interest rates and the cost of living,
labour costs and consumer spending.
• Economic factors include current and projected economic growth;
inflation and interest rates; job growth and unemployment; labor
costs; impact of globalization; disposable income of consumers and
businesses; likely changes in the economic environment.
PESTLE Analysis
• Social factors look at trends such as lifestyle factors, cultural norms
and expectations such as career attitudes and work-life balance. It
also concerns itself with consumer tastes and buying habits as well as
population demographics.
• Social factors include demographics (age, gender, race, family size);
consumer attitudes, opinions, and buying patterns; population
growth rate and employment patterns; socio-cultural changes; ethnic
and religious trends; living standards.
PESTLE Analysis
• Technology has grown exponentially. How is your business responding
to technological innovation in your products and services? Other
technological advancements will impact on data storage, disruptive
technologies such as smartphones, social networking, automation
robotics and the increasing shift towards AI artificial intelligence?
• Technological factors affect marketing in (1) new ways of producing
goods and services; (2) new ways of distributing goods and services;
(3) new ways of communicating with target markets.
PESTLE Analysis
• Shifts in the Legal landscape are constantly changing especially here
in the UK. Employment labour law and employment tribunal
decisions impact upon working practices continuously. It is also
important to keep up to date with all changes in legislation and of
course Health and safety regulations.
• Legal factors include health and safety; equal opportunities;
advertising standards; consumer rights and laws; product labeling and
product safety.
PESTLE Analysis
• Does your business have a direct impact on the environment?
Political sanctions now govern carbon emissions and a move towards
sustainable resources such as wind turbines and recycling. This area
also covers CSR corporate social responsibility and ethical sourcing of
goods and services which in turn has a direct impact on procurement
and your businesses supply chain management.
• Environmental factors are important due to the increasing scarcity of
raw materials; pollution targets; doing business as an ethical and
sustainable company; carbon footprint targets.