PESTLE Analysis is an analytical tool for strategic business planning.
PESTLE is a strategic framework for understanding external influences on a business.
Macro-environment factors includes all the factors that influence an organization, but are out of its direct control.
Macro-environment factors tend to have a long term impact.
PESTLE stands for "Political, Economic, Social, Technological, Legal and Environmental" and is used for business and strategic planning, marketing planning, organizational change, business and product development and research reports.
By understanding these external environments, organizations can maximize the opportunities and minimize the threats to the organization.
PESTLE analysis answers 6 key questions:
Political - What are the political factors that are likely to affect the business?
Economic - What are the economic factors that will affect the business?
Sociological - What cultural aspects likely to affect the business?
Technological - What technological changes that may affect the business?
Legal - What current and impending legislation that will affect the business?
Environmental- What are the environmental considerations that may affect the business?
Political factors relates to the pressures and opportunities brought by political institutions and to what degree the government policies impact the business.
- Government policies
- Government term and change
- Trading policies
- Funding, grants and initiatives
- Lobbying and pressure groups
- Wars, terrorism and conflicts
- Elections and political trends
- Internal political issues
- Inter-country relationships
- Local commissioning processes
Economic factors relates to economic policies, economic structures and to what degree the economy impacts the business.
- Local economy
- Economy trends
- Seasonality issues
- Industry growth
- Import/export ratios
- International trade
- International exchange rates
Social factors relates to the cultural aspects, attitudes, beliefs, that will affect the demand for a company's products and how the business operates.
- Media views of the industry
- Work ethic
- Brand, company, technology image
- Lifestyle trends
- Cultural Taboos
- Consumer attitudes and opinions
- Consumer buying patterns
- Ethical issues
- Consumer role models
- Major events and influences
- Buying access and trends
- Advertising and publicity
Technological factors relates to the technological aspects, innovations, barriers and incentives, and to what degree these impact the business.
- Emerging technologies
- Maturity of technology
- Technology legislation
- Research and Innovation
- Information and communications
- Competitor technology development
- Intellectual property issues
Legal factors relates to the laws, regulation and legislation that will affect the way the business operates.
- Current legislation
- Future legislation
- International legislation
- Regulatory bodies and processes
- Employment law
- Consumer protection
- Health and safety regulations
- Money laundering regulations
- Tax regulations
- Competitive regulations
- Industry-specific regulations
Environmental factors relates to the ecological and environmental aspects that will affect the demand for a company's products and how that business operates.
- Environmental regulations
- Ecological regulations
- Reduction of carbon footprint
- Impact of adverse weather
PESTLE Analysis is also known as ETPS, PESTEL, PESTLEE, PESTLIED, SLEPT, STEP, STEPE, PEST-G, PEST-E and STEEPLE, and is used for business and strategic planning, marketing planning, organizational change, business and product development and research reports. By understanding these external environments, organizations can maximize the opportunities and minimize the threats to the organization.