PESTLE Analysis is a technique used for analysing the external environment surrounding an organisation when investigating business change. PESTLE is an acronym which stands for Political, Economic, Sociological, Technological, Legal, Environmental. The factors identified could be items that help the organisation or hinder it.
The technique is used to help identify factors involved in change rather than solutions to any of the factors. The factors we identify should be:
There are several variations on PESTLE Analysis:
The important element to the technique is considering all the areas of the technique rather than painstakingly classifying a factor. When considering each factor you need to identify what the factor is and what the impact will be on the business. The elements of this technique are introduced below.
Any factors in the political environment either in the home country or international arena. Examples of these could be government initiatives or changes of policy which affect the organisation.
Any factors in the financial arena. These could include economic downturns, availability of bank loans.
Factors which affect the social aspects related to the customers of the organisation including social trends, the change in demographics of our customers and any other socio-cultural factors.
Any changes in the technical world which may cause some impact on the organisation. New technological developments, new software, new devices etc are all factors to consider.
Legal issues often begin with examining any legislative issues in the home country and expanded to other countries depending on the business' international offerings. Legal issues may include distance selling laws, data protection, health and safety etc.
Environmental factors look at the world around the organisation and any factors which may have an impact on the environment. Examples include the use of plastic bags for goods, using vehicles for transporting goods and the pollution impact of these.
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