Purpose
When you take part in an organisation’s strategic decision making, you need as much data as possible. A PESTLE Analysis provides this.
A PESTLE Analysis gives you a full understanding of the conditions in which your organisation is working. It uncovers the risks of expanding or withdrawing from a particular market. And it gives you the facts and figures to help you decide on the best direction your organisation should take.
How to Use PESTLE Analysis
PESTLE stands for the following:
- Political
- Economic
- Sociological
- Technological
- Legal
- Environmental
One of the best ways to start a PESTLE Analysis is to brainstorm about your organisation using the above as your guide. Any such brainstorming session should ideally involve a number of people. You can then feed different views into the process. This makes a PESTLE Analysis more relevant and effective.
- Political. Consider the politics of your business environment. Discuss changes to relevant taxes and tariffs. Assess proposed political changes that may affect your organisation.
- Economic. Talk about how the economy is currently performing. Study issues that have an impact on your organisation such as currency rates; inflation; unemployment; interest rates; and the willingness of banks to extend credit.
- Sociological. Social changes may influence the markets in which you sell your products and services. Look at issues such as health and safety; climate change; people’s attitude to jobs; the growth or decline in population; changes to life expectancy; and consumers’ expectations.
- Technological. Technology is still advancing rapidly. Consider how technology is relevant to your organisation. Is it opening new markets? Is it giving you opportunities to outsource your work?
- Legal. Review current and pending legislation. Ask how changes in UK, EU and international law may affect taxes, trade and employment.
- Environmental. Discuss how the world’s ecology is prompting social and economic changes. Are these changes providing you with threats or opportunities?
At the end of the brainstorming session, ask the participants to support the topics you’ve discussed with data. Then complete a PESTLE template.
The template should follow the six categories outlined above. Write down summaries and facts. Once you’ve done this, highlight priorities and options.
Loading ...