Republic of the Philippines

Pangasinan State University

Bayambang Campus
COLLEGE OF TEACHER EDUCATION
Bayambang, Pangasinan
BACHELOR OF PHYSICAL EDUCATION
A.Y 2023-2024

A Written Report in IC 2 Entrepreneurship

PESTLE ANALYSIS
(Political, Economic, Social, Technology, Legal,
Environmental)

Prepared by:
Elizabeth C. Gabat
(BPED III-2)

Submitted to:
Ma’am Elisa Enrique
(IC 2, Instructor)
I. INTRODUCTION

All entrepreneurs utilize a marketing analysis to look at the external factor(macro)

issues that affect their current business or future business. It is an organization that
takes the time to create these studies and understands how to prepare for the future,
respond to market changes, and separate itself from competitors in order to keep up
with other businesses in the industry. The name of the study is an acronym that
describes the external factors. Those factors are Political, Economic, Social,
Technological, Legal and Environmental.

II. OBJECTIVES

At the end of the learning session, the following should be reflected among the
learners:

• discuss the PESTLE analysis approach and its importance to business;

• distinguish the advantages and disadvantages of PESTLE analysis;
• understand how the external factors impact the strategy in business decisions.

III. CONTENT

A PESTLE analysis is a management framework and diagnostic tool. The outcome

of the analysis will help you to understand factors external to your organization
which can impact upon strategy and influence business decisions.

PESTLE is an acronym for:

P = Political
E = Economic
S = Social
T = Technology
L = Legal
E = Environmental

1. POLITICAL- When looking at Political factors you will need to consider your
countries government policies and political stability. Other factors will include
tax implications, industry regulations and global trade agreements and
restrictions.

2. ECONOMIC- Economic factors will include exchange rates, economic growth

or decline, globalization, inflation, interest rates and the cost of living, labor
costs and consumer spending.
3. SOCIAL- 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.

4. TECHNOLOGY- 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? There are three main elements of this
factor to study: new technologies to produce goods and services, new
technologies to distribute goods and services, and new technologies to
communicate with target markets. Common innovations include automation,
increased funding for research and development, and technological awareness.

5. LEGAL- Shifts in the Legal landscape are constantly changing especially in the
UK. Employment labor 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.

6. ENVIRONMENTAL- Political sanctions now govern carbon emissions and a

move towards sustainable resources such as wind turbines and recycling. This
area also covers 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 included climate and weather,
geography, natural disasters, and trends in environmental activism.

HOW TO DO PESTLE ANALYSIS

Follow these steps:

• Identify the scope of the research. It should cover present and possible future
scenarios and apply to the industry and areas of the world in which the
business operates.
• Decide how the information will be collected and by whom. Identify more
than one person to gather data to bring diverse evidence and perspectives.
• Identify appropriate sources of information. You may find areas of PESTLE
are a bigger focus to your industry than others but exploring information for
all of them will give you a bigger view of the external environment.
• Gather the information – you can use the template below. Analyze the
findings.
• Mark each item in terms of importance in relation to potential risk to the
organization.
• Identify the business options to address the issues. Write a discussion
 document for all stakeholders.
• Disseminate and discuss the findings with stakeholders and decision makers.
Decide what actions need to be taken, and trends to be monitored.

ADVANTAGES AND DISADVANTAGES OF PESTLE ANALYSIS

Advantages:

• It’s a simple framework.

• It facilitates an understanding of the wider business environment. It
encourages the development of external and strategic thinking.
• It can enable an organization to anticipate future business threats and take
action to avoid or minimize their impact.
• It can enable an organization to spot business opportunities and exploit them
fully.

Disadvantages:

• Some PESTLE analysis users oversimplify the amount of data used for
decisions – it’s easy to use insufficient data.
• The risk of capturing too much data may lead to ‘paralysis by analysis’.
• The data used may be based on assumptions that later prove to be unfounded.
The pace of change makes it increasingly difficult to anticipate developments
that may affect an organization in the future.
• To be effective, the process needs to be repeated on a regular basis.

IV. CONCLUSION

As time passes by Entrepreneurs need to explore what are the new trend in the
market that will help them to be patronize by the future consumers. They need to
know what are the possible challenges for them to counterattack the possible
damage and turn it into success someday. PESTLE Analysis has a big contribution
in the business industry especially with the big companies and even those start-ups
companies. These strategies can help them identify what are the possible lacking and
need to improve when they want to start a business.

V. REFERENCES

https://www.shopivo.com/blog/writing/how-to-write-a-pestle-analysis-to-examine-
factors-that-affect-your-business/

pestle-analysis-factsheet_20221230T092611 (PDF)
Business Model Design

- Is a critical aspect of building a successful business. A business model defines

the strategy and structure of a company and provides a framework for decision-
making. It is an essential tool entrepreneurs, and managers use to create value,
generate revenue, and manage costs. A well-designed business model helps
companies to achieve their goals, attract investors, and stay competitive in a
constantly changing market.

- Designing a business model involves structuring the various elements and

components of a business to ensure its profitability and sustainability.
Here are some steps to guide you in designing your business model:

1. Identify your target market: Start by clearly defining the demographic,

geographical, and psychographic characteristics of your target customers.

2. Define your value proposition: Determine the unique value or benefit that
your business will offer to customers. This could include a superior product or
service, competitive pricing, convenience, or excellent customer service.

3. Choose a revenue model: Decide how your business will generate revenue.
There are several revenue models to consider, such as product sales, subscription
fees, licensing, advertising, or commission-based models.

4. Assess your cost structure: Analyze the costs associated with running your
business, including production costs, marketing expenses, overhead costs, and
any other operational expenses.

5. Develop a distribution channel: Determine how you will deliver your product
or service to your target market.

6. Establish strategic partnerships: Identify potential partners and suppliers that

can help enhance your business model.
7. Manage customer relationships: Determine how you will build and maintain
relationships with your customers. This could involve providing excellent
customer service, offering loyalty programs, implementing a CRM system, or
using social media and other digital channels to engage with your customers.

8. Evaluate and refine: Once your business model is implemented, continuously

evaluate its effectiveness and make necessary adjustments based on customer
feedback, market trends, and financial performance.

SUMMARY

Remember, designing a business model is an iterative process that requires

ongoing analysis and adjustment. By focusing on your target market, value
proposition, revenue model, cost structure, distribution channels, partnerships,
customer relationships, and continuous evaluation, you can create a robust and
sustainable business model.