PESTEL Analysis

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Year 9 ::: Business IT ::: PESTEL Analysis

• ByLesson
the end of Objectives
this lesson you will have learned:
• What we mean by PESTEL Analysis (also known as PESTLE
Analysis)
• Why businesses use PESTEL Analysis
• How to create a PESTEL Analysis

Year 9 ::: Business IT ::: PESTEL Analysis

PESTEL
• Political
• Economic
• Social
• Technological
• Environmental
• Legal

Year 9 ::: Business IT ::: PESTEL Analysis

 What is a PESTEL Analysis?
• A PESTEL Analysis is a managerial tool or framework that can be
used to help make strategic decisions by assessing the macro-
environmental factors that may have a profound impact on
performance.
• Businesses can see potential risks to their industry and can
adapt accordingly.
• Businesses can respond to new trends and exploit opportunities.
• It may be used to decide what marketing strategies to use.
• It helps a business to succeed and thrive within a competitive
environment.

Year 9 ::: Business IT ::: PESTEL Analysis

Political
• Can help a business predict potential regulatory threats
• Any influence that a government has on a business is taken into account
here
• Government policy
• Political stability and instability
• Foreign trade policy
• Tax policy
• Labour laws
• Trade restrictions
• The government may also have impact on education, health and the
infrastructure of a country. These can impact on businesses.
Year 9 ::: Business IT ::: PESTEL Analysis
Economic
• Organisations can see where market sectors are slowing
down or picking up
• Exchange rates
• Inflation
• Interest rates
• Unemployment rates
• Median household income
• Credit accessibility

Year 9 ::: Business IT ::: PESTEL Analysis

Social
• Businesses can understand changes in their consumers
and adapt accordingly
• Education standard
• Age distribution
• Population growth rates
• Religion
• Buying habits
• Income distribution

Year 9 ::: Business IT ::: PESTEL Analysis

Technological
• Businesses can identify technological risks and opportunities
• Technology incentives
• Technological obsolescence
• Automaton opportunities
• Technological awareness of the market
• Capacity for research and development
• Mobile technology and the consumers‘ access to mobile tehnologies
• Communication and Internet infrastructure
• New technological platforms
Year 9 ::: Business IT ::: PESTEL Analysis
Environmental
• Organisations can plan how they will adapt
• Availability of raw materials
• Pollution and carbon footprint targets
• Weather and climate
• Renewable energies
• Waste disposal laws
• Consumer attitude towards the environment

Year 9 ::: Business IT ::: PESTEL Analysis

 Legal
• Businesses can avoid fines and other sanctions if they
understand the legal environment that they are working in
• Health and safety regulations
• Employment laws
• Copyright laws
• Consumer protection laws
• GDPR / Data Protection

Year 9 ::: Business IT ::: PESTEL Analysis