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PESTLE explained

The PESTLE acronym stands for Political, Economic, Social, Technological, Legal and Environmental factors.

PESTLE framework is a tool to analyse and monitor the macro-environmental factors that have an impact on a company and the industry environment in which it operates.

A PESTLE analysis is often used with other tools such as the SWOT analysis to give a clear understanding of internal and external factors affecting a business.

Create your own PESTLE analysis by consulting a variety of sources in order to learn as much as possible about a company and the industry environment in which it operates.

How do I find PESTLE resources?

To what degree does the government intervene in the economy? The political environment can affect a company or industry through a range of factors, including:

  • government policy
  • political stability or instability in overseas markets
  • trade tariffs and taxation

Economic factors have an impact on how business is conducted within a country and can include:

  • economic growth patterns
  • unemployment rates
  • interest rates

Also referred to as socio-cultural factors. These factors include:

  • population demographics (e.g. aging population)
  • changes in lifestyles and trends
  • consumer buying patterns

Technological innovations may affect the operations of an industry and have either a positive or negative affect on the market. Technological factors can include:

  • new discoveries and innovations
  • Research and Development (R&D) activity
  • rate of technological obsolescence

The legal and regulatory environment can affect the policies and procedures of an industry, and can control employment, safety and regulations. Common legal factors that companies focus on include:

  • industry specific regulations
  • health and safety regulations
  • employment regulations

Environmental or ecological factors that can impact an industry include:

  • global changes in climate affecting crop production and supply
  • environmental-protection laws
  • waste disposal and energy consumption