PESTLE Analysis is an analytical tool which helps in understanding external influences on a business. There always are several macro-environment factors that affect different strategies of the business. These factors affect the business and cannot be controlled directly. They often have long-term effects on the running of the business. This tool helps us understand the stresses and threats that the organization could be working under so that we are better prepared to handle them.
PESTLE stands for
Political factors including government interference have a big impact on the running of the organization. A lot depends on the way Government supports the economy. Factors like stability in national and international markets, policies, labour laws, foreign trade policy etc, create big impacts.
Economic factors affect the profitability of the business. Factors like exchange rates, interest rates, inflation, economic growth rate etc. affect the business. There are macro-economic factors and micro-economic factors. Macro-economic factors deal with the management of demand. Micro-economic factors are all about spending income and habits of people.
Every organization is affected by socio-cultural factors like population, human resource, work ethics, age distribution, an influence of advertising and marketing etc. They affect the markets.
Technological landscape constantly evolves and it affects the business. There are innovations, technological barriers, issues of maturity of the technology, research, and innovation – to be taken into consideration.
Laws, regulations, and legislation under which the business operates are the legal factors that affect the functioning of the business. National-international legislations, health, and safety, consumer rights and laws, all come under its ambit.
For a business to be an ethical and sustainable entity it is necessary that it takes all the environmental and ecological factors into consideration. These factors affect the operations of the business. The stress is always on reducing the carbon footprint. One needs to keep weather conditions also in consideration.
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This Infographic template has been created around the marketing/management concept of “PESTLE Analysis”. All you need to do is download the pestle PSD template directly to your computer and edit it with your choice of words.