PESTLE analysis

Aims

• Prepare a PESTLE analysis for a given situation and use it to analyse the impact of the external environment on a firm.

• Evaluate the impact on a firm’s objectives and strategy of a change in any of the PEST/PESTLE factors.

What is it?

• It’s a way of working out what is going on ‘out there’ so you can then respond to it.

POLITICAL

• Environmental protection/legislation• Consumer protection• Government’s attitude• Competition regulation• Advertising standards

Economic

• Economic growth• Taxation international trade• Exchange Rate• Employment law• Health and Safety law• Inflation• Consumer confidence• Minimum wage

Social• Income distribution• Demographics• Labour & Social mobility• Lifestyle changes• Attitudes to work and leisure• Education• Fashion and Fads• Health & Welfare• Living conditions

Technological

• Changes in physical sciences• Internet• Energy use and costs• Rates of technological obsolescence• New discoveries• Govt and Industry focus on tech• Govt spending on research

Legal

• Employment law• Health and Safety• Taxation both corporate and consumer• Other regulations• International trade barriers• Strength of the rule of law

Environmental

• How people’s perception and reaction to environmental issues can affect a business.

Exam tip

• Remember it is not enough to identify the factor, you must say why it is where it is.

Task

• In pairs you will be given a company to prepare a PESTLE analysis for.

• Both pairings and the task will be decided randomly!

Task

• The first job is to research some issues and background about the company.

• Where am I going to get this info?

• This will require a bit of thought and subtlety on your part. You must go beyond the obvious!

Task

• Brainstorm the PESTLE with your partner.• Work out how you are going to present

this information.

• Remember it is not enough to identify the factor, you must say why it is where it is.

Task

• Write a short piece explaining how the firm should exploit/avoid some of the issues you have identified.