PESTLE Analysis Framework

Overview

• A management framework and diagnostic tool.
• Helps understand external factors impacting strategy and influencing business decisions.
• PESTLE is an acronym:
  • P: Political
  • E: Economic
  • S: Social
  • T: Technology
  • L: Legal
  • E: Environmental

Detailed Factors

Political

• Consider your country's government policies and political stability.
• Other factors include:
  • Tax implications
  • Industry regulations
  • Global trade agreements and restrictions

Economic

• Key factors include:
  • Exchange rates
  • Economic growth or decline
  • Globalization
  • Inflation
  • Interest rates
  • Cost of living
  • Labor costs
  • Consumer spending

Social

• Focus on trends such as:
  • Lifestyle choices
  • Cultural norms and expectations (career attitudes, work-life balance)
  • Consumer tastes and buying habits
  • Population demographics

Technology

• Rapid growth in technology impacts business.
• Respond to technological innovation in products and services.
• Other technological impacts include:
  • Data storage
  • Security levels
  • Disruptive technologies (smartphones, social networking, automation, robotics)
  • Increasing shift towards AI (Artificial Intelligence)

Legal

• The legal landscape is constantly changing, especially in the UK.
• Important to monitor:
  • Employment and labor law
  • Employment tribunal decisions
  • Changes in legislation
  • Health and safety regulations

Environmental

• Consider your business's direct impact on the environment.
• Governed by political sanctions on carbon emissions.
• Shift towards sustainable resources (e.g., wind turbines, recycling).
• Covers CSR (Corporate Social Responsibility) and ethical sourcing.
• Impacts procurement and supply chain management.

Application

• Once familiar with PESTLE factors, relate them to real-world scenarios.
• Assess risks specific to your industry sector.