a purseful analysis is a management framework and diagnostic tool the outcome of the analysis will help you to understand factors external to your organization which can impact upon strategy and influence business decisions Nestle is an acronym for P political II economic s social tea Technology L legal and E environmental let's look at each of these factors more closely political when looking at political factors you will need to take into account your country's government policies and political stability other factors will include tax implications industry regulations and global trade agreements and restrictions economic these factors will include exchange rates economic growth or decline globalization inflation interest rates and the costs of living labor costs and consumer spending when looking at social factors look at trends such as lifestyle choices cultural norms and expectations such as career attitudes and work-life balance it also concerns itself with consumer tastes and buying habits as well as population demographics technology has grown exponentially how is your business responding to technological innovation in your products and services other technological advancements will impact on data storage security levels disruptive technologies such as smartphones social networking automation robotics and the increasing shift towards AI artificial intelligence shifts in the legal landscape are constantly changing especially here in the UK employment labor law and employment tribunal decisions impact upon working practices continuously it's also important to keep up to date with all changes in legislation and of course health and safety regulations environmental does your business have a direct impact on the environment political sanctions now govern carbon emissions and a move towards sustainable resources such as wind turbines and recycling this area also covers CSR corporate social responsibility and ethical sourcing of goods and services which in turn has a direct impact on procurement and your business supply chain management once you are clear on the main overarching factors included in a pest analysis the next challenge is to relate this in real terms to assess the risks specifically within the industry sector you work in