G2 PESTLE Analysis

Oct 18

A PESTLE analysis is a method of analysing an external environment by breaking it down into political, economic, social, technological, legal and ethical factors. By looking at these factors separately, a business can analyse them in more detail and gain a better understanding of their impact.

Political Factors

Political factors refer to the influence of the government in a country. Factors may be contraints or support put in place by the government to meet their objectives.

Government policy
Political stability
Tax
Industry regulations
Global trade agrrements/restrictions
War

Economic Factors

Economic factors are any external influences that can affect the financial status and decision-making of a business and its stakeholders.

Exchange rates
Monetary policy
Fiscal policy
Supply-side policy
Stage in the economic cycle
Inflation
Unemployment
Balance of payments

Social Factors

Social factors refer to the ways in which people live or the values of people in a community in which a business operates.

Attitudes towards saving and debt.
Attitudes towards social responsibility
Consumer tastes, trends and fashions.
Consumer buying habits
Population demographic changes such as birth rates and migration.
Career attitudes
Work-life balance

Social Trends in Retail

Technological Factors

Technological factors are the availability and development of equipment that a business and its stakeholders have access to.

Automation and robotics
Communications infrastructure
Technological life cycle (innovation - obsolescence)
Access to and quality of the internet
CAD/CAM
AI
Security

Legal Factors

Legal factors are guidelines set out by the government that outline how businesses and their stakeholders must operate. This includes activity that must occur, activity that must not occur and the expected ways in which activity must occur.