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G2 PESTLE Analysis

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

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.

  • Employment law

  • Common law

  • Local labour law

  • Health and safety regulations

  • Data Protection legislation

  • Competition regulation

Ethical Factors

Ethical factors are the moral beliefs and values held by the external stakeholders of a business. 

  • Customer expectations of honesty in advertising 

  • Customer expectations of Ethical supply chain management

  • Supplier expectations of timely payment

  • Fair trade opportunities

  • CSR activity of competitors 

  • Opportunities to protect the environment.

  • Pressure groups

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