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Strategic Market Analysis Guide

PESTEL analysis is a framework that examines the external macroenvironmental factors that may impact an organization. It covers political, economic, social, technological, environmental, and legal factors. Political factors relate to government policy and regulations. Economic factors include economic growth, interest rates, and inflation. Social factors cover issues like population demographics, health consciousness, and career attitudes. Technological factors refer to innovation and technological change. Environmental factors relate to climate change and its impact. Legal factors encompass laws around employment, consumer protection, and health and safety. PESTEL analysis provides an overview of the diverse external forces affecting an organization's operations and strategy.

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282 views1 page

Strategic Market Analysis Guide

PESTEL analysis is a framework that examines the external macroenvironmental factors that may impact an organization. It covers political, economic, social, technological, environmental, and legal factors. Political factors relate to government policy and regulations. Economic factors include economic growth, interest rates, and inflation. Social factors cover issues like population demographics, health consciousness, and career attitudes. Technological factors refer to innovation and technological change. Environmental factors relate to climate change and its impact. Legal factors encompass laws around employment, consumer protection, and health and safety. PESTEL analysis provides an overview of the diverse external forces affecting an organization's operations and strategy.

Uploaded by

Shafayet Hossain Molla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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PESTEL Analysis

PESTEL analysis includes Political, Economic, Social, Technological, Environmental and Legal
analysis. It is an external environment analysis for conducting a strategic analysis or carrying out
market research. It offers a certain overview of the varied macro-environmental factors that
the company has to consider.
Political factors analysis is related with how and to what extent a government interferes in the
economy. Specifically, political factors include tax policy, labor law, environmental law, trade
restrictions, tariffs, and political stability. Political factors may also be related with goods and
services which the government allows (merit goods) and those that the government does not
want to allow (demerit goods). The government can have a great influence on the overall
health, education, and infrastructure of a country.
Economic factors contain factors such as economic growth, interest rates, exchange rates and
the inflation rate. These factors may have an influential effect on how the businesses operate
and make decisions. For example, interest rates can affect the firm's cost of capital and thereby
influence business growth and expansion. Exchange rates can affect the costs of export and the
supply and price of imports.
Social factors contain issues such as health consciousness, population growth rate, age
distribution, career attitudes and emphasis on safety. Trends in the social factors may affect the
demand for a company's goods and how the company operates. For example, ageing
population leads to smaller and less-willing workforce (and increases the cost of labor).
Moreover, companies may change various management strategies in sync with the social
trends (such as recruiting more females).
Technological factors include ecological and environmental aspects, such as R&D activity,
automation, technology incentives and the rate of technological change. They can determine
barriers to entry, minimum efficient production level and influence outsourcing decisions.
Furthermore, technological shifts can affect costs, quality, and lead to innovation.
Environmental factors are the conditions such as weather, climate, and climate change, which
may especially influence tourism, farming, and insurance sectors. Growing awareness to
climate change are increasing the interest in how companies operate and what products they
offer; it is both creating new markets and damaging the existing ones.
Legal factors include laws pertaining to discrimination, consumer affairs, antitrust,
employment, and health and safety. These factors can affect the operations, costs, and the
demand for the products. Legal factors can also influence the brand value and reputation of a
company. They are increasingly paid more attention to in the current decade.

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