PESTLE analysis
Aims • Prepare a PESTLE analysis for a given situation and use it to analyse the impact of the external environment on a firm. • Evaluate the impact on a firm’s objectives and strategy of a change in any of the PEST/PESTLE factors.
What is it? • It’s a way of working out what is going on ‘out there’ so you can then respond to it.
POLITICAL • • • Environmental protection/legislation Consumer protection Government’s attitude Competition regulation Advertising standards
Economic • • Economic growth Taxation international trade Exchange Rate Employment law Health and Safety law Inflation Consumer confidence Minimum wage
Social • • • Income distribution Demographics Labour & Social mobility Lifestyle changes Attitudes to work and leisure Education Fashion and Fads Health & Welfare Living conditions
Technological • • Changes in physical sciences Internet Energy use and costs Rates of technological obsolescence New discoveries Govt and Industry focus on tech Govt spending on research
Legal • • • Employment law Health and Safety Taxation both corporate and consumer Other regulations International trade barriers Strength of the rule of law
Environmental • How people’s perception and reaction to environmental issues can affect a business.
Exam tip • Remember it is not enough to identify the factor, you must say why it is where it is.
Task • In pairs you will be given a company to prepare a PESTLE analysis for. • Both pairings and the task will be decided randomly!
Task • The first job is to research some issues and background about the company. • Where am I going to get this info? • This will require a bit of thought and subtlety on your part. You must go beyond the obvious!
Task • Brainstorm the PESTLE with your partner. • Work out how you are going to present this information. • Remember it is not enough to identify the factor, you must say why it is where it is.
Task • Write a short piece explaining how the firm should exploit/avoid some of the issues you have identified.