PESTLE Analysis: A Significant Business Analysis Tool

We know about the SWOT analysis and its importance in any business. So, here All Assignment Help comes with a detailed guide on another way of analysing business called a PESTLE analysis. As per the business experts, it describes a framework of macro-environmental factors that is widely used in strategic management. It was first developed as a business environmental scanning tool to assist owners in seeing the wider picture. This is due to the fact that every letter represents an outside element that might have an impact on the business. There is a lot to know about the PESTLE framework and analysis. However, we have covered all of them for you. Let’s dig more into PESTLE analysis.

What is PESTLE Analysis?

PESTLE is a framework used for analyzing and categorizing the outside influences that could affect your planning and operation. PESTLE stands for Political, Economic, Social, Technological, Legal and Environmental.

It continues to be the most often used framework for analyzing the external difficulties that a business may encounter due to its comprehensive yet straightforward approach to analyzing multiple industries.

However, while conducting this analysis, one must ask certain questions. This will provide them with the idea of things they should keep in mind. These include the following:

What is the political situation of the country and what impact it can have on the industry?
What are the frequent economic factors?
How important is culture for the market and what are its determinants?
What are all the environmental concerns for the industry?
What technological innovations might occur and put an impact on the market structure?
Are there any chances of changes in the legislation for the industry?

You can look over a PESTLE analysis example to get an overview of how to apply this framework to your assignment. However, if you fail to understand the PESTLE analysis for business strategy, you can consider taking online assignment help from experts. This not only makes your grades better but also saves you time so that you can learn more about the realistic strategies to use in the business.

Read Here: Detailed PESTLE Analysis of Apple Computers

Factors of PESTLE Analysis

Below we have provided additional information regarding each of the PESTLE analysis factors:

Political Factor in PESTLE Analysis

The political factor in PESTLE analysis talks about the role of government in providing a shape to the business. Moreover, it is inclusive of elements such as the stability of the government, tax policies, changes in trade restrictions, and tariffs. Furthermore, immigration policy is also an aspect here that offers necessary implications to the business. Politics may affect the operations as well. In addition to this, the personal interest of the employees may also influence the functioning of an organization. Hence, you must give a thought to all of it while writing the P of the PESTLE analysis.

Economic Factor in PESTLE Analysis

Here, you have to take the same approach to analyze the internal and external economic environments. Moreover, you have to analyze a company’s project viability while assessing the internal factors. It can also give you an idea of the internal soundness of the project. You can use financial models and accounting techniques for the same purpose. Also, you need to focus on interstate taxes, embargoes, and interest rates while considering external events. Look at the economic growth, inflation, minimum wage, working hours financing availability, etc. Covering all these aspects makes your economic element of pestle analysis complete.

Social Factor in PESTLE Analysis

Social factor in PESTLE analysis helps in the identification of events that can affect any community and market. Moreover, you need to have the right information about the types of products that are in demand in the area you are operating. Furthermore, you should consider all the benefits and issues that people are likely to face in the area of your operations. Additionally, the social factor in PESTLE analysis is inclusive of demographics such as population size, age, and ethnic mix. It also includes the attitude of businesses towards obesity and consumer activism. For that, you need to analyze the cultural expectations, norms, and population dynamics of the area.

Technological Factor in PESTLE Analysis

Technological factors in PESTLE analysis talk about the improvisations in the services and products that can come due to science. Technology gets outdated in a short period. Therefore, doing this analysis helps you in using the right technology as per the market demands. You may make a financial decision on the use of technology easily after giving a thought to it. Furthermore, some of the relevant factors of this segment are an increase in automation, advancement in service industry delivery, and changes in the rate of new product development.

Legal Factor in PESTLE Analysis

Legal factor in PESTLE analysis talks about the influence of court on the business activities. Therefore, one should analyze legal factors keeping both internal and external matters of a company in mind. However, some laws may affect your business in the country of your operation. Hence, you should also maintain policies for your organization. The main legal aspects one should look into during the analysis are employment laws, taxation, imports, exports, health and safety regulations, antitrust laws, and discrimination laws.

Environmental Factor in PESTLE Analysis

The environmental factor in the PESTLE framework talks about the physical conditions within which you are operating your business. Moreover, it is inclusive of factors like pollution levels, natural disasters, weather patterns, etc. Therefore, it is necessary to have an awareness of the environment where your business operates. The aspects can be natural, social, and economic. For instance, area temperature, monsoons, and natural calamities come into the natural category. Moreover, travel access and ground conditions fall into the socio-economic factors category. Near water sources and ground continuation are also parts of it.

Advantages and Limitations of PESTLE Analysis

Now, there are certain advantages and limitations associated with the PESTLE analysis for business strategy. Let us read about them below.

Advantages of PESTLE Analysis

It is a simple framework.
With the help of PESTLE analysis, external and strategic thinking can be strengthened.
It provides a wider understanding of the business environment.
PESTLE analysis enables the industry or organization to find all the opportunities in the business and exploit them completely.
It helps a business or organization to spot business threats and take significant actions to avoid them or make the impact minimal.

Limitations of PESTLE Analysis

Some of the users of PESTLE analysis tend to oversimplify the amount of information and data whilst it is always easy to use insufficient data.
When you capture too much data, you put the analysis at risk which might lead to paralysis analysis.
There are chances of using fictional data that cannot be found later.
To see the effects, it is necessary to repeat the process regularly.
Anticipation can face problems due to the pace of changes. This may affect the business or the organization in the future.

For a market expert, all of the above-mentioned tools and factors can be easy to use. However, in case, as a student you are not able to have a firm grasp on all these marketing concepts, methodologies, tools, advantages, limitations, etc. then seeking a good marketing plan assignment help is always a wise idea. You can always achieve the best with the experts.

Conducting PESTLE Analysis for a Business

During your academic years, you might have to do a PESTLE analysis of some celebrated brands as practice. Hence, in this section, we will focus on giving you an idea of the same.

Understand the PESTLE Factors

To make impeccable strategies, you need to ensure that your analysis is well-researched. Therefore, to do so, you must understand the six PESTLE factors thoroughly.

Collecting Relevant Data

Research is the key to a successful PESTLE analysis. It gives you a fine idea of what may work for your business and the things you need to be aware of. Hence, the next step you should take while doing an analysis is to gather relevant information. You must focus on finding the information that can give you an idea of the external environment. Furthermore, the internet is a source you can use for the same purpose. You also have the option of carrying out your research. In case you find analysis tough for you, you can get top-notch market analysis assignment help on the internet.

Give a Thought to the Opportunities

You gain a fair idea of your market through research. Also, the objective is always to take your business to a new level by offering the market what it wants. Therefore, the next step you need to take in the analysis is to identify the opportunities. You must find out how you can make your goods and services efficient for the consumers. Also, find out what new products you can develop. And try to identify the areas where you can sell your products.

Consider Threats Too

Along with the opportunities, there are always some threats that may undermine your business. Therefore, it makes it a must for you to give a thought to the threats that your business may face. It will allow you to make strategies to prevent and counter those threats. Or at least, you will be able to reduce its influence of it.

Take Actions Accordingly

These PESTLE analysis steps help you identify the opportunities and threats for your business. So, you must use your knowledge wisely and make the strategies that will help your business.

You can also enroll yourself in online classes to learn more about PESTLE analysis and its importance in businesses. However, taking online classes comes with multiple challenges. Hence, we recommend you get help from the online class helpers. All you need is to type on the Internet, is there someone who can do my online class for me? That all! You will find multiple options on your screen and you can choose the one you find most reliable and trustworthy.

Also Read: 5 Best and Practical Pestle Analysis Examples to Know

PESTLE Analysis Examples

Below listed are some real-world PESTLE Analysis examples for each category:

Political Factors

Example: Brexit Impact on UK Companies

Brexit affected UK businesses by creating confusion about trade agreements and tariffs. Businesses such as automakers have to think about moving or changing their supply chains to adjust to possible new taxes and restrictions within the EU.

Economic Factors

Example: Global Recession Due COVID-19

The recession brought on by the pandemic resulted in lower consumer spending and job losses, particularly in industries like retail, hospitality, and travel. Businesses had to modify their strategies to cope with decreased demand and economic uncertainty.

Social Factors

Example: Shift Toward Remote Work

The shift to remote work due to COVID-19 changed the expectations of employees. Companies in sectors such as technology and finance had to adjust policies to maintain talent and offer flexible working options, reshaping their office-space needs and company culture.

Technological Factors

Example: Artificial Intelligence in Customer Service

Many companies, such as Amazon and banks, have incorporated AI-powered chatbots for customer service. This reduces costs and improves customer support. However, it also requires companies to invest in new technologies and reskill their workforce.

Legal Factors

Example: General Data Protection Regulation (GDPR) in the EU

The GDPR law enforced strict regulations on data privacy, impacting companies operating in or with the EU. Tech giants like Google and Facebook had to adjust their data collection practices to comply and avoid significant fines.

Environmental Factors

Example: Climate Change and Carbon Emissions Regulations

The automotive industry, especially companies like Tesla, is affected by regulations to reduce carbon emissions. Traditional carmakers have had to shift to electric vehicles to meet environmental standards.

These examples are just an overview of PESTLE analysis. You can read more about them on the Internet. Also, you can check the PESTLE analysis template online if you are asked to write one for your assignment.

FAQs

Question. 1. What is the use of PESTLE analysis?
Answer. 1. In order to get a piece of contextual information about the direction of the business, the position of the brand, growth targets, and risks to productivity, PESTLE analysis is used.

Question. 2. How does a PESTLE analysis help a business succeed?
Answer. 2. PESTLE analysis is a simple business tool that helps in the success of the business by providing the business owners with an understanding of the wider market in which they are already existing. It widens the understanding of external factors for better business strategies.