essay on pestle analysis

Guide on How to Write PESTLE Analysis

Nowadays, almost every company can operate in any country, thanks to internationalization and globalization. However, there are certain conditions to consider before opening a branch in a new place. You may have heard few variations of analysis' name: PESTEL, PESTLE and PEST. PESTEL or PESTLE is the same, and this analysis concerns political, economic, social, technological, legal and environmental aspects. A PEST analysis covers all the factors mentioned above, apart from legal and environmental aspects. This article from EssayPro contains an extensive guide on the PESTLE analysis, which is fundamental for understanding the possibilities for entrepreneurship in a country.

Whenever you carry out the PESTLE analysis for business, you automatically get acquainted with the chosen place's peculiarities. If top managers research beforehand, they might face severe consequences like low profits or even the inability to work under certain circumstances.

What Is PESTEL

Everybody would probably agree that interest rates or health and safety laws affect business regardless of its field and other specific characteristics. Also, political instability can cancel out a country's positive aspects of high technological awareness. Moreover, inflation rates and buying trends determine the decisions of a business owner who does strategic planning.

All of the factors mentioned above are a drop in the business environment. To avoid chaos, scientists systematized the determinants of the climate where a business operates. Hence, every PESTLE analysis example becomes a detailed critical analysis of the company’s surroundings that affect its performance.

What Are the Components of the PEST

The more concise version of PESTLE (PESTEL) analysis is PEST. Although it covers fewer internal and external factors, it still gives factual information about the following determinants:

• Political factors

Indeed, political factors are one of the first to consider when entering a new market. If a country can boast its political stability, it instantly becomes attractive to numerous investors worldwide. An entrepreneur wants to be sure that the current government is interested in creating a safe environment for foreigners.

• Economic factors

The second influential segment includes economic factors. Everything from interest rates and exchange rates to the percentage of annual economic growth and trade tariffs has an impact. So, naturally, economic instability scares away potential investors.

• Social factors

Next, a company’s management assesses social factors. Here, aspects like population growth rate, health consciousness, or age distribution determine the appeal of the business environment. The enterprise needs lots of skilled workers and potential buyers to operate successfully.

• Technological factors

Why do technological factors matter for businesses? Let’s say that a company originates from a country where many new technologies, like artificial intelligence, are usual. Adjusting to the new environment could be complicated if the firm chooses a place with fewer technology incentives.

Need some essay writing, math homework or essay editing help ? Leave us a notice ' help me with my math homework ' and we'll give you a hand asap.

What Is PESTLE Analysis Used For

PESTLE analysis helps calculate possible risks and profits. First, political factors determine whether the country is open to new ventures. Second, economic factors show how prosperous the place is. Third, the category of social factors reflects the demand for a product or service. Finally, the level of technology and legal factors demonstrate how climate change or global warming might affect your business decisions.

Do you need a high-quality essay without delay?

Reach out to our professional writers.

PEST Analysis Examples

Are you looking for a sample paper on PESTLE factors? Here, you can find a suitable PESTLE analysis template highlighting a business's economic, social, technological, legal, and other factors. Generally, a high-quality PESTLE analysis example includes consumer protection laws, employment laws, or corporate social responsibility. In the current economy, strategic thinking is a good competitive advantage for every specific business. Indeed, all PESTLE components help better understand buying habits, trade restrictions, technological change, etc.

PESTLE Analysis of Apple

Strategic decision-making for a technological giant must include examining political, economic, social, and technological factors. Undeniably, the PESTLE analysis of Apple helps to build a proper business plan for operating in other countries like China.

Political stability is one of the essential components of the external environment. While Apple has zero issues with safety regulations or fiscal policies, it may suffer from international conflicts. The trade war between China and USA perfectly illustrates how governments affect companies’ performance. First, China's decreasing scale of cheap manufacturing leads to higher production costs. Also, both countries raise import taxes, that increase the product cost.

Since Apple products are on the pricey side, determinants like economic growth and purchasing power are important for successful ventures in foreign countries. Nowadays, Asian countries like China demonstrate stable growth of gross domestic product and increasing buying power of their citizens. Consequently, opening new branches in prosperous places might increase profits.

Another component of PESTLE analysis for business are social specifics of the target country. For instance, in places like China, population growth rates exceed expectations. Therefore the enterprise gets enough workers and consumers. Moreover, Apple’s marketing efforts make people perceive their products as luxury. So, the buyers’ desire to show high status can boost the demand among the Asian population. However, the US trade war with China may also negatively affect Apple sales.

The next segment of the PESTLE model covers technological advancements. For Apple, external factors like the level of technological development are critical. Companies like Samsung, Xiaomi, and Lenovo fight for bigger market shares by implementing innovations. At the same time, Apple barely comes up with anything revolutionary in their gadgets, so their target audience often chooses other brands.

• Legal factors

The legal macro environment often includes safety laws or patent laws and other legislation regarding any business activity. Apple has a strong brand, so to maintain a good public image, this company avoids getting into law scandals. Still, this business takes risks by working with music and software that has copyright and patent protection. In case of a lawsuit, the loyalty of Apple customers may suffer drastically.

• Environmental factors

The final segment of the PESTLE analysis studies environmental issues like climate change or environmental regulations. For instance, Apple can generally withstand global warming or other weather changes by placing its factories in safe areas. However, the strict environmental policy of countries like China makes Apple make environmentally friendly choices in its production processes, like ditching lithium batteries. This way, the brand can maintain an even better reputation in the target country.

Overall, the PESTLE analysis has shown the aspects of the macro environment that affect Apple’s performance abroad. In addition, the examination has demonstrated both drawbacks and advantages of the company’s policy. Although Apple has to adjust to the changing environment to stay relevant, it still has multiple strong sides.

Do You Need Some Help With Your PESTLE Analysis?

Contact our professional writers. We process all requests fast.

McDonalds PESTLE Analysis

Whenever prominent corporations want to operate in a wider business environment, they study the economic, technological, legal, and environmental state. In other words, a company wants to know what to expect in a new market. The information about  these determinants and even more is available in the Mcdonalds PESTLE analysis:

Since Mcdonald's is the largest and most famous fast food company, most of its concerns connect to food safety. Many countries have stricter safety standards than the US, Mcdonald's place of origin. For this reason, the corporation has to align with the local legislation or avoid opening branches where losses can exceed profits. More risky regions in terms of policy would be Middle Eastern or Asian countries.

If we talk about the economy as the next criterion of the external environment, the circumstances differ from country to country. As an illustration, the recently slowing economic growth in Eastern Europe is a drawback for the local Mcdonald's restaurants. On the contrary, the steady growth of the economy in Western Europe and developing countries is a good sign. Nonetheless, employees rarely use Mcdonald's to satisfy their career attitudes. Therefore, a high employee turnover rate causes losses for the company.

Mcdonald's views cultural preferences as a crucial social factor, so the chain adapts to people’s tastes in different regions. An example of such adaptation is the famous Japanese menu with lots of rice and fish. Likewise, the Indian Mcdonald's branch caters to the mostly vegetarian tastes of citizens, and so on. However, the trend for a healthy lifestyle and weight loss might threaten the company, so it needs to change its strategy.

In recent years, Mcdonald's has tried to keep up with worldwide technology trends. This strategy helps the fast food corporation to boost demand in all countries. One of the greatest high-tech implementations was the sensory screens for ordering food. This decision allowed to attract more customers who wanted more menu positions. In the pandemic period, contactless restaurant options became even more topical. Further automatization would be a winning strategy for Mcdonald's.

One of the biggest legal issues for Mcdonald's branches worldwide would be changing employment laws, especially the increase of minimum wages. In this case, changes are inevitable, so the management should think of redistributing the profits correctly. Next, it’s the company’s priority to follow the changes in laws of every country. Sometimes, governments ban certain ingredients or toys from Happy Meals.

Regarding the ecology, the management of Mcdonald's actively shows their awareness of environmental issues. Becoming more environmentally friendly is the company’s objective. For instance, Mcdonald's tries to switch to only recyclable packaging to decrease pollution. Also, the local restaurants in many regions prefer to use energy-efficient technologies. Yet, there is an even worse ecology issue, global warming. The changing weather conditions might lead to a shortage of food and disruption of supply chains.

The detailed PESTLE analysis for business helps its top managers make proper decisions on both new and usual markets. Foreseeing the dangers and opportunities is essential for a company’s success.

Coca Cola PESTLE Analysis

Managers interested in discovering new markets have to employ PESTLE analysis for business. As an illustration, Coca Cola PESTLE analysis examines political, economic, social, technological, legal, and environmental conditions. 

Like any other food or beverage company, Coca-Cola works under country legislation, specifically consumer protection laws, copyright laws, etc. Governments naturally aim to prevent any harmful products from entering the market. Luckily for Coca-Cola, most countries allow their drinks on the shelves of their shops. But, there are circumstances like sanctions, which make trade and investment impossible in certain regions. For Coca-Cola, such restricted areas are Cuba, North Korea, and Russia.

Indeed, the Coca-Cola brand is the first that comes to mind when you think of sweet beverages. This fact is hardly surprising since the company owns half the market share, leaving only fifty percent for all its competitors. Overall, the demand for this drink is steady in most countries, yet some trends can change the situation. As everybody knows, Coca-Cola drink is far from healthy. Consequently, people who shift to a more nutritious low-sugar diet might stop buying the beverage, causing lower profits.

Because Coca-Cola operates in so many countries, it has to adjust its marketing strategy to the socio-cultural aspects of every nation. But, by far, its attempts were successful and led to the popularization of the brand worldwide. One of the examples is the creation of unusual tastes in certain countries. Japanese consumers, for instance, highly appreciate the green tea taste and lemon Coke. Besides, Coca-Cola sold bottles with names, and people liked them. So, naturally, sales went up in all regions.

A beverage giant like Coca-Cola manages to draw people's attention from all age categories, but it mostly caters to the younger generation. So how does this brand attract more consumers in such a competitive market? Coca Cola uses modern technologies to its advantage. Besides working on the drink, the company heavily invests in social media marketing. The hashtags and online games aim to gain more buyers who want to be cool and trendy.

The Coca-Cola Company is famous for the secret formula of its drink. The brand has zero problems with patents or copyright, but the issues emerge from the other side. Coca-Cola is unfortunately notorious for mistreating its workers, who even protested against its unfair policy. What is more, there were even rumors about racial discrimination. So, the company has to work in this direction to clear its image.

As the biggest soft drinks producer in the world, Coca-Cola faces several accusations from eco-activists. Water shortage is the first problem that arises in places where the company places its factories. Statistically, Coca-Cola is the largest consumer of fresh water, so it drains its supplies everywhere. The issue is especially severe in countries that suffer from droughts, like India. Another problem to work on is plastic pollution due to piles of Coca-Cola bottles. Recyclable materials would be an awesome alternative.

PESTLE analysis for a business like Coca-Cola builds the most efficient strategy. Proper steps help to avoid pitfalls and secure market position.

Got an assignment to write a gun control essay , but don't know where to start? Read our blog article and get yourself pumped!

Is the deadline for your essay too soon?

Ask our essay writers for help.

PESTLE Analysis for Amazon

Luckily for people who love to shop comfortably, services like Amazon exist to meet their needs. This global leader in e-commerce gains customers’ trust thanks to its smart tactical and strategic plans. The management uses PESTLE analysis for Amazon, which shows the company’s strong and weak sides:

Paving the way into multiple countries' markets means dealing with the local political environment. On the one hand, Amazon thrives in developed regions that can boast political stability. However, on the other hand, unpredictable environments like Eastern Europe or the Middle East threaten the company’s activity. Furthermore, rising foreign trade taxes may affect Amazon, like the cybersecurity failure.

Sometimes, high prices for the products, together with increasing shipping costs, scare away company clients. This issue is topical for Amazon, especially in developing countries. However, automatizing the processes can help this company save costs and set lower prices. A more influential factor for Amazon is competition with Aliexpress or Walmart. They have the potential to take over the market in Asian countries and the USA correspondingly.

Depending on the average income, Amazon sales might differ from country to country. More developed countries generally have a bigger percentage of citizens who use e-commerce. Furthermore, online shopping has become a large cultural phenomenon since the beginning of lockdowns. As a result, people got used to receiving their packages without going outside, which positively affected Amazon’s revenues. At the same time, too many company employees are losing their jobs because of automatization, which is a negative factor.

Technology and innovations are sure something that Amazon implements where it is possible. Since delivery is the company’s main service, the management attempts to make the process more efficient. Everything here revolves around creativity. Customers from developed regions can even receive groceries through drones. Another improvement is the possibility to talk to customer service through live chats or e-mails. Overall, Amazon constantly invests in its R&D department.

Legal matters are one of the most complicated, as every country has different requirements for foreign business activity. Amazon strictly follows consumer and employment laws to avoid tarnishing its reputation and bearing losses. Still, there are controversial situations where this business has to change its strategy. First, the counterfeit accusations can obstruct Amazon’s activity. Selling fake goods is legally punishable in most countries. Also, governments might suspect that Amazon collects consumer data underhandedly.

The examination of Amazon’s ecological strategy proves that this business cares about its effect on the environment. Even though e-commerce produces fewer emissions than shopping in brick-and-mortar shops, the change is still necessary. To become more environmentally friendly, Amazon encourages its clients to choose longer delivery options since quick shipment is bad for the ecology. Such initiatives improve the brand image and strengthen customer loyalty.

Altogether Amazons PESTLE analysis digs out the needed information about the company's activity. The final objective is to assess the effect of the environment on this brand and to find the best solutions for arising issues.

How do PESTLE Factors Affect a Business

Indeed, the lack of market research usually backfires with the sudden obstacles in the company’s way. Our papers writing service recommends using PESTLE analysis for businesses to make efficient decisions. Originally, every PESTLE analysis template contained several factors influencing companies worldwide. Like so, political circumstances might encourage or prohibit a firm from working in a country by enforcing the law, which is another category.

Next, economic strength impacts the demand for products and prices for raw materials. On top of that, socio-cultural specifics determine whether the s and services can be popular. Another subject of analysis is the level of technology, which should be enough for an innovative enterprise. Finally, the state of local ecology affects foreign business too. The company must be responsible for any potential harm to nature.

SWOT and PESTLE: Difference

You could have heard of two equally popular abbreviations, SWOT and PESTLE. In a nutshell, both of them relate to business and marketing. At first, these frameworks might seem a bit similar, but they do differ. For instance, if you look at the PESTLE analysis definition, you can see that it covers only the macro environment where a business operates. At the same time, SWOT examines internal factors like strengths and weaknesses and external determinants like opportunities and threats.

How does our research paper writing services compare the two methods? The thing is, both of them are essential. It is worth mentioning that SWOT analysis suits new brands and products more, while PESTLE analysis works better for expanding businesses.

Why Is PEST Analysis Useful for Business

Granted that company owners think of expansion, they have to consider everything. In such situations, PESTLE analysis for business is an awesome way to study unknown markets. The framework covers every detail that can potentially boost or disrupt business activity. On the contrary, superficial analysis is ineffective as it often misses economic, cultural, or legal specifics. Moreover, changes can happen overnight, so PESTLE analysis should be recurring.

A key goal of the market examination is minimizing dangers for a company. Analyzing the current situation in a country, along with its previous experiences, gives a hint of future events. However, certain circumstances, like natural disasters or international conflicts, are impossible to predict. That is why management should have a backup plan just in case.

In conclusion, any PESTLE analysis template gives companies recommendations regarding their foreign strategy. Furthermore, the study is thorough, so you can find an essay to buy at our service that always finishes work on time. Finally, preparation gives a clear view of the best direction for a company in a world of endless possibilities.

Read also AP Lang argument essay example from our writers. This information will be useful to you for your essay writing.

Expert Help for Your PESTLE Analysis Essay

PESTLE analysis can be intricate and time-consuming. Our professional writers are here to help, offering tailored essays that dissect and analyze each aspect of the PESTLE framework with precision.

Daniel Parker

is a seasoned educational writer focusing on scholarship guidance, research papers, and various forms of academic essays including reflective and narrative essays. His expertise also extends to detailed case studies. A scholar with a background in English Literature and Education, Daniel’s work on EssayPro blog aims to support students in achieving academic excellence and securing scholarships. His hobbies include reading classic literature and participating in academic forums.

is an expert in nursing and healthcare, with a strong background in history, law, and literature. Holding advanced degrees in nursing and public health, his analytical approach and comprehensive knowledge help students navigate complex topics. On EssayPro blog, Adam provides insightful articles on everything from historical analysis to the intricacies of healthcare policies. In his downtime, he enjoys historical documentaries and volunteering at local clinics.

Related Articles

More Like this

PESTLE Analysis Examples

Before We See PESTLE Analysis Examples, Let’s Recap on the Basics.

A PESTLE analysis looks at the macro trends in the surrounding environment of a certain business or organization. It examines the political, economic, social, technological, legal, and environmental elements of the operating market that may have either positive or negative effects on your company or organization.

DOWNLOAD THE FREE GUIDE

A PESTLE analysis is often used as an extension of a SWOT analysis . Remember that the external matrix of the SWOT evaluates and creates awareness about the opportunities an organization should take advantage of, as well as the threats it should avoid. This external analysis is part of evaluating your organization’s strategic position within its market, industry, and larger operating environment.

Here, we will take a deep dive to examine what you should feature in your own PESTLE analysis. We’ll examine some PESTLE analysis examples from some of the most successful companies of our time.

Definitions and General PESTLE Analysis Examples:

A PESTLE analysis will look different for each industry, and it must be approached differently as well. Consider your organization’s unique position, market, and needs when conducting a PESTLE analysis.

It is easiest to begin with a SWOT analysis and then use your PESTLE as a companion piece to dig deeper into the external megatrends—both threats and opportunities—that the market and operating environment will present to your organization.

From our PESTLE analysis examples, here are some factors you may consider using:

Examples of Political Forces

These are the external forces affecting your organization that are brought on by government. They may include laws, policies, regulation or de-regulation trends, governing bodies and leadership, foreign trade and foreign relations, political issues and trends, tax policy—any political factors that could influence your organization’s opportunities or threats.

Examples of political forces include:

• Changes in government/election cycles: Will the possibility of shifting party majorities in upcoming or recent elections affect regulation or de-regulation in your industry or a related industry? Does this create a threat or an opportunity?
• Fiscal policies: How might changes in tax codes affect your budget and profits? How can you prepare for this?
• Wars and conflicts: What recent or current conflicts might affect foreign relations and/or trade in your industry? What can you do to create stability?
• Legislation changes: Is there legislation (proposed or passed) that would substantially affect your operations or your customers?
• Trade agreements: Do you see any upcoming opportunities in the form of new foreign markets? Or conversely, do you see any threats to your foreign markets?
• Political movements: What issues are becoming increasingly important to the people in your target audience? How does this affect their relationship with your brand?

Examples of Economic Forces

The economic environment you operate in includes several factors to consider, such as general economic climate, taxation, and globalization. Inflation rates, shifts in consumer spending, supply chain issues, demand curves, and global economic health may all be a part of your economic analysis.

Examples of economic forces include:

• Employment rates and compensation: Do you have a ready labor market, or are good team members hard to come by? Which direction is the trend heading? What do you need to consider in terms of compensation to bring on and keep talent in your industry?
• Inflation: How is inflation affecting the price of your materials? How is it affecting your customers and their spending?
• Currency devaluations: How is your currency—and the currency of your customer base—performing? How might this affect your costs and revenue?
• Stock market and market values: What recent or predicted trends in the stock market do you see impacting your industry and your organization?

Examples of Social Forces

Social forces focus on the opinions and attitudes of consumers that relate to your product, as well as the changing population and demographics of your operating market. Your analysis might consider social justice movements and other trends, both in your immediate environment and in the broader environment your customers are coming from.

Examples of social forces include:

• Demographic changes: What are the ages, experiences and backgrounds, and racial and gender identities of your customer base? Have any of these shifted or are they projected to shift? If so, how and why? What do you need to do to accommodate customers coming in?
• Religious beliefs: Are there religious or spiritual beliefs that intersect with your organization or your product? How can you be sensitive to those?
• Consumer opinions: How do consumers feel about your product (or products like yours)? Are there positive or negative changes in this general sentiment?
• Purchasing patterns: Due to economic or other factors, are your customers spending less in your market? More?
• Popular media: What current events, celebrity opinions, or other media influences will your consumers be tuned into? Are there any that might affect thoughts, ideas, and feelings about your organization, product, or brand?

Examples of Technological Forces

This focus area considers how technological forces may be impacting your organization. Changes in technology can affect your positioning as an organization. Some recent examples are the rise of cryptocurrency, the emergence of work-from-home technology, AI developments, and even concerns over cyber security.

Examples of technological forces include:

• Increased emergence of AI: What capabilities do you see as opportunities for your organization?
• Energy usage: What new technologies would allow you to save on energy costs (both to your organization and to the environment)?
• Cloud software: What developments have been made to cloud storage to make it more effective, and are you taking advantage of those developments? Conversely, are there security threats to be aware of in this software for your organization’s data?
• Internet: What improvements are available to maximize speed and reliability for the online work of your team?
• Technology usage incentives: Are there incentives available to encourage certain technology use?
• New machinery or tech: Are there emerging industry-specific technologies or equipment that would improve the quality, cost, or efficiency of your organization’s work?

Examples of Legal Forces

While similar to the political aspects, the legal elements in your PESTLE analysis examine the practical application of those political factors into rules and regulations that impact your organization’s business or customers. Depending on your business, you may need to consider local and state laws as well as federal laws.

Examples of legal forces include:

• Patent and intellectual rights laws: How might developments or decisions in intellectual property law affect you and/or your competitors?
• Protection laws: Are there consumer protection laws that would affect the way you interact with and do business with your customers?
• Occupational safety laws: What occupational safety laws do you need to be aware of to conduct business in a way that protects both your employees and your organization?
• Import and export laws: What legal parameters are there for ordering goods from other countries, as well as for selling your product in other countries?
• Licenses: What licenses do you, your employees, and your organization need in order to fill the roles that are needed?

Examples of Environmental Forces

Environmental factors are affected by weather, geography, climate change, and health crises. In addition to the public health crisis caused by the pandemic, the world has also been impacted by wildfires and other natural disasters across the globe. As an organization, you ought to consider the short-term and long-term impacts of these accelerating changes.

Examples of environmental forces include:

• Climate change: How might short- and long-term effects of climate change, including rising sea levels and increasing frequency of extreme weather, impact your organization and customers?
• Consumption of non-renewable resources: What necessary resources could become limited or depleted in the future that would impair your business?
• Energy alternatives:
• Gas emissions: How does your organization contribute to, and how is it affected by, gas emissions? What steps could be taken to reduce emissions and to prepare against the effect of emissions?
• Natural disasters: What natural disasters pose a threat in your area, or in the areas where many of your customers are located? How can you be prepared for these threats?
• Environmental hazards: What other hazards in your environment could prove threatening to your organization?

*Bonus: Ethical Factors to Consider

Over the last few years, business and marketing strategy experts have added a third ‘E’ to the PESTLE analysis – the ethical factor . This can include things such as fair-trade practices, child labor issues, increasing demand for conscious business models, and corporate social responsibility. As these issues come to your attention, examine the megatrends and take the opportunity to evaluate them within your organization’s environment.

Examples of ethical forces include:

• Workers’ rights: What strides can your organization make (or what strides is your organization already making) to take care of those who work for you?
• Fair trade laws: Especially concerning overseas trade, what issues do you need to be aware of in order to promote ethical and responsible practices?
• Human rights issues: How far have you followed the organizations you partner with, contract with, buy supplies from, and do other business with? Are there any organizations whose relationships need to be reconsidered due to human rights violations?
• Corporate social responsibility:
• Diversity, equity, and inclusion: What practices and attitudes are being adopted successfully to promote diverse, equitable, and inclusive workplaces? Conversely, are there practices and attitudes that are backfiring? Which might you best adapt for your organization?

6 Real-World PESTLE Analysis Examples from 8 Successful Companies:

Food and beverage industry pestle analysis examples:, starbucks pestle analysis example.

For Starbucks, lowering costs and staying aware and sensitive to the issues that are important to its customer base are two courses of action that become clear after an environmental analysis.

• Sourcing raw materials and following fair trade practices , which has gained a lot of attention from politicians in the West.
• Keeping up with laws and regulations in other countries from which Starbucks buys its raw materials.
• Economic recession , which has led many customers to seek cheaper alternatives.
• Rising labor and operational costs due to inflation.
• Retiring of the Baby Boomer generation, along with changing family patterns and lowered birth rates leading to fewer spending customers.
• Changing workstyles and lifestyles, including increased remote work .
• Enabling mobile payments , which increases the potential customer base.
• Agricultural developments that might impact raw material production.
• Introduction of caffeine consumption-related policies by health organizations.
• Industry licensing regulations.

Environmental

• Natural disasters in countries that produce coffee beans .
• Environmental laws and regulations related to packaging and waste .

Beyond Meat PESTLE Analysis Example

A California-based producer of plant-based meat substitutes, Beyond Meat is poised to take advantage of many environmental trends that could provide an opportunity to expand.

• Animal farming is receiving political pressure to cut back on expansion.
• Laws and regulations about greenhouse gas emissions.
• Vegan meat is projected to grow from 1% to 10% of meat consumption by the end of the decade.
• Vegan meat has the potential to be cheaper than animal meat , but would need drastic changes to its efficiency to realize this.
• Rise of veganism in developed countries.
• Increasing awareness and vocality of environmentally conscious citizens.
• An extensive amount of technology in R&D for this industry.
• Social media and other technological platforms for advertising and brand-building .
• New food safety standards to classify plant-based meat products.
• Soy farming has raised some concerns about deforestation and soil degradation.
• Plant-based products shown to be much more environmentally friendly than animal meats.

Retail Industry PESTLE Analysis Examples:

Walmart pestle analysis example.

Due to its size and profitability, Walmart has a uniquely competitive edge , yet its growth and continued profitability are sensitive to several external factors .

• Global differences in government regulations , such as banned products in some countries.
• Emergency curfews closing stores early.
• Inflation raising costs; brand appeal is based on low prices.
• Supply chain issues. Continued pressure on the supply chain and inflation is causing increased overhead costs.
• Business model rejected in some places, such as Germany.
• Increased trend toward online shopping , especially post-pandemic.
• Consumer push for same-day delivery of products.
• Adoption of automation for basic tasks.
• Expansion of mobile app and online services.
• Expansion of available technology in distribution and warehouse centers.
• Proposed legislation to raise minimum wage .
• Recent labor lawsuits open doors for further litigation.
• Call to reduce waste and use of nonrenewable energy.
• Weather and climate considerations in a wide number of locations.

Amazon PESTLE Analysis Example

The technology and online retail giant has many opportunities to capitalize on , with a few threats to monitor .

• Government pressure on anti-trust and monopolies for major corporations.
• Pressure from the federal government and local government about employment practices .
• Governmental regulations on cybersecurity and privacy protection.
• Increasing disposable incomes in developed countries.
• Inflation and supply chain issues impacting online stock.
• Macro-trend for organizations to seek and purchase cloud computing products and solutions.
• Increasing consumerism in developed economies and emerging economies.
• Increasing demand for same-day delivery of products to consumers.
• Increasing dependence on technology , cloud computing, and AI.
• Expansion of robotic automation for picking, packing, and delivery of the product.
• Expansion of AI to serve Amazon Web Services.
• Unionization and labor laws impact Amazon’s workforce.
• Changing import and export regulations .
• Import and export tax on goods sold.
• Increasing energy costs increase the cost of supply chain delivery.
• Environmental impact of plastic and plastic packaging .
• Carbon emissions and new fuel options as an organization.

Tech Industry PESTLE Examples:

Apple pestle analysis example.

Like other big tech companies, Apple stands to gain from growing reliance on digital technologies and movement toward energy efficiency—but so do its competitors .

• Trade disputes , especially between the U.S. and China.
• Pressure from federal regulators on antitrust .
• Increasing political pressure on consumer privacy protection and data.
• Changing economic tides and changing economic forecasts create uncertainty in the tech sector.
• Supply chain scarcity and resource constraints on product production.
• Stagnant changes to income of Apple’s buyer pool for luxury products.
• Rapid growth in emerging markets for entry-level products.
• Rising global use of mobile access across the globe.
• Increasing global dependence on digital ecosystems.
• Anti-Apple sentiment due to exclusivity and price.
• Growing technological and development capabilities of the competitive set .
• Pressure from cybercriminals threaten the data security of Apple products.
• Increasing privacy regulations and protections.
• Legal challenges to Apple’s policies and practices related to the app store .
• Ethically and efficiently recycling broken and unused electronic devices , especially those containing lithium batteries.
• Environmental impacts of manufacturing products in China.
• Climate change impacting shipping and supply chain routes .

Airbnb PESTLE Analysis Example

The unique matchup business model of Airbnb, as well as companies like Uber and Lyft, have taken the market by storm—but have also incurred significant legal battles .

• Housing laws and vacation rental bans in some markets conflict with business model.
• Varying tax rates from counties and countries.
• The housing crisis and crunch in the housing market.
• Varying prices and availability of hotels as a primary competitor.
• Increase access and desirability of travel .
• Resistance from locals about the impact of vacation rentals in residential areas .
• Social acceptance of ridesharing and travel sharing business model.
• Increased reliance on mobile apps and other digital solutions .
• Increasing security of online payment systems.
• Legal challenges in some states and countries.
• Environmental impact of single-use products for hospitality .

What is the purpose of conducting a PESTLE analysis? 

A PESTLE analysis can help you understand where your organization stands in the external market and assess the macro-trends that could potentially affect your business/product.

What are all the components of a PESTLE analysis?

A PESTLE analysis looks at six aspects of the environment that could impact your organization: Political, Economic, Sociological, Technological, and the two newly added — Legal and Environmental. Some PESTLE analyses even incorporate ‘ethics.’

What does PESTLE stand for?

Two things you should always consider as you’re going through each aspect of the PESTLE analysis are: where am I now, and where do I want to go? These two questions will guide you in figuring out your current state in the macro environment and your ideal state. Next, it’s important that with each factor or event you outline in your PESTLE, you also consider whether they pose an opportunity or a threat.

Thanks for sharing….extremely useful

Thank you for sharing ..it has helped

Thanks very helpful for understanding the concept of PESTLE analysis.

Very insightful and pratical. Helpful indeed Thank you

Comments Cancel

Join 60,000 other leaders engaged in transforming their organizations., subscribe to get the latest agile strategy best practices, free guides, case studies, and videos in your inbox every week..

Leading strategy? Join our FREE community.

Become a member of the chief strategy officer collaborative..

Free monthly sessions and exclusive content.

Do you want to 2x your impact.

• 400+ Sample Business Plans
• WHY UPMETRICS?

Customer Success Stories

Business Plan Course

Strategic Planning Templates

E-books, Guides & More

• AI ASSISTANTS

Upmetrics AI Your go-to AI-powered business assistant

AI Writing Assist Write, translate, and refine your text with AI

AI Financial Assist Automated forecasts and AI recommendations

• TOP FEATURES

AI Business Plan Generator Create business plans faster with AI

Financial Forecasting Make accurate financial forecasts faster

Strategic Planning Develop actionable strategic plans on-the-go

AI Pitch Deck Generator Use AI to generate your investor deck

See how it works  →

AI-powered business planning software

Very useful business plan software connected to AI. Saved a lot of time, money and energy. Their team is highly skilled and always here to help.

- Julien López

• BY USE CASE

Starting & Launching a Business Plan your business for launch and success

Validate Your Business Idea Discover the potential of your business idea

Secure Funding, Loans, Grants Create plans that get you funded

Business Consultant & Advisors Plan seamlessly with your team members and clients

Business Schools & Educators Simplify business plan education for students

Students & Learners Your e-tutor for business planning

• Sample Plans

Reviews See why customers love Upmetrics

Customer Success Stories Read our customer success stories

Blogs Latest business planning tips and strategies

Strategic Planning Templates Ready-to-use strategic plan templates

Business Plan Course A step-by-step business planning course

Ebooks & Guides A free resource hub on business planning

Business Tools Free business tools to help you grow

How to Conduct a PESTLE Analysis Explained with Example

Free Market Analysis Kit

Ayush Jalan

• January 2, 2024

While a business plan outlines the process of building, running, and maintaining your business, it’s not enough to survive in the market. To make sure that your business stands the test of time, you need to arm yourself with strong and reliable business tools.

This is where business frameworks like PESTLE, SWOT, and Porter’s Five Forces can prove to be useful. They help you understand your business environment and break down long-term goals into bite-sized tasks. This allows you to streamline activities using actionable data.

In this article, we’ll focus on PESTLE analysis . We will see what it is, how it works, how to conduct it, and also see an example to help you get a better idea.

Table of Contents

What Is PESTLE Analysis?

When is pestle analysis conducted, 6 factors of the pestle framework, how to conduct a pestle analysis, example of pestle analysis.

PESTLE is an acronym for Political, Economic, Social, Technological, Legal, and Environmental factors. It’s a business framework that focuses on these six external influences on your company. It is often used in conjunction with other business frameworks.

Entrepreneurs use it to gather info about various external factors affecting their company. This helps get a bird’s-eye view of the business landscape which leads to better decision-making and protects against risks.

A PESTLE analysis is conducted:

• Before the launch of new products or services
• Before venturing into a new market
• To find new opportunities in the existing industry
• To analyze the changing environment of your industry

The PESTLE framework looks at your business environment from six different angles. By analyzing each, you can optimize your business activities according to the changes and trends in your industry.

Let’s understand these factors in detail.

1. Political

The first factor looks at the political powers affecting your business. This includes tax policies, political stability, environmental regulations, and trade barriers like tariffs, quotas, embargos, etc. These can also include government policies applicable to all business activity or particular to your industry.

For instance, say the government levies a special tax on iron. Manufacturing companies that use iron as a raw material will then see an increase in their COGS (cost of goods sold). As a consequence, this will affect the price of their offerings and net profit .

2. Economic

Economic factors include inflation, the standard of living, the unemployment rate, economic growth/decline, interest rates, the fiscal year followed in the country, foreign exchange rate, and economic stability.

For example, a recession causes unemployment and hence a decrease in people’s purchasing power. This results in reduced production of goods due to low demand and may even cause entrepreneurs to exit their businesses .

Unlike the above two, the social factor focuses on the things that influence your target market. Given the unpredictable changes in the demographics of your audience, social factors often tend to be highly volatile.

Social factors include cultural trends, religious beliefs, literacy rate, population growth, demographics, social classes, etc. These factors influence the buying pattern of your target customers, and hence, the sales of your products or services.

For instance, with the changes in people’s dietary habits, food outlets are expected to offer products accordingly. A person following veganism expects a fast food restaurant to provide diverse vegan options.

In other words, businesses tailor their offerings according to the changing needs and want of their customers.

4. Technological

Technological factors refer to the technological developments impacting your business. This may be the way you manufacture your products or the way you market and sell them. This includes advances in machinery, software, and equipment that can aid or harm your business.

For instance, a store may use gesture recognition to help people with disabilities such as hearing, speaking, or other motor impairments. This can help drive sales with increased inclusivity and convenience for customers with special needs.

Legal factors refer to the laws your company has to abide by. These legal factors include consumer laws, labor laws, copyright laws, import/export laws, etc. If you do business overseas, you must follow the trade laws of your home country as well as the importing country.

These factors influence the development of products and operations of your business. For instance, an automobile company follows the set safety guidelines while manufacturing vehicles. This includes using qualifying materials, adding safety exits, etc.

6. Environmental

Environmental factors reflect your business’s surrounding ecological environment. This includes weather conditions, seasonal climate, geographical location , global climate effects, energy consumption, waste disposal, carbon emissions, etc.

These factors influence your sales, customers’ opinions about your brand, and your business operations. For instance, the rise in global warming has led companies to shift to more sustainable energy resources and opt for better waste disposal solutions.

STEP 1: Select the objective and scope of analysis

The first step is to determine the purpose of your analysis and its scope. This includes the geographical locations you are targeting, the extent of data you will need, and the relevant factors to your business. Being aware of your goal helps you avoid going off track while researching.

STEP 2: Conduct research for all six factors

Next, research each of the six factors. Gather the information relevant to you. Use reliable sources such as case studies, government reports, and high-authority websites to enhance the quality of your information.

You can also outsource this task to research firms if you can bear the costs. However, doing it yourself can help you understand your business better. If you are unsure of where to begin, you can start by asking these questions:

• Political: How and to what extent do national and international politics affect your business operations?
• Economical: What are the economic trends that may impact your company in the future? How volatile are the economies of the countries you work in?
• Social: What are the factors that affect your target customers’ buying behavior? Did you notice any trend among your customers recently? Technological: How old is the machinery and/or equipment in your company? Is there a need to upgrade to newer models to grow?
• Legal: What are the laws in the country/countries that you operate in? Are you facing any legal issues that can impact your brand image?
• Environmental: Is your product seasonal? Does your product require a certain kind of weather condition to manufacture? What are your initiatives toward sustainability and other environmental issues?

STEP 3: Interpret and organize data into relevant categories

Now it’s time to put all this data together. Start by writing your company’s description i.e. who you are and what you do. Next, write down your findings from the research such as your repeat customer stats, recent impact on market share due to sudden economic change, etc.

Illustrate this information according to the order of the framework. You can represent the six factors in the form of a matrix for simplicity (see the example below). Finally, conclude the report with a summary of the analysis.

STEP 4: Put the data to use

After gathering, organizing, and interpreting all the information from your PESTLE analysis, it’s time to put this data to use by making predictions, changing strategies, reallocating resources, safeguarding investments, etc.

Be sure to communicate these changes to your team to execute a quick and smooth switch. This will help your team stay on the same page and not deviate too far away from the company goals.

PESTLE analysis of Nestlé

Nestlé is the world’s largest FMCG multinational giant, operating in over 190 countries. The Swiss-based company was founded in 1866 by Henri Nestlé. As of 2021, its net sales amount to USD 93 billion, employing over 273,000 people

Make Better Decisions with a PESTLE analysis

Building a business comes with a great deal of unpredictability. Luckily, tools like the PESTLE analysis can help you navigate unknown waters. Research your external business environment to find valuable facts and gain a macro picture of your industry. Use this info to make better decisions and stay ahead of the game.

Build your Business Plan Faster

with step-by-step Guidance & AI Assistance.

About the Author

Ayush is a writer with an academic background in business and marketing. Being a tech-enthusiast, he likes to keep a sharp eye on the latest tech gadgets and innovations. When he's not working, you can find him writing poetry, gaming, playing the ukulele, catching up with friends, and indulging in creative philosophies.

Related Articles

5 Types Of Competitive Analysis Frameworks

What is SWOT Analysis & How to Conduct it

How to Write a Customer Analysis Section for Your Business Plan

Reach your goals with accurate planning.

No Risk – Cancel at Any Time – 15 Day Money Back Guarantee

Popular Templates

PESTLE Analysis: Explained with Examples & Templates

Edraw content team, do you want to use pestle analysis.

EdrawMind helps move ideas forward, faster and better. Learn from this PESTLE Analysis complete guide to know everything about PESTLE. Just try it free now!

1. What is PESTLE Analysis?

The PESTLE analysis is a tool to identify macro (external) forces an organization faces in its business. More specifically, PESTLE analysis studies the external challenges of a business. And guides to overcome them.

The external challenges are Political, Economic, Social, Technological, Legal, and Environmental. The word "PESTLE" is an acronym for these six factors.

PESTLE analysis is an important marketing tool. It helps every business identify significant changes in the broad business background, thus helping in better strategic business planning.

There are many variants of the analysis to fulfill the needs of businesses with unique requirements. They can use variants as per their needs. For example, if the technological factor doesn't matter to an industry, they can choose a variant that excludes it. A few widely used variants of PESTLE analysis are STEEPLE, SLEPT, and PESEL.

2. What are the 6 PESTLE Factors? With Complete Lists

Now we'll discuss each factor of the PESTLE analysis with examples and try to understand how they impact a business.

1. Political:

The P stands for political, the first and an essential factor of the PESTLE analysis model. Political factor determines how government and government policy may impact a business. Here we analyze the government's policy-making patterns regarding business laws and regulations like tax guidelines. It also deals with business to political relations and their impacts on the overall market. The political stability or instability in a country and their possible outcomes. Government's behavior with businesses in general. The political factors deal with such and many other questions.

Summarization of the political sub-factors:

• Government stability
• Political policy
• Tax guideline
• Fiscal laws
• Trade regulation
• Safety regulation
• Employment laws

2. Economic:

E stands for economic. The economy significantly affects a business's organizational operations. For example, equipment prices and maintenance costs increase with inflation and interest rates increment. Also, with a rise in the currency exchange rate, the duty on imports of raw materials increases, ultimately leading to a rise in the product price. The economy directly impacts the growth and performance of the industry. The end consumer's financial state is also essential. An affordable and quality production puts a base of a successful business; we can achieve it only when the economic factor is carefully analyzed.

Summarization of economic sub-factors:

• Inflation rates
• Interest rates
• Economic growth
• Employment or unemployment rates
• Currency exchange rates
• Raw material costs

S is for social . This factor helps a business understand its end consumer needs. The focus remains on the social environment, public behavior, and identifying emerging trends among the people. It deals with the customers' values, hopes, desires, and fears. It also discusses what motivates or disgusts the general masses and why. Careful analysis of social factors is crucial for a good business plan and strategy. The social factor helps companies do a robust customer analysis to solve their customers' problems with their products or service.

Summarization of social sub-factors:

• Demographic characteristics
• Education levels
• Custom and values of the population
• Cultural trends
• Attitude changes
• Changes in lifestyles

4. Technological:

Technological factors consider the rate of technological development and innovation that could affect a market or industry. Technology is overgrowing, and the industry should be able to acquire that technology as soon as possible to remain in the race before the competition overtakes the market.

Technology also poses threats. For example, it is also possible that a particular product could be replaced by a much cheaper and more advanced alternative of another company. Therefore, keeping oneself updated on the new trends and advancements in an industry is necessary. Every organization must possess the latest technology required to develop and enhance its products or services.

Summarization of technological sub-factors:

• Changes in digital or mobile technology
• Development

It is crucial for an organization to know what is legal and allowed within the territories of the country they operate. They also must be aware of any possible change in laws or legislation in the country and its impact on industry operations.

Summarization of legal sub-factors:

• Employment legislation
• Consumer law
• Healthy and public safety
• Local trade regulation and restrictions
• International trade regulation and prohibitions

6. Environmental:

A successful business model gives importance to the environment . Carbon footprint, climate change, and waste disposal are critical for it. Also, the environmental impacts are essential for the low cost and good quality production. For example, a product suitable for a cold atmosphere should be prepared in a low-temperature area rather than investing in air conditioning. Also, proper environmental conditions ensure that the products remain fine for a more extended period

Summarization of environmental sub-factors:

• Recycling procedures
• Carbon footprint
• Waste disposal
• Sustainability

3. When to use PESTLE Analysis?

PESTLE analysis is used before a strategic business decision. The analysis effectively detects and understands broad, long-term trends in the business background. Therefore, it is extensively used in a range of business planning situations. Let's see where we can use it.

Strategic business planning

With PESTLE analysis, we can obtain contextual information about the business direction, whether the business is growing or not? Growth targets, brand positioning, and risks to productivity ratios.

Expansion of the business

The PESTLE analysis may also help determine when and where a business should expand. It could be determined by considering labor costs, tax laws, and the need for the product where the industry plans to expand.

Workforce Planning

PESTLE analysis can help to plan the required workforce for an organization. For example, a technical workforce will be required for a technology-related business. PESTLE analysis help to choose the right workforce by considering factors like availability of labor, availability of skilled labor, and the cost.

Product development

A PESTLE analysis help determines if a product or service still fulfills the needs of the consumers in the marketplace. It may also tell what product would suit the current market conditions. Also, it reveals why a product fails or succeeds in similar business conditions.

Marketing Planning

PESTLE analysis helps in marketing a brand or product effectively. It deals with the factors required to sell a product proficiently to the customers. Many major organizations use the PESTLE analysis for product promotion and marketing.

Organizational change is a PESTLE analysis example. It deals with the possible opportunities and threats around labor changes, such as skills, increment or decrement in the labor cost, shortages, or current workforce capabilities.

4. How to do PESTLE Analysis?

Before doing PESTLE analysis, it is better to arrange a team of experts for the task. A team could be organized based on six PESTLE factors. It is necessary to obtain information on each area of the PESTLE model. Every element has its importance. If anything is left out, the analysis would not be much helpful. Therefore, field experts are required for this analysis, i.e., a technical team member could be hired to research the technological aspects. Likewise, an environmentalist could be employed to study the environmental factors.

There are ten steps to take to do a successful PESTLE analysis.

• Identify the scope of research that covers the present and possible future scenarios.
• Decide who will collect the information and how.
• Identify appropriate sources of information.
• Gather the information. Make sure to arrange the information correctly to be used again easily.
• What did you find? Analyze the information carefully.
• Make a list and put the items in terms of their importance. Most important things go first, and less important things go last.
• Identify the options you have to address the issues.
• A discussion document for all stakeholders.
• Discuss the findings with stakeholders.
• Discuss the plan and decide on actions to take.

5. PESTLE Analysis Examples

Here are three examples of PESTLE analysis of three highly successful companies.

Amazon PESTLE analysis indicates the significant threats that might pose a problem for the company. Also, it shows the growing opportunities that are being developed with the ever-increasing technology and economy-these opportunities aid in holding their place in the online market.

Google PESTLE Analysis tells that they have many opportunities and some threats. They must prepare a solid plan which can aid them to survive in the highly certain economic factors in any competitive market. Google Should develop a more secure medium for the users.

Tesla's PESTLE Analysis example highlights many vital elements that have been helpful in the company's growth. From the economic perspective, the company has many challenges, but at the same time, from environmental and technological factors company's rapid growth is evident.

6. Pros and Cons of PESTLE Analysis

It encourages critical thinking.

It helps to prepare the business for the future.

It helps to manage business risks and threats.

It helps businesses capitalize on new opportunities.

It is a straightforward approach with a simple framework.

It takes a lot of time to process.

It involves many steps.

It needs to be done at regular intervals.

External factors could change quickly, so it cannot be easy to present and analyze up-to-date information.

7. Key Takeaways

PESTLE analysis helps in the development and growth of businesses and organizations. It helps to analyze strong and weak areas of industries. A proper PESTLE analysis report may help you grow your business. With EdrawMind, you can create eye-appealing PESTLE analysis graphs and reports for your business with a few clicks and easily share them with your team members. You can also select from 100s of already present templates and customize them according to your needs.

You May Also Like

Boost your creativity and productivity with brainstorm templates: a comprehensive guide.

EXAMPLES & TEMPLATES

Health Mind Map Complete Guide With 10+ Examples

Personal mind map complete guide with 10+ examples, business mind map complete guide with 30+ examples, mind map ideas for students: explained with 30+ examples, biology concept map complete guide with 30+ examples.

• Skip to primary navigation
• Skip to main content
• Skip to primary sidebar

PESTLE Analysis

Insights and resources on business analysis tools

How to Do a PESTLE Analysis (3 Step Guide)

Last Updated: Apr 9, 2024 by Thomas Bush Filed Under: PEST Analysis

PESTLE analysis can be extremely powerful when done correctly, which is a lot easier than it sounds. In this guide, we want to make it as easy as possible for you to do a PESTLE analysis.

That’s why we’ve created a simple, three-step approach that you can use to conduct powerful analyses and write meaningful reports, every single time!

1. Know the Categories

The first step in conducting a PESTLE analysis is understanding the PESTLE model itself — in particular, the six categories. The six broad categories of business variables that PESTLE analysis draws from are:

Sociocultural

Technological, environmental.

Now let’s discuss what you need to know about each of those categories.

All businesses are affected by political factors — especially businesses that operate across borders. Broadly, political factors include taxation policies, trade tariffs, and various other rules and regulations.

The local and global economies play a large role in business, and its the economic factors of PESTLE analysis which describe that role. Examples of economic factors include Gross Domestic Product (a measure of the total value of goods and services produced across a year), exchange rates, and inflation.

Sociocultural factors, sometimes referred to as just ‘social’ factors, account for how the societal and cultural aspects of a chosen market might affect business. These factors include age demographics, ethnicities, and cultural differences. One particularly interesting example is the prominence consumerism in a chosen demographic.

Technology is also a crucial factor in business analysis. In PESTLE analysis, technological factors can refer to the development of new technologies or the infrastructure for and access to established ones. Examples include the growing importance of cybersecurity, the widespreadness of mobile phones, and access to an internet connection.

Legal factors tend to have a large overlap with political factors in PESTLE analysis, but they broadly refer to the laws and regulations your business needs to adhere to. Examples include import and export laws or copyright laws.

An increasingly important category is the environmental one. Whether your business is directly related to the outdoors or not, factors such as the depletion of natural resources, climate change, and pollution could very likely affect your operations.

2. Do the Research

Once you’re familiar with the six categories of PESTLE analysis, the next step is to start doing your research . If you’re new to business analysis, this can be a lot more difficult than it sounds. You’re probably wondering what information to include in your PESTLE analysis and where to find it, but we’ll answer both of those questions just now!

What Information to Include

The six categories of PESTLE analysis give you a good idea of what kind of information to include in your analysis. If you’re looking for rules on which specific factors to include, there aren’t any!

It’s up to you to decide what information is relevant to the scope of your analysis. Our suggestion is to have a good thinking about your business, with the goal of determining which categories are most relevant to you. Once you know which categories are most relevant, you can dedicate more time and effort into finding information in those categories.

This is why a good PESTLE analysis requires a good understanding of the business or organization which you’re looking at. The more you know about your business, the more relevant information you’ll choose for analysis.

Where to Find Information

Knowing where to source your information or data is another tough aspect of PESTLE analysis. We’ve found that there’s a huge amount of data available on the web, if you only search hard enough. Try Googling terms like “number of cellphone users in X country” (as a technological factor) or “global year by year economic growth” (as an economic factor).

Aside from search engines and the web, there are two other noteworthy choices for sourcing your information. The first of them is government reports, which often contain large amounts of reliable data on specific topics. The second is third party reports by specialist companies, which often cost a fair bit of money, but include reliable, industry-specific information that you might not find elsewhere.

3. Put It All Together

Once you’ve sourced your information, the only thing left is to put all the pieces together. Again, there’s no set recipe on how to do this, but we include some suggestions on how you can write a PESTLE analysis report below.

How to Write a PESTLE Analysis Report

If we had to write a PESTLE analysis report, i.e. a single document to summarize all the findings of our analysis, here’s how we’d do it:

• Create six sections for the core content. Use one section for each category, and include all the relevant factors within each section. If necessary, divide the sections up into subsections which cover bulkier topics.
• Add an introduction and conclusions. You’ll find that a quick introduction which explains the goal of your PESTLE analysis is extremely useful for readers. Likewise, a conclusion section (with plenty of specific analysis, drawing meaningful conclusions from the data presented in the report) is extremely valuable.

Other Tips for Success

Here are a few more tips on how to succeed with your PESTLE analysis:

• Know your business. As we mentioned above, the content of a PESTLE analysis should be weighted towards the factors which are most relevant to your business. This allows you to keep the analysis (and the report you ultimately create) relevant. If you think an entire category of the PESTLE model isn’t relevant, feel free to leave it out and focus on the others.
• Keep it simple. With vast amounts of data and a whopping six categories in the PESTLE framework, it’s easy to conduct an absolute behemoth of an analysis. Unfortunately, PESTLE analyses are better kept short and sweet. This guarantees that you’ll focus on relevant information, and ensures that readers will walk away from the analysis with specific, actionable ideas.

Image by  StartupStockPhotos  

How to Write PESTLE Analysis: Step by Step Guide (2023-2024)

Introduction

What is pestel analysis, the components of the pest.

• 1)      Political Factors
• 2)      Economic Factors
• 3)      Social Factors
• 4)      Technological Factors
• 5)      Environmental Factors
• 6)      Legal Factors

What Is PESTLE Analysis Used For?

Pest analysis examples.

• 1.      Political Factors
• 2.      Economic Factors
• 3.      Social Factors
• 4.      Technological Factors
• 5.      Legal Factors
• 6.      Environmental Factors
• 5)      Legal Factors
• 6)      Environmental Factors
• 3)      Socio-Cultural Factors

SWOT and PESTLE: Understanding the Difference

Swot analysis, pestle analysis, comparing swot and pestle, minimizing business risks, strategic guidance for foreign ventures, ensuring timely and reliable assistance, preparation for a world of endless possibilities, pestel analysis help.

PESTLE Analysis was originally developed as PEST Analysis in the late 1960s by Harvard professor Francis Aguilar. The acronym was later expanded to PESTLE, incorporating two additional factors, Legal and Environmental, making it a comprehensive tool for analyzing the external macro-environmental factors affecting a business or organization’s operations. Today, PESTLE Analysis is widely used across various industries to assess the impact of political, economic, social, technological, legal, and environmental factors on business strategies and decision-making processes .

In today’s globalized world, businesses have the opportunity to expand their operations into new countries and regions. However, successful expansion requires a thorough understanding of the external factors that can impact a company’s success in a new market. One essential tool for conducting such analysis is the PESTLE analysis, also known as PESTEL analysis.

This comprehensive framework, brought to you by GradeSmiths, examines the Political, Economic, Social, Technological, Legal, and Environmental factors that can influence a business environment. By conducting a PESTLE analysis, entrepreneurs and top managers gain valuable insights into the specific characteristics and challenges of the target market, helping them make informed decisions and mitigate potential risks.

In this article, GradeSmiths delves into a step-by-step guide on how to conduct a PESTLE analysis, providing you with the necessary knowledge to assess the opportunities and risks for entrepreneurship in any country or region. Whether you are an established company planning to expand or a budding entrepreneur seeking new possibilities , understanding the PESTLE analysis is a crucial step towards sustainable growth and success in a dynamic global market.

PESTEL analysis, also known as PESTLE analysis, is a powerful tool used by businesses to systematically assess and understand the external factors that can impact their operations and performance. It provides a comprehensive framework for examining the Political, Economic, Social, Technological, Environmental, and Legal aspects of a business environment.

PEST analysis is a simplified version of PESTLE (PESTEL) analysis, focusing on four key components that influence a business’s environment. Despite covering fewer factors, PEST analysis provides valuable information about the following determinants:

1)      Political Factors

Political factors encompass the influence of government policies, regulations, and political stability on businesses. This includes factors such as taxation policies , trade restrictions, labor laws, and government stability. Understanding the political landscape is crucial for businesses to navigate potential risks and opportunities in a particular market.

2)      Economic Factors

Economic factors refer to the economic conditions and trends that can affect businesses. This includes factors such as economic growth, inflation rates , exchange rates, and consumer spending patterns. Analyzing the economic environment helps businesses make informed decisions and adapt their strategies accordingly.

3)      Social Factors

Social factors examine the social and cultural aspects that can influence businesses. This includes factors such as demographics, lifestyle preferences, attitudes, and cultural norms. Understanding social trends helps businesses tailor their products and services to meet the needs and preferences of their target market.

4)      Technological Factors

Technological factors focus on the impact of technology on businesses. This includes factors such as advancements in technology, digitalization, and innovation. Embracing technological changes can give businesses a competitive edge and open up new opportunities for growth.

5)      Environmental Factors

Environmental factors consider the influence of environmental issues on businesses. This includes factors such as climate change, environmental regulations, and sustainability practices. Being environmentally responsible is not only essential for corporate social responsibility but also for meeting consumer demands.

6)      Legal Factors

Legal factors encompass the legal and regulatory aspects that can affect businesses. This includes factors such as labor laws, intellectual property rights, and consumer protection laws. Complying with legal requirements is vital for businesses to avoid legal issues and maintain a positive reputation.

Conducting a PESTEL analysis enables businesses to gain valuable insights into the external factors that shape their operating environment. It helps them make strategic decisions, identify potential risks, and capitalize on opportunities to achieve long-term success and sustainability. By systematically evaluating these factors, businesses can adapt and thrive in a dynamic and ever-changing business landscape.

PESTLE analysis is a powerful tool used by businesses to assess the external factors that can impact their operations and d ecision-making process . It serves various purposes, including:

• Risk Assessment: PESTLE analysis helps businesses identify potential risks and challenges in the external environment. By analyzing political, economic, social, technological, legal, and environmental factors, companies can anticipate potential obstacles and plan effective risk management strategies.
• Market Entry and Expansion: Before entering a new market or expanding their operations to a different country, businesses conduct PESTLE analysis to understand the market’s overall climate. It allows them to evaluate whether the political and economic conditions are favorable for growth and expansion.
• Strategic Planning: PESTLE analysis plays a crucial role in strategic planning. By examining the external factors, businesses can align their strategies with the prevailing market conditions. It helps them make informed decisions about product development, pricing, marketing, and distribution.
• Identifying Opportunities: Apart from assessing risks, PESTLE analysis also helps companies identify potential opportunities in the market. Understanding social trends, technological advancements, and legal changes can give businesses a competitive edge by capitalizing on emerging opportunities.
• Regulatory Compliance: Legal and environmental factors in PESTLE analysis help businesses ensure compliance with the relevant laws and regulations. Understanding the legal landscape helps companies avoid legal disputes and penalties while operating in a new market.
• Environmental Impact Assessment: The environmental aspect of PESTLE analysis allows companies to evaluate the potential impact of their business activities on the environment. It encourages businesses to adopt sustainable practices and reduce their carbon footprint.

So, PESTLE analysis provides businesses with valuable insights into the external factors that can influence their success. By understanding the political, economic, social, technological, legal, and environmental conditions, companies can make informed decisions, minimize risks, and capitalize on opportunities for growth and prosperity.

If you’re in search of PESTLE analysis examples, you’ve come to the right place. Below, we provide a comprehensive PESTLE analysis template that highlights the various factors affecting a business, including economic, social, technological, legal, and environmental aspects. A well-crafted PESTLE analysis example will delve into critical areas such as consumer protection laws, employment regulations, and corporate social responsibility initiatives.

In today’s dynamic economy, strategic thinking has become a crucial competitive advantage for businesses in every industry. A thorough PESTLE analysis can provide valuable insights into understanding consumer buying habits, trade restrictions, technological advancements, and other crucial factors that can impact a company’s success.

For instance, the economic component of a PESTLE analysis can shed light on the economic conditions of a particular market, such as inflation rates, unemployment rates, and consumer spending patterns. The social aspect can explore demographic trends, cultural norms, and societal attitudes that influence consumer preferences and behaviors. The technological component can analyze the level of technological advancements and innovations that may affect a company’s operations and product development.

Moreover, a comprehensive PESTLE analysis should consider the legal factors, including laws and regulations related to the industry, intellectual property rights , and labor laws. Additionally, the environmental aspect should assess the impact of ecological trends, sustainability practices, and climate change on the business.

By conducting a PESTLE analysis, businesses can gain a deeper understanding of the external environment, anticipate potential challenges and opportunities, and make well-informed decisions to stay competitive in the market. Whether you’re a seasoned entrepreneur or a startup, a PESTLE analysis is an invaluable tool to navigate the complexities of the business landscape and ensure long-term success.

PESTLE Analysis of Apple

When it comes to strategic decision-making, even technological giants like Apple must carefully assess the external factors that can significantly impact their business. Conducting a PESTLE analysis for Apple is an indispensable tool for devising a robust business plan, especially when expanding operations into countries like China.

1.      Political Factors

Political stability is a vital aspect of the external environment. While Apple generally adheres to safety regulations and fiscal policies, it is not immune to the effects of international conflicts. The ongoing trade war between China and the USA exemplifies how government decisions can influence companies. The imposition of higher import taxes and the shifting landscape of cheap manufacturing in China can lead to increased production costs for Apple.

2.      Economic Factors

As a producer of premium-priced products, Apple closely monitors economic growth and purchasing power in foreign markets. Fortunately, Asian countries like China are experiencing stable GDP growth and rising consumer purchasing power, making them attractive prospects for Apple’s expansion plans. Venturing into these thriving regions presents an opportunity for increased profits.

3.      Social Factors

Understanding the social dynamics of a target country is crucial for successful business ventures. In China, where population growth rates exceed expectations, Apple can find an abundant pool of both workers and consumers. Moreover, Apple’s astute marketing efforts position their products as luxury items, appealing to the Asian population’s desire to showcase high status. However, the trade war between the US and China could also have adverse effects on Apple’s sales in the region.

4.      Technological Factors

For Apple, staying at the forefront of technological advancements is paramount. However, competitors like Samsung, Xiaomi, and Lenovo continuously challenge Apple’s market share with innovative offerings. Apple’s target audience may seek out these rival brands if Apple fails to introduce revolutionary features in their gadgets.

5.      Legal Factors

Legal considerations play a significant role in Apple’s operations, encompassing safety laws, copyright protection, and patent legislation. Apple strives to maintain a positive public image by avoiding legal controversies. However, the company does take calculated risks when dealing with copyrighted music and software, potentially risking its loyal customer base in the event of a lawsuit.

6.      Environmental Factors

Environmental issues, including climate change and environmental regulations, cannot be overlooked in the PESTLE analysis. While Apple can mitigate weather-related risks by strategically locating its factories, countries like China’s strict environmental policies push Apple to make eco-friendly choices in its production processes. For instance, Apple’s decision to abandon lithium batteries aligns with the country’s environmental concerns and bolsters the brand’s reputation.

Thus, the PESTLE analysis highlights the crucial macro-environmental factors that significantly impact Apple’s performance in foreign markets. By examining the strengths and weaknesses of Apple’s policies, this analysis emphasizes the importance of adapting to the ever-changing business landscape while capitalizing on the company’s numerous strengths. Despite facing challenges, Apple’s strategic approach and strong market position, positions it for continued success.

McDonald’s PESTLE Analysis

When a prominent corporation like McDonald’s expands its operations into new markets, a comprehensive understanding of the external business environment becomes paramount. Conducting a PESTLE analysis for McDonald’s provides valuable insights into the economic, technological, legal, and environmental factors that can significantly impact its performance in different regions.

As the largest and most renowned fast-food company, McDonald’s must address food safety concerns in various countries. Compliance with local legislation or risk assessment becomes crucial, as some regions have stricter safety standards than the company’s country of origin, the US. Opening branches in riskier regions with uncertain policies, such as Middle Eastern or Asian countries, requires careful consideration.

McDonald’s faces varying economic circumstances in different countries. Slowing economic growth in Eastern Europe poses challenges for local McDonald’s restaurants. On the other hand, the steady growth of economies in Western Europe and developing countries presents opportunities. However, the high employee turnover rate within the company affects its profitability, necessitating efforts to improve employee retention strategies.

Cultural preferences play a significant role in McDonald’s adaptation strategy. Customizing menus to cater to local tastes is exemplified by the Japanese menu, featuring rice and fish, and the Indian menu, tailored to the largely vegetarian preferences . However, the growing trend for healthier lifestyles and weight loss poses a threat to the company’s traditional offerings, necessitating a shift in its strategy.

Embracing global technology trends, McDonald’s has implemented sensory screens for ordering food, attracting customers seeking a broader menu selection. The pandemic accelerated the adoption of contactless restaurant options, making further automation an advantageous strategy for McDonald’s to pursue.

5)      Legal Factors

Shifting employment laws, particularly increases in minimum wages, present significant legal challenges for McDonald’s branches worldwide. The management must adapt its profit distribution strategies accordingly. Additionally, staying compliant with each country’s changing laws, including ingredient bans or restrictions, is essential to ensure uninterrupted operations.

6)      Environmental Factors

McDonald’s has shown a strong commitment to environmental issues, aiming to become more environmentally friendly. Initiatives include switching to recyclable packaging to reduce pollution and adopting energy-efficient technologies in local restaurants. However, global warming poses severe environmental challenges, potentially leading to food shortages and supply chain disruptions.

So, the comprehensive PESTLE analysis allows McDonald’s top managers to make well-informed decisions in both familiar and new markets. By proactively identifying potential risks and opportunities, the company can ensure sustainable success and navigate the ever-changing business landscape effectively.

PESTLE Analysis for Netflix

Netflix, the global streaming giant, has revolutionized the entertainment industry with its on-demand content delivery platform. Employing PESTLE analysis for Netflix uncovers key factors that influence the company’s performance and strategic decisions.

Operating in various countries means Netflix must navigate different political landscapes and regulations. Content censorship and licensing agreements can impact the availability of certain shows or movies in specific regions. Additionally, government policies related to media content and distribution may affect Netflix’s expansion plans.

Economic conditions in different markets influence consumer spending on entertainment services. Subscription prices and local competition can impact Netflix’s market penetration and revenue generation. Fluctuations in exchange rates can also affect the cost of content acquisition and licensing agreements.

Changing consumer preferences and viewing habits influence Netflix’s content strategy. The platform must cater to diverse audiences and cultural preferences to remain relevant globally. Social trends like cord-cutting and binge-watching shape the company’s content release and distribution strategies.

Netflix heavily relies on technology for content delivery and user experience. Continuous investment in streaming technology and platform optimization is critical for maintaining customer satisfaction. Technological advancements, such as 4K streaming and virtual reality, provide opportunities for enhancing user engagement.

Legal challenges related to copyright infringement and intellectual property rights are significant concerns for Netflix. The company must navigate complex licensing agreements and negotiate content distribution deals with production studios and content creators. Compliance with data protection and privacy laws is also crucial to maintain consumer trust.

While Netflix’s primary operations are digital, the company’s environmental impact includes energy consumption for data centers and content delivery networks. Adopting sustainable practices, such as using renewable energy sources for data centers, contributes to the company’s environmental responsibility.

Overall, the PESTLE analysis for Netflix reveals the complexities and challenges the company faces in the dynamic entertainment industry. Understanding these factors enables Netflix to make informed decisions, adapt to changing market conditions, and continue its global growth and success in the ever-evolving streaming landscape.

Coca Cola PESTLE Analysis

In the pursuit of discovering new markets, astute managers rely on the comprehensive PESTLE analysis for business. For Coca Cola, this analysis delves into the political, economic, social, technological, legal, and environmental conditions, providing valuable insights into its global operations.

As a major food and beverage company, Coca-Cola operates under the purview of country-specific legislation, including consumer protection and copyright laws. While most countries readily permit the sale of Coca-Cola products, some regions face trade and investment restrictions due to sanctions. Countries such as Cuba, North Korea, and Russia represent areas where Coca-Cola’s operations may be limited.

Coca-Cola enjoys unparalleled brand recognition, owning a significant portion of the market share for sweet beverages worldwide. However, despite steady demand in most countries, shifting consumer trends towards healthier diets may impact sales. The company may face challenges if health-conscious individuals reduce their consumption of sugary beverages, potentially leading to lower profits.

Operating in diverse countries, Coca-Cola successfully tailors its marketing strategies to match the socio-cultural aspects of each nation. Customizing tastes and introducing unique bottle designs, such as bottles with names, has garnered widespread popularity and increased sales in various regions, including Japan.

Catering predominantly to the younger generation, Coca-Cola leverages modern technologies to capture consumer attention and maintain a competitive edge. Extensive investments in social media marketing, hashtags, and online games appeal to trendy and tech-savvy consumers, contributing to the brand’s popularity.

While Coca-Cola has navigated patent and copyright matters successfully, the company has faced challenges concerning employee treatment, including protests against unfair policies and allegations of racial discrimination. Addressing these issues and fostering a positive work environment is crucial for improving the company’s public image.

As the world’s largest soft drinks producer, Coca-Cola grapples with environmental concerns raised by eco-activists. Water shortage, particularly in regions where factories are located, poses a significant challenge, given the company’s substantial water consumption. Efforts to promote recyclable materials and reduce plastic pollution are essential steps towards enhancing environmental sustainability.

PESTLE analysis provides Coca-Cola with a robust strategy, guiding the company to navigate potential pitfalls and secure a strong market position. By understanding the impact of various external factors, Coca-Cola can make informed decisions to thrive in an ever-changing global business landscape.

PESTLE Analysis for Amazon

As the leading global e-commerce giant, Amazon caters to the needs of millions of satisfied customers with its smart tactical and strategic plans . Employing PESTLE analysis for Amazon reveals the company’s strengths and weaknesses, enabling effective decision-making and strategic planning.

Operating in multiple countries necessitates navigating complex political environments. While Amazon thrives in politically stable regions, unpredictable markets in Eastern Europe and the Middle East pose challenges. Additionally, rising foreign trade taxes and cybersecurity failures may impact the company’s operations.

Amazon faces challenges in some markets due to high product prices and increasing shipping costs, particularly in developing countries. Nevertheless, the company can leverage automation to optimize processes and offer competitive prices. Competitors like Aliexpress and Walmart also influence market dynamics in Asian countries and the USA.

The income levels of different countries influence Amazon’s sales, with more developed nations witnessing higher e-commerce adoption rates. The COVID-19 pandemic accelerated the cultural shift towards online shopping, benefiting Amazon’s revenues . However, automation has led to job losses, raising concerns about social implications.

Technology and innovation are at the core of Amazon’s business model. The company continually invests in research and development to enhance its delivery processes and customer experience. Innovations like drone deliveries and efficient customer service through live chats or emails solidify Amazon’s technological edge.

Navigating various legal requirements in different countries is a complex challenge for Amazon. Adhering to consumer and employment laws is essential to protect the company’s reputation and mitigate potential losses. However, counterfeit accusations and data privacy concerns may require strategic adjustments.

Amazon demonstrates a commitment to environmental sustainability by encouraging longer delivery options to reduce emissions. Despite e-commerce’s lower environmental impact compared to brick-and-mortar shopping, the company strives to become even more eco-friendly. These initiatives improve the brand image and foster customer loyalty.

Therefore, the PESTLE analysis provides invaluable insights into Amazon’s business environment, enabling the company to assess its impact on the market and devise effective strategies to address emerging challenges. By leveraging this analysis, Amazon can stay ahead in the dynamic and ever-changing e-commerce landscape.

How do PESTLE Factors Affect a Business

In today’s highly competitive business landscape, companies must navigate a myriad of external factors that influence their operations and success. PESTLE analysis provides a comprehensive framework to assess the macro-environmental factors that impact a business. This one-page analysis delves into the significance of PESTLE factors and their effects on businesses worldwide.

Political factors play a crucial role in shaping a business’s operating environment. Government policies, regulations, and stability can either facilitate or hinder business operations. For instance, political stability encourages investments and expansion, while political instability may create uncertainty and deter foreign investors. Additionally, changes in taxation policies, trade agreements, and labor laws can impact a company’s profitability and strategic decisions.

Economic conditions significantly influence business performance. Factors such as GDP growth, inflation rates, and exchange rates affect consumer spending and purchasing power. In a thriving economy, consumers are more likely to spend on goods and services, boosting businesses’ revenues. Conversely, an economic downturn may lead to reduced consumer spending and demand for products and services. Furthermore, fluctuations in commodity prices and raw material costs directly impact a company’s production costs and profitability.

3)      Socio-Cultural Factors

Societal norms, cultural preferences, and consumer behavior have a profound effect on businesses. Companies must adapt their products, marketing strategies, and business practices to cater to the unique needs and expectations of different demographics and cultures . For example, consumer preferences for eco-friendly products have prompted businesses to adopt sustainable practices and eco-conscious initiatives. Understanding socio-cultural trends is essential for businesses to connect with their target audiences and remain relevant in the market.

The rapid pace of technological advancements shapes the business landscape in significant ways. Embracing technology is crucial for companies to stay competitive and meet consumer demands. Innovations in automation, artificial intelligence, and data analytics streamline operations, enhance efficiency, and enable personalized customer experiences. Failure to adopt technology can leave businesses lagging behind and vulnerable to disruptors in the industry.

Legal factors encompass various regulations and laws that businesses must comply with to operate ethically and lawfully. Intellectual property rights, labor laws, consumer protection laws, and data privacy regulations are just a few legal considerations that impact businesses. Non-compliance with legal requirements can lead to hefty fines, reputational damage, and even business shutdowns. Staying informed about legal changes and proactively adapting to them is crucial for long-term sustainability.

Environmental factors have become increasingly significant for businesses as sustainability and corporate social responsibility gain prominence. Concerns about climate change, environmental impact, and resource depletion have urged businesses to adopt eco-friendly practices and reduce their carbon footprint. Embracing sustainable initiatives not only benefits the environment but also enhances a company’s reputation and attracts environmentally-conscious consumers.

In the realm of business and marketing, strategic analysis frameworks play a pivotal role in understanding the internal and external factors that impact a company’s performance and decision-making. Two widely used frameworks are SWOT and PESTLE analysis . While they share the common goal of aiding businesses in their strategic planning, they differ in their focus and scope. This article aims to delve into the disparities between SWOT and PESTLE analysis, emphasizing their distinct applications and significance in the business world.

SWOT analysis stands for Strengths, Weaknesses, Opportunities, and Threats. It is an internal and external assessment tool used to evaluate a company’s current position and potential for growth.

• Strengths : SWOT analysis identifies a company’s internal strengths, such as core competencies, unique selling points, and resources that give it a competitive advantage in the market.
• Weaknesses: This aspect highlights the internal limitations, vulnerabilities, and areas in which a company may be falling short compared to its competitors.
• Opportunities: SWOT analysis explores external factors, such as market trends, emerging opportunities, or changing customer preferences, that a company can leverage to expand its business.
• Threats : The analysis also examines external factors that pose potential risks or challenges to the company’s growth and profitability.

SWOT analysis is particularly useful for startups and new products, providing a comprehensive overview of their competitive position and potential pathways for development.

PESTLE analysis, on the other hand, stands for Political, Economic, Social, Technological, Legal, and Environmental analysis. It is a macro-environmental framewor k that assesses the external factors that influence a company’s operations.

• Political: This factor examines how government policies, regulations, and political stability impact the business environment.
• Economic: PESTLE analysis considers economic factors like GDP growth, inflation rates, exchange rates, and consumer spending, which can significantly affect a company’s performance.
• Social: The analysis delves into societal factors, including demographics, cultural trends, and consumer preferences, which influence market demand and customer behavior.
• Technological: This aspect explores technological advancements and innovations that can create new opportunities or disrupt industries.
• Legal: Legal factors encompass the impact of laws, regulations, and compliance requirements on business operations.
• Environmental: PESTLE analysis also considers the impact of environmental factors, such as climate change, sustainability initiatives, and eco-friendly practices, on businesses.

PESTLE analysis provides businesses with valuable insights into the broader market environment, helping them identify potential risks and opportunities in their expansion endeavors.

Both SWOT and PESTLE analyses are essential strategic tools that complement each other in the decision-making process.

SWOT analysis focuses on a company’s internal factors and immediate competitive landscape, providing a snapshot of its strengths, weaknesses, opportunities, and threats.

PESTLE analysis, on the other hand, assesses the external macro-environment, considering broader factors that may influence the company’s market entry, expansion, and sustainability .

Thus, SWOT and PESTLE analysis are two distinct yet complementary frameworks that offer valuable insights into a company’s strategic planning process. SWOT analysis helps businesses identify their internal strengths and weaknesses and external opportunities and threats, while PESTLE analysis provides a broader perspective on the macro-environmental factors that may impact business operations. By leveraging both frameworks, businesses can make informed decisions, capitalize on opportunities, mitigate risks, and navigate the ever-evolving landscape of the business world.

Why Is PESTLE Analysis Essential for Business Expansion

When it comes to expanding a business into new markets, comprehensive research and strategic planning are paramount. PESTLE analysis emerges as a powerful tool to explore uncharted territories. This framework delves into every critical detail that can either propel or hinder business activity in a foreign market. Unlike superficial analyses, PESTLE analysis dives deep into economic, cultural, and legal specifics, ensuring a holistic understanding of the external environment. Moreover, given the ever-changing dynamics of the global landscape, PESTLE analysis should be an ongoing process.

The ultimate goal of conducting a PESTLE analysis is to minimize risks and uncertainties for a company operating in unfamiliar territories. By thoroughly examining the current situation in a country and analyzing its historical experiences, businesses can gain valuable insights into potential future events. However, certain factors, such as natural disasters or international conflicts, remain unpredictable. In such cases, having a well-thought-out contingency plan becomes crucial to navigate unforeseen challenges successfully.

A well-executed PESTLE analysis serves as a compass, providing companies with valuable recommendations for their foreign market strategy. The thorough examination of political, economic, social, technological, legal, and environmental factors equips businesses with the necessary knowledge to make informed decisions and seize opportunities. Armed with such insights, companies can align their operations with the unique characteristics of each market and tailor their approach accordingly.

At times, businesses face tight deadlines and require prompt and reliable solutions. Our essay writing service stands ready to offer timely assistance, providing you with a comprehensive PESTLE analysis that meets your specific requirements. With a team of skilled professionals, we ensure that your analysis is delivered on time without compromising on quality.

In conclusion, embracing the power of a PESTLE analysis equips companies with a clear vision and a well-structured approach to navigate the complexities of international markets. A thorough assessment of the external environment provides the groundwork for making informed decisions, mitigating risks , and seizing opportunities. As businesses venture into a world of endless possibilities, proper preparation through PESTLE analysis becomes a catalyst for success, enabling them to thrive in diverse and dynamic global landscapes.

In a world where expansion is a constant aspiration, PESTLE analysis remains an indispensable ally for businesses seeking to chart their course towards growth, sustainability, and global success.

Frequently Asked Questions (FAQ) about PESTLE Analysis

• What is PESTLE analysis, and how does it differ from SWOT analysis?

PESTLE analysis is a strategic tool that examines the macro-environmental factors influencing a business, including political, economic, social, technological, legal, and environmental aspects. On the other hand, SWOT analysis evaluates both internal factors (strengths and weaknesses) and external factors (opportunities and threats) that impact a company. While PESTLE focuses on the external environment, SWOT delves into both internal and external aspects of a business.

• When should businesses use PESTLE analysis?

PESTLE analysis is particularly useful for companies looking to expand into new markets. It helps them thoroughly research and understand the various factors that could impact their business operations in unfamiliar territories . This analysis provides essential insights to strategize and make informed decisions when entering new markets.

• What are the components of a PESTLE analysis?

The components of PESTLE analysis include Political, Economic, Social, Technological, Legal, and Environmental factors. By analyzing these factors, businesses can gain a comprehensive understanding of the external environment and its potential effects on their operations.

• How often should a PESTLE analysis be conducted?

PESTLE analysis should be a recurring process, especially for companies operating in dynamic and ever-changing global markets. External factors can shift rapidly, making regular assessments vital to adapt and respond to new challenges and opportunities.

• How does PESTLE analysis help minimize risks for businesses?

PESTLE analysis enables businesses to identify potential risks and uncertainties in foreign markets. By examining political stability, economic conditions, social trends, technological advancements, legal regulations, and environmental issues , companies can develop contingency plans and mitigate risks associated with operating in unfamiliar territories.

• How does PESTLE analysis assist in strategic decision-making?

A thorough PESTLE analysis provides crucial insights into the external environment, allowing businesses to make informed strategic decisions. Understanding the political, economic, social, technological, legal, and environmental factors helps companies tailor their market entry strategies and adapt their products or services to meet the specific needs and demands of each market.

• Can PESTLE analysis be applied to specific companies?

Yes, PESTLE analysis can be tailored to evaluate the impact of external factors on specific companies. For example, the blog includes PESTLE analysis examples for well-known companies like Apple, McDonald’s, Amazon, and Coca-Cola. By conducting a company-specific PESTLE analysis, businesses gain valuable insights into the unique challenges and opportunities they might encounter .

• How can businesses prepare for potential environmental challenges?

PESTLE analysis addresses environmental factors, which include ecological issues like climate change and environmental regulations. Businesses can prepare for potential environmental challenges by adopting eco-friendly practices, minimizing their environmental footprint, and aligning their operations with sustainable and environmentally responsible initiatives.

• Where can businesses seek professional help with PESTLE analysis?

Businesses can seek professional assistance with PESTLE analysis from expert research paper writing services, like GradeSmiths. These services offer comprehensive and in-depth analyses tailored to specific business needs and deadlines, providing businesses with valuable insights to drive their expansion and decision-making processes.

• How does PESTLE analysis contribute to long-term success in the global market?

PESTLE analysis equips businesses with a holistic understanding of the external environment, enabling them to make strategic decisions that align with market dynamics. By minimizing risks, seizing opportunities, and adapting to changes in the global market, PESTLE analysis becomes a catalyst for long-term success and sustainability in an increasingly interconnected and competitive world.

🚀 Struggling with your PESTEL analysis essay? No worries! Gradesmiths is your ultimate solution! 🌟 Our skilled team is here to assist you in navigating the complexities of political, economic, social, technological, environmental, and legal factors with ease. 📚💼 With our reliable support, you’ll breeze through your essay, showcasing a deep understanding of your subject and impressing your professors! 🌍💡 Don’t stress – trust Gradesmiths to boost your academic success! 🎓🏆 Get in touch with us today and conquer your PESTEL analysis like a pro! 📧📞 Let’s ace this together! 🤝📝

• RESEARCH PAPER FOR SALE
• RESEARCH PAPER WRITER
• RESEARCH PROPOSAL WRITING SERVICES
• SCHOLARSHIP ESSAY HELP
• SPEECH HELP
• STATISTICS HOMEWORK HELP
• TERM PAPER WRITING HELP
• THESIS EDITING SERVICES
• THESIS PROPOSAL WRITING SERVICE
• TRIGONOMETRY HOMEWORK HELP
• ADMISSION ESSAY WRITING HELP
• BIOLOGY PAPER WRITING SERVICE
• BOOK REPORT WRITING HELP
• BUY BOOK REVIEW
• BUY COURSEWORKS
• BUY DISCUSSION POST
• BUY TERM PAPER
• CAPSTONE PROJECT WRITING SERVICE
• COURSEWORK WRITING SERVICE
• CRITIQUE MY ESSAY
• CUSTOM RESEARCH PAPER
• CUSTOMER CONDUCT
• DISSERTATION EDITING SERVICE
• DISSERTATION WRITERS
• DO MY DISSERTATION FOR ME
• DO MY POWERPOINT PRESENTATION
• EDIT MY PAPER
• English Research Paper Writing Service
• ENGLISH RESEARCH PAPER WRITING SERVICE
• ESSAY WRITING HELP
• ESSAYS FOR SALE
• GRADUATE PAPER WRITING SERVICE
• LAW ASSIGNMENT WRITING HELP
• MARKETING ASSIGNMENT WRITING HELP
• NON-PLAGIARIZED ESSAYS
• NURSING ASSIGNMENT HELP
• PAY FOR COURSEWORK
• PAY FOR ESSAYS
• PAY FOR LITERATURE REVIEW
• PAY FOR PAPERS
• PAY FOR RESEARCH PAPERS
• PERSONAL STATEMENT EDITING SERVICE
• PERSONAL STATEMENT WRITER
• PERSUASIVE ESSAY WRITING HELP
• PERSUASIVE ESSAY WRITING SERVICES
• PHD THESIS WRITING SERVICE
• PROOFREAD MY PAPER
• PSYCHOLOGY ESSAY WRITING SERVICES
• THESIS STATEMENT HELP
• WRITE MY ANNOTATED BIBLIOGRAPHY FOR ME
• WRITE MY CASE STUDY
• WRITE MY DISCUSSION BOARD POST
• WRITE MY LAB REPORT

How to do a PESTEL analysis

PESTEL , also known as PEST is a descriptive analysis of the company’s environment. When we talk about the company’s environment or context, we refer to all those external factors that are relevant to the organization, so its analysis is vital for the generation of strategies or campaigns in the short and long term.

Today in Ingenio Empresa we explain what PESTEL analysis is, how it is done and a practical example.

Table of Contents

What is PESTEL analysis?

The PESTEL analysis consists of the description of the company’s context or environment through the consideration of factors:

• Technological
• Environmental

The analysis can be limited to the first 4 factors, remaining as a PEST analysis, since environmental or legal issues are not always applicable.

Some analysts go further by considering factors such as Industrial (PESTELI), Ethics (PESTALE) and Demographics (PESTALD).

What is PEST analysis for?

That said, PEST, PESTEL or whatever you want to call it, allows you to perform a strategic analysis to determine the current context in which the organization moves, which gives you an input for the creation of strategies to either take advantage of the opportunities obtained in the analysis, or act against potential risks.

This is why it is such a widely used tool by organizations. In addition, ISO standards such as 9001 include among their requirements the understanding of the organization’s context. Tools such as PESTEL evidences the fulfillment of these requirements.

Thus, we can consider 3 essential benefits of PESTEL:

• It is a tool of simple application, because it is very easy to understand and staff can appropriate it, this greatly facilitates the teamwork.
• It can be integrated with other tools such as SWOT or Porter’s Forces, and besides, it can be easily replicated in organizational strategy.
• It can be used in any type of organization (large, medium, small) or in large projects.

How to perform a PESTEL analysis

The PESTEL analysis allows us to characterize the context, understanding how it affects the product or service.

Actually, performing this analysis is not complex. How to do it is limited to reflection about the aspects of the environment that concern to the company.

Therefore, the success of the tool lies in the composition of the team that performs the exercise. Consider a team with knowledge of the company, participative. Better if it is made up of personnel who work in the field. Multidisciplinary. With people who are curious and informed about the country’s situation. Workers from different processes who know what they are talking about is vital.

Once the team is defined, prepare the worksheet. Although for group exercises it is convenient to use sheets of paper and post-it notes, I believe that this is not the case. A computer, an Excel spreadsheet (at the end of the post I will give you one) and a group of people ready to define the business environment is more than enough.

A good practice is to define the type of impact (positive or negative) and whether it will be short, medium or long term.

Then, the analysis of each factor begins:

Political factors

Evaluates how government intervention may affect the company.

• Changes in government and its electoral programs
• Fiscal policy
• Government subsidies
• Wars and conflicts
• Changes in legislation
• Changes in trade agreements
• International agreements
• Internal and external conflicts
• Political movements

An analysis of this type can show that the company must make “strategies” towards the politicians of a country so that the laws that are generated in the government bring benefits. Taxes placed on soft drinks or tobacco are examples of this, and companies can generate strategies to remove these measures.

Economic factors

Consider how the national and international macroeconomic environment may affect the organization.

• Employment rates
• Economic cycle
• Economic decisions of other governments
• Currency devaluation and revaluation
• Trends in distribution channels
• Government deficits
• Consumer confidence index
• Market protectionism

For example, the imposition of tariffs by Donald Trump’s decision on Toyota is part of an economic variable to be taken into account.

Social Factors

Evaluates culture, religion, beliefs, habits, preferences, etc.

• Education level
• Purchasing patterns
• Customer opinions
• Opinions or perception of the media
• Income level

Here’s a far-fetched example: Think that you have a company producing vacuum-packed meat and you want to open a plant on the Asian continent. Considering that the cow is a sacred animal in India, would you think of this country to build the factory there?

Technological factors

Today more important than ever. Every day brings a technological advance and there is no sector that cannot benefit from it. In my experience, this is the most difficult and untapped aspect of all. The challenge is for the organization to be aware of what kind of technologies can benefit it.

• Machine Learning
• New programming codes
• New machinery or technological devices
• 3D printing
• Technology replacement
• Software in the cloud
• Obsolescence
• Incentives for technology use

Ecological or environmental factors

Evaluates how the environment affects the organization.

• Climate change
• Consumption of non-renewable resources
• Environmental policies
• Liquid gases
• Natural hazards

For example, health centers, which are required by law to separate hospital waste.

Legal factors

Companies must comply with the law and the law is constantly changing. Sometimes not only the law of the country where the organization is located applies, but also the law of the country where you want to be.

• Intellectual property
• Occupational health and safety
• Sector regulation
• Protection laws
• Minimum wage

Example of a PESTEL analysis of a company

Consider a company that manufactures water purifying filters. In their strategic planning exercise, they perform a PESTEL analysis to determine the risks and opportunities of the business.

In the political variables they consider:

• A recent change of president.
• Mayoral elections to be held in two years.
• Approaches to conclude a trade agreement with Central America.

In the economic variables they define:

• Currency changes.
• The effect of the increase in the interest rate.
• The increase in exports in the last year.

Within the social variables they define:

• Change in society’s thinking about self-care.

Then in the technological variables:

• 3D printing as an opportunity to optimize costs.
• Loss of magnetic information.
• In the environmental variables they define:
• The work to obtain environmental certifications.
• The work with production waste.

Finally, in the legal variables:

• The mandatory implementation of the occupational health and safety management system.

Having done this, the company defines how these factors impact the expected timeframe and the type of impact.

The result is as follows:

The PEST analysis and its relation to the SWOT analysis

The PEST analysis can serve as an input for the SWOT analysis . This is usually done as a way of addressing chapter 4 of the ISO 9001 standard for the implementation of a quality management system.

If we take into account that the PEST describes the organizational environment, many of the results of this analysis will imply a large part of the opportunities and threats of the SWOT Analysis. Hence, both tools can be integrated to determine the context of the organization.

1 thought on “How to do a PESTEL analysis”

Leave a comment cancel reply.

Save my name, email, and website in this browser for the next time I comment.

Home — Essay Samples — Business — Business Analysis — PEST Analysis: the Key Factors

Pest Analysis: The Key Factors

• Categories: Business Analysis

About this sample

Words: 1386 |

Published: Oct 22, 2018

Words: 1386 | Pages: 3 | 7 min read

Table of contents

Aware of (p/e/s/t):, works cited:, political (legal):, economical:, social (environment):, technological:, investment 1:, investment 2:, investment 3:, investment 4:.

• Parrott, W. G. (1991). The emotional experiences of envy and jealousy. In R. J. Sternberg & J. Kolligan Jr. (Eds.), Competence considered (pp. 149-165). New Haven: Yale University Press.
• Smith, R. H., Parrott, W. G., Diener, E. F., Hoyle, R. H., & Kim, S. H. (1999). Dispositional envy. Personality and Social Psychology Bulletin, 25(8), 1007-1020.
• Salovey, P., & Rodin, J. (1984). Some antecedents and consequences of social-comparison jealousy. Journal of Personality and Social Psychology, 47(4), 780-792.
• van de Ven, N., Zeelenberg, M., & Pieters, R. (2009). The envy premium in product evaluation. Journal of Consumer Research, 36(2), 382-395.
• Tesser, A. (1991). Emotion in social comparison and reflection processes. In J. Suls & T. A. Wills (Eds.), Social comparison: Contemporary theory and research (pp. 115-141). Hillsdale, NJ: Erlbaum.
• Salovey, P., & Rodin, J. (1986). The psychology of envy and its relationship to depression, anger, and self-esteem. In R. J. Hetherington, E. M. Aronson, & L. G. Tennenbaum (Eds.), Advances in experimental social psychology (Vol. 19, pp. 333-378). New York: Academic Press.
• Cohen-Charash, Y., & Mueller, J. S. (2007). Does perceived unfairness exacerbate or mitigate interpersonal counterproductive work behaviors related to envy?. Journal of Applied Psychology, 92(3), 666-680.
• Lange, J., Crusius, J., & Hagemeyer, B. (2016). The evil queen's dilemma: Linking narcissistic admiration and rivalry with schadenfreude and aggression. Personality and Social Psychology Bulletin, 42(9), 1216-1230.
• Smith, R. H. (2008). Envy and its transmutations. In M. Lewis, J. M. Haviland-Jones, & L. F. Barrett (Eds.), Handbook of emotions (pp. 637-651). New York: Guilford.
• Matsunaga, M. (2010). How do people envy others?: Revisiting the role of inferiority, hostility, and depression in the social comparison- envy link. Personality and Individual Differences, 49(5), 454-459.

Cite this Essay

Let us write you an essay from scratch

• 450+ experts on 30 subjects ready to help
• Custom essay delivered in as few as 3 hours

Get high-quality help

Prof. Kifaru

Verified writer

• Expert in: Business

+ 120 experts online

By clicking “Check Writers’ Offers”, you agree to our terms of service and privacy policy . We’ll occasionally send you promo and account related email

No need to pay just yet!

Related Essays

3 pages / 1493 words

3 pages / 1315 words

4 pages / 1924 words

4 pages / 2199 words

Remember! This is just a sample.

You can get your custom paper by one of our expert writers.

121 writers online

Still can’t find what you need?

Browse our vast selection of original essay samples, each expertly formatted and styled

Related Essays on Business Analysis

This report was initiated to find out why Eastman Kodak was wiped out from the photography industry, evaluate Kodak’s digital imaging strategy and why it failed, provide better alternatives to the strategy and finally point out [...]

Organizations that need to cement their place regarding competitive advantage need to put in place strategies that will make it possible for remaining efficient. Productivity and high levels of innovation are also important when [...]

Glo-Bus, a global business simulation game, offers college students a unique opportunity to gain hands-on experience in making strategic business decisions. The purpose of the Glo-Bus Final Report is to critically evaluate the [...]

Panda Express is one of the fastest casual restaurant chains delivering American Chinese cuisine all over headquartered at Rosemead, California. It has almost 2000 outlets in 50 cities of US, the District of Columbia, Puerto [...]

Scientific Glass, Inc., a glassware manufacturing company looking to take advantage of growth opportunities within its industry, both domestically and internationally. Before leaping into expansion the company is well aware they [...]

The feasibility of the project is analyzed in this phase and business proposal is put forth with a very general plan for the project and some cost estimates. During system analysis the feasibility study of the proposed system is [...]

Related Topics

By clicking “Send”, you agree to our Terms of service and Privacy statement . We will occasionally send you account related emails.

Where do you want us to send this sample?

By clicking “Continue”, you agree to our terms of service and privacy policy.

Be careful. This essay is not unique

This essay was donated by a student and is likely to have been used and submitted before

Download this Sample

Free samples may contain mistakes and not unique parts

Sorry, we could not paraphrase this essay. Our professional writers can rewrite it and get you a unique paper.

Please check your inbox.

We can write you a custom essay that will follow your exact instructions and meet the deadlines. Let's fix your grades together!

Get Your Personalized Essay in 3 Hours or Less!

We use cookies to personalyze your web-site experience. By continuing we’ll assume you board with our cookie policy .

• Instructions Followed To The Letter
• Deadlines Met At Every Stage
• Unique And Plagiarism Free

Barclays Bank PESTEL Analysis

Before we dive deep into the PESTEL analysis, let’s get the business overview of Barclays Bank.

• History and Origin:  Barclays has its roots in the goldsmith banking business established in the City of London in 1690. James Barclay became a partner in the business in 1736, and the company name “Barclays” became associated with it.
• Barclays UK : This division provides retail banking, local business banking, and wealth management services within the UK.
• Barclays International : This covers corporate banking, investment banking, and wealth management operations outside the UK.
• Retail Banking : Current accounts, savings accounts, mortgages, personal loans, and other retail banking services.
• Credit Cards : Under the Barclaycard brand, they offer credit card services in many countries.
• Wealth Management : Investment management, wealth planning, and private banking services.
• Corporate Banking : Business loans, treasury solutions, commercial mortgages, and other corporate finance services.
• Investment Banking : Financial advisory, underwriting, and brokerage services.
• Financial Performance 2022 : Refer to the image below

Here is the PESTEL analysis of  Barclays Bank

A PESTEL analysis is a strategic management framework used to examine the external macro-environmental factors that can impact an organization or industry. The acronym PESTEL stands for:

• Political factors: Relate to government policies, regulations, political stability, and other political forces that may impact the business environment. 
• Economic factors: Deal with economic conditions and trends affecting an organization’s operations, profitability, and growth. 
• Sociocultural factors: Relate to social and cultural aspects that may influence consumer preferences, lifestyles, demographics, and market trends.
• Technological factors: Deal with developing and applying new technologies, innovations, and trends that can impact an industry or organization. 
• Environmental factors: Relate to ecological and environmental concerns that may affect an organization’s operations and decision-making.
• Legal factors: Refer to the laws and regulations that govern businesses and industries. 

In this article, we will do a PESTEL Analysis of Barclays Bank.

PESTEL Analysis Framework: Explained with Examples

• Regulatory Environment:  The banking sector is highly regulated, and any changes in banking laws and financial regulations can impact Barclays’ operations. These regulations include capital requirements, liquidity standards, and customer protection measures.
• Brexit:  Barclays, being a UK-based bank, has been affected by the political implications of Brexit. Uncertainties surrounding Brexit negotiations, potential economic implications, and changes in trade relationships have posed challenges for the bank.
• Global Political Relations:  Barclays has a global presence, and hence, its operations in different countries are susceptible to the political relationships between the UK and those countries. Bilateral and multilateral relations can influence the bank’s business in particular regions.
• Public Perception and Trust:  The banking industry has been under scrutiny, especially after the 2008 financial crisis. Political narratives focusing on banking accountability, transparency, and ethical conduct can shape public opinion and influence the bank’s reputation.
• Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Policies:  Stringent AML and CTF regulations require banks like Barclays to invest significantly in compliance measures, monitoring, and reporting.

• Interest Rates:  The central banks’ decisions on interest rates directly impact Barclays’ lending and borrowing rates. Higher interest rates can increase the cost of borrowing, potentially reducing loan demand, but can also lead to higher interest income for the bank.
• Economic Growth:  The overall economic growth rate of countries where Barclays operates influences the demand for banking services. In thriving economies, businesses and individuals are more likely to borrow, invest, and save.
• Exchange Rates:  Being a global bank, Barclays engages in significant foreign currency transactions. Fluctuations in exchange rates can impact the bank’s foreign investments, assets, and revenue from international operations.
• Inflation:  Inflation rates affect the purchasing power of consumers and businesses. High inflation can erode the real value of savings, affecting the bank’s deposit base and influencing interest rates.
• Property Market Dynamics:  The property market’s health is crucial for Barclays, given its exposure to mortgages. A buoyant property market can increase mortgage demand, while a downturn can raise the risk of defaults.
• Consumer Spending and Confidence:  Economic factors influencing consumer confidence can determine spending behaviors, affecting demand for various banking products like credit cards and personal loans.
• Public and Private Debt Levels:  High public or private debt levels in economies where Barclays operates can influence the bank’s lending practices and risk assessments.

Sociocultural

• Changing Customer Expectations:  With the advent of technology, customers’ expectations from banking services have evolved. They expect seamless online banking, instant services, and personalized experiences. Barclays needs to cater to these changing expectations to remain relevant and competitive.
• Financial Literacy:  The level of financial literacy among the population impacts how customers interact with banking services. Educating customers can increase financial product use and reduce the risk of defaults.
• Cultural Attitudes Towards Debt:  Different cultures have varying views on borrowing and debt. In some cultures, taking on debt might be seen negatively, while others view it as a standard financial strategy.
• Ethical Banking:  There’s a growing trend towards ethical banking, where customers prefer banks that follow ethical practices, invest in sustainable ventures, and avoid sectors like fossil fuels.
• Urbanization:  As more people move to urban areas, there’s a change in banking needs, with possibly a higher demand for digital banking services and lesser dependency on physical branches.
• Attitude Towards Savings:  Societal attitudes towards savings vs. spending can significantly impact a bank’s deposit base and the demand for investment products.
• Globalization and Mobility:  As people become more globally mobile, there’s a need for banking services that cater to international clients, expatriates, and frequent travelers.

Technological

• Digital Banking:  The rise of online banking platforms and apps has shifted how customers interact with banks. Barclays must continually innovate its digital offerings to enhance customer experience and meet the increasing demand for online services.
• Cybersecurity:  With the increase in digital transactions and online banking, the threat of cyber-attacks is more prevalent. Barclays must invest heavily in cybersecurity measures to protect its assets and customer data.
• Blockchain and Cryptocurrencies:  The advent of blockchain technology and cryptocurrencies can potentially revolutionize the banking sector. Barclays can explore blockchain applications in cross-border transactions, fraud prevention, and smart contracts.
• Artificial Intelligence (AI) and Machine Learning:  These technologies can be employed in various banking functions, including customer service (chatbots), fraud detection, credit scoring, and personalized banking recommendations.
• Automated Financial Advisors and Robo-Advisors:  With AI’s aid, automated platforms can provide financial advice, investment strategies, and portfolio management at lower costs.
• Cloud Computing:  Leveraging cloud technology can help Barclays streamline operations, enhance data storage capacities, and improve service delivery efficiency.
• Payment Technologies:  The emergence of new payment technologies, like contactless payments, mobile wallets, and peer-to-peer payment systems, requires Barclays to adapt and integrate these methods.
• RegTech:  Regulatory Technology (RegTech) uses technology to help financial institutions comply with regulations efficiently and at a lower cost. Given the heavily regulated nature of the banking sector, adopting RegTech can benefit Barclays.
• Biometric Verification:  Using biometrics, like fingerprint and facial recognition, adds a layer of security to banking operations and can enhance the user experience in mobile and online banking.
• Infrastructure Modernization:  Continuous updating and modernizing IT infrastructure is crucial to ensure smooth operations, integrate new technologies, and prevent system downtimes.
• Open Banking:  With regulations like PSD2 in Europe, open banking, which allows third-party developers to create applications and services around a financial institution, is on the rise. This can lead to increased competition and innovation in banking services.

Environmental

• Sustainable Banking:  As global attention focuses on sustainability, there’s a growing demand for green banking solutions. Barclays can offer financial products and services that support eco-friendly initiatives, such as green bonds and sustainable investment portfolios.
• Investment in Renewable Energy:  There’s increasing scrutiny on banks’ investment portfolios. Barclays may need to increase its investments in renewable energy projects and decrease financing for fossil fuel ventures to align with global sustainability goals.
• Corporate Social Responsibility (CSR):  Barclays’ CSR initiatives, which address environmental concerns, can significantly enhance its corporate image. Activities could include tree planting, waste reduction campaigns, or community clean-up projects.
• Regulatory Compliance:  With stricter environmental regulations, Barclays must ensure that its operations, investments, and partnerships comply with local and global environmental standards and regulations.
• Green Technology:  The bank can invest in and adopt green technologies. This might include energy-efficient systems, green building certifications for its properties, or supporting green tech startups.
• Eco-friendly Products and Services:  Introducing services like eco-loans for green home improvements or electric vehicle purchases can attract environmentally conscious customers.
• Transition to a Circular Economy:  This involves minimizing waste and maximizing resources. Barclays can play a role by financing businesses that promote circularity or by implementing circular practices in its operations, like recycling and reusing resources.
• Regulatory Compliance:  Banks like Barclays operate under stringent regulatory frameworks set by central banks and other regulatory bodies. These include capital adequacy requirements, liquidity standards, and other operational criteria that banks must meet to ensure financial stability.
• Anti-Money Laundering (AML) & Know Your Customer (KYC) Regulations:  Barclays must adhere to AML and KYC protocols, which mandate comprehensive background checks for customers, monitoring suspicious transactions, and reporting to authorities.
• Consumer Protection Laws:  These laws aim to protect consumers from unfair banking practices, requiring transparency in the provision of financial services, clarity in terms and conditions, and fairness in charging fees and interest rates.
• Data Protection and Privacy:  Barclays must comply with data protection laws such as the General Data Protection Regulation (GDPR) in the EU, which mandates strict protocols for collecting, storing, and sharing personal data.
• Taxation:  Barclays, like all multinational banks, must navigate complex global tax environments, ensuring compliance with tax laws in every jurisdiction they operate.
• Financial Product Regulations:  Various products and services offered by Barclays, from mortgages to insurance, are subject to their regulations. This ensures that customers are treated fairly and fully informed about their purchasing products.
• Post-Brexit Regulations:  With the UK’s exit from the European Union, Barclays, like other UK-based banks, has to navigate the new regulatory landscape, which might necessitate structural changes to serve European clients.
• Digital Banking and Fintech Regulations:  As Barclays continues its digital transformation and engages with more FinTech solutions, it must adhere to regulations specific to digital banking, online transactions, and electronic data handling.

Check out the PESTEL Analysis of Global Businesses

Related posts.

PESTEL Analysis of the construction industry in the UK

PESTEL Analysis of the healthcare industry in the US

PESTEL Analysis of the retail industry in the US

Siemens PESTEL Analysis

Lush Cosmetics PESTEL Analysis

AstraZeneca PESTEL Analysis

Carrefour PESTEL Analysis

Jaguar Land Rover PESTEL Analysis

Type above and press Enter to search. Press Esc to cancel.

Global Automobile Industry: PESTEL Analysis Essay

Porter’s five forces, pestel analysis.

Attributable to the immense size of the automobile industry, its revenue and development are influenced by numerous factors. Aside from the manufacturing of automobiles internationally, this industry is also engaged in the sales and marketing of vehicles. Nowadays, innovation and technology act as the major sources of differentiation for automotive manufacturers (Hashmi & Biesebroeck, 2016). Other major factors of importance in the automobile industry include fuel efficiency and environmental concerns. Porter’s five forces and PESTEL analyses examine the attractiveness and profitability of the global automobile industry, in addition to explaining the sector’s strategic opportunities and threats.

The threat of New Entrants: Weak

It is hard for new companies to venture into the automobile sector attributable to the huge investment needed to set up manufacturing plants, distribution systems, and employ skilled personnel. Another hindrance is the rate of competition from the already existing companies (Hashmi & Biesebroeck, 2016). Except in cases where new companies bring a novel and unique product, the likelihood of acquiring a significant market share is low.

Furthermore, penetrating other markets is difficult because some governments have enforced elevated import taxes as a way of discouraging foreign brands. Attributable to the concerns of safety, dependability, and resilience being fundamental, in addition to buyers basing their impression of a model on the brand’s earlier performance on such issues, new entrants find it exceedingly hard to compete. It might take very many years for new entrants to create a strong reputation to make them achieve a competitive benefit. All such aspects result in the threat of new entrants being very weak.

Bargaining Power of Suppliers: Weak

In the automobile sector, the bargaining power of suppliers is weak because the majority of them are small players. Suppliers have to stick to the regulations set in the industry. The automobile manufacturers hold significant influence since raw materials are always at their disposal (Hashmi & Biesebroeck, 2016). This makes it easy for the brands to switch from a given supplier to another hence making the bargaining power of suppliers significantly low.

Bargaining Power of Buyers: Reasonably Strong

Middle-class customers who purchase a single-vehicle form the biggest proportion of buyers. Nevertheless, some government agencies and corporations purchase fleets of automobiles and are in a better situation of bargaining for lower costs. It is easy for both small and major buyers to switch to a different brand. Private individuals, government agencies, and companies are the major vehicle buyers (Hashmi & Biesebroeck, 2016). Devoid of a few exceptions, buyers can choose to walk out on a purchase they do not like and proceed to a seller of the same brand or a completely different one. Anchored in the overall picture, the bargaining power of buyers is moderately strong. This compels brands to center on enhancing customer loyalty through quality, innovativeness, and competitive prices.

The threat of Substitutes: Weak

There are numerous alternative means of transport encompassing trains, airplanes, and buses. Nevertheless, no substitute can offer the convenience and accessibility that having a vehicle provides. Personal cars serve owners round the clock taking them to preferred destinations but missing a bus, train, or plane compels one to wait (Hashmi & Biesebroeck, 2016). This weakens the threat of substitutes irrespective of the fact that daily commuters find it cheap and easy to use a bus or train, and do not worry about their maintenance.

Competitive Rivalry in the Sector: Extremely Strong

The number of powerful and renowned brands in the automobile industry is low despite the exit obstacles being increasingly high. A company attempting to exit any market must be ready to incur huge losses. The degree of customer loyalty is high and though the sector is broad, it has advanced (Hashmi & Biesebroeck, 2016). Such factors strengthen competitive rivalry in the industry, which makes it very difficult to increase market share.

This makes different companies target diverse market segments but still find aggressive competition. Automobile corporations compete on grounds of design, price, technology, innovativeness, customer safety, and quality to mention a few. Competition in the automobile sector has become a strong force that companies should take seriously. Competitive rivalry in the automobile industry influences the profitability and attractiveness of the sector negatively. The profitability of the automobile industry is low. Governments can offer the essential infrastructural and monetary aid to increase the profitability of automobile companies hence making the industry reach a new height shortly.

Governments across the globe are passing laws to ensure low emissions from vehicles and fixed fuel prices. Moreover, increasing taxes on motor vehicle import is a major threat facing automobile manufacturers. Environment-friendly automobiles have increased in demand internationally because they are obtaining high government support (Guajardo, Cohen, & Netessine, 2015). Varying government regimes and political directives may lead to favorable or hostile fluctuations.

When economic situations worsen, the sales of automobiles decrease significantly. This mainly affects high-priced and luxury vehicles. The economic conditions of a nation, as well as the prevailing financial situations around the world, have a crucial influence on the profitability of the industry (Lungeanu, Stern, & Zajac, 2016). Poor economic conditions result in the decreased buying power of customers. This acts as a major threat to the automobile sector since it is highly reliant on the purchasing power of customers.

Socio-Cultural

The automobile sector is greatly influenced by the varying socio-cultural inclinations and buyers’ preferences. Each year, automobile manufacturers have to make new models based on existing preferences. The outcome is that though a given model will excel in a certain market, it may not be as popular in another (Hashmi & Biesebroeck, 2016). This may pose a threat to the automobile industry as the changing socio-cultural inclinations might lead to older models becoming obsolete.

Technological

Technology and innovativeness offer major opportunities to automobile manufacturers. If a company adopts technology and becomes innovative, it has a great chance of succeeding in the industry and increasing its market share (Lungeanu et al., 2016). To tap this opportunity, many companies are focusing on low emission and environment-friendly automobiles while others are set to release driverless cars.

Ecological/Environmental

Laws associated with environmental friendliness and low carbon emissions are being implemented internationally. This is compelling the automobile manufacturers to abide by the set regulations in an effort of achieving or maintaining competitive benefits (Guajardo et al., 2015). Moreover, only the vehicles satisfying the laid down measures are authorized in some markets such as the United Kingdom.

Laws and regulations strongly influence the performance of automobile manufacturers and dealers. Pollution laws have been tough and companies have to adhere to them by manufacturing environment-friendly vehicles (Hashmi & Biesebroeck, 2016). Other safety laws have led corporations such as Toyota to recall vehicles attributable to defective airbags.

Porter’s five forces and PESTEL analyses assess the attractiveness and success of the automobile industry besides elucidating opportunities and threats. Competition in the automobile sector influences the profitability and appeal of the industry negatively. Governments should offer the necessary infrastructural and fiscal support to increase the profitability of the automobile industry hence making it get to a new height shortly. The relative significance of the political, legal, economical, technological, environmental, and sociocultural factors has risen in the twenty-first century.

Guajardo, J. A., Cohen, M. A., & Netessine, S. (2015). Service competition and product quality in the US automobile industry. Management Science , 62 (7), 1860-1877.

Hashmi, A. R., & Biesebroeck, J. V. (2016). The relationship between market structure and innovation in industry equilibrium: A case study of the global automobile industry. Review of Economics and Statistics , 98 (1), 192-208.

Lungeanu, R., Stern, I., & Zajac, E. J. (2016). When do firms change technology‐sourcing vehicles? The role of poor innovative performance and financial slack. Strategic Management Journal , 37 (5), 855-869.

• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2021, July 8). Global Automobile Industry: PESTEL Analysis. https://ivypanda.com/essays/global-automobile-industry-pestel-analysis/

"Global Automobile Industry: PESTEL Analysis." IvyPanda , 8 July 2021, ivypanda.com/essays/global-automobile-industry-pestel-analysis/.

IvyPanda . (2021) 'Global Automobile Industry: PESTEL Analysis'. 8 July.

IvyPanda . 2021. "Global Automobile Industry: PESTEL Analysis." July 8, 2021. https://ivypanda.com/essays/global-automobile-industry-pestel-analysis/.

1. IvyPanda . "Global Automobile Industry: PESTEL Analysis." July 8, 2021. https://ivypanda.com/essays/global-automobile-industry-pestel-analysis/.

Bibliography

IvyPanda . "Global Automobile Industry: PESTEL Analysis." July 8, 2021. https://ivypanda.com/essays/global-automobile-industry-pestel-analysis/.

• PESTEL Analysis of Fiat Article
• Macro-Environmental Factors of Starbucks: PESTEL Analysis - Analytical Essay
• Arsenal Football Club PESTEL Analysis
• Enterprise Resource Planning in Operations and Supply Chain Management
• Improving Company Performance
• MIT Libraries: Data Management Plan Evaluation
• Lean Manufacturing and Its Implementation
• How Has "Shareholder Value" Altered International Business Practices?