Pestle

PESTLE ANALYSIS

A PESTLE is an analysis to identify the major external factors for change that wield influence on business. These factors are: Political, Economic, Sociocultural, Technological, Legal and Environmental.

Political Factors

Political factors are changes in governments and their business related policies. Political factors impact organizations and how they do business. It is necessary for organizations to have the ability to answer to present and upcoming legislation and amend marketing policies accordingly. Political factors include: labor law, tax policy, stability/instability in foreign market politics, government policy, trade restrictions, environmental law, etc. For example; a government may enforce a new tax where total revenue producing structures of organizations may change. Another example would be that a country may appear to welcome foreign investment but the problem of bureaucracy is it too substantial to make it profitable.

Economic Factors

Economic Factors are the effects of domestic and global changes in the economic environment in which a business functions. They have a substantial effect on the way an organization conducts business and on the profitability of the business. Economic factors can be broken down into micro-economic factors which relate to the way people spend their income and macro-economic factors that have to do with the management of demand in any economy. Economic Factors include: disposable income (consumers and businesses), interest rates, economic growth, inflation, exchange rates, etc. For example; an adverse effect on pricing and purchasing power of customers due to rising inflation in an economy.

Sociocultural Factors

Sociocultural factors are the areas that involve shared attitudes and beliefs of the population. Sociological and cultural changes in society have a major impact on business. They influence how marketers understand consumers’ wants and needs and what motivates them to spend money....