Introduction to Pestle

Definition of PESTLE Analysis

The PESTLE Analysis is a tool that is used to identify and analyze the key drivers of change in the strategic or business environment. The abbreviation stands for Political, Economic, Social, Technological, Legal, and Environmental factors. The tool allows the assessing of the current environment and potential changes. The idea is, if the project is better placed than its competitors, it would be able to respond to changes more effectively.

The PESTLE Analysis tool can be used for business planning, strategic planning, marketing planning, product development, and organizational planning. The PESTLE tool provides its users with factors that need to be well researched and brainstormed. These factors are better explained in the next section.

The Tool

Political: Every project has both internal politics and external politics. The internal politics like team jealousies, cohesive projects, and personal interests occur in all projects and must be considered and managed by stakeholders. The external politics refer to those which the stakeholders do not control. These events include all political events like employment laws, tax policies, trade restrictions, trade reforms, environmental regulations, political stability, tariffs, etc.

Economic: This factor takes into consideration all events that affect the internal and external economic environment. The internal or micro-economic events relate to the project viability and internal soundness of the project. Financial models and accountanting techniques need to be used during the evaluation phase to ensue the viability. The external or macro-economic events include interstate taxes, embargoes, interest rates, economic growth, recession, inflation rate, exchange rate, minimum wage, wage rates, unemployment, cost of living, working hours, credit availability, financing availability, etc.

Sociological: The sociological factor takes into consideration all events that affect the market and...