Have you completed a PESTEL Analysis?

A PESTEL analysis or more recently named PESTELE is a framework or tool used by marketers to analyse and monitor the macro-environmental (external marketing environment) factors that have an impact on an organisation. The result of which is used to identify threats and weaknesses which are used in a SWOT analysis.

PESTEL stands for:

• P – Political • E – Economic • S – Social • T – Technological • E – Environmental • L – Legal • E - Ethical (NEW)

Political factors are all about how and to what degree a government intervenes in the economy. This can include – government policy, political stability or instability in overseas markets, foreign trade policy, tax policy, labour law, environmental law, trade restrictions.

Economic factors have a significant impact on how an organisation does business and also how profitable they are. Factors include – economic growth, interest rates, exchange rates, inflation, disposable income of consumers and businesses.

Social factors, also known as socio-cultural factors, are the areas that involve the shared belief and attitudes of the population. These factors include – population growth, age distribution, health consciousness, career attitudes.

Technical factors, we all know how fast the technological landscape changes and how this impacts the way we market our products. Technological factors affect marketing and the management thereof in three distinct ways:

• New ways of producing goods and services • New ways of distributing goods and services • New ways of communicating with target markets

Environmental factors include all those that influence or are determined by the surrounding environment and they are very important in certain industries, such as tourism, farming, agriculture, energy and insurance.

Legal factors include - health and safety, equal opportunities, advertising standards, consumer rights and laws, product labelling and product safety.

The most recent addition to PESTEL is the extra E - making it PESTELE. This stands for ethical and includes ethical principles and moral or ethical problems that can arise in a business. It considers things such as fair trade, slavery acts and child labour, as well as corporate social responsibility (CSR), where a business contributes to local or societal goals such as volunteering or taking part in philanthropic, activist, or charitable activities.