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Roś
Natalia Roś,
a journalist from Laba
PESTEL analysis is a tool used to identify external factors affecting an organization . The letters come from six key elements that stand for political, economic, social, technological, environmental, and legal conditions.
When preparing a brand strategy or implementing a new product or service, it is very important to conduct a full analysis of the market situation . A one-time look is not enough. It is worth using regular analyses to monitor changes and identify macro trends. Organizations that respond to them effectively have a chance to stand out from the competition. PESTEL analysis is also very helpful in making many strategic decisions for the company, such as entering a foreign market or creating long-term plans. It can also serve as a basis for creating a SWOT analysis, because it indicates opportunities and threats.
What is PESTEL analysis?
PESTEL analysis is an extension of the PEST (political, economic, social, technological) summary. It was first introduced by Harvard professor Francis J. Aguilera under the name ETPS. In the publication Scanning the Business Environment from 1967 georgia telephone number data the author presented economic, technological, political and social factors as the main elements influencing the business environment. In later years, addressing environmental and legal factors was still crucial. Let's look at all the elements of PESTEL analysis.
Political factors
They determine the extent to which the government and the policies of the party in power can influence an organization or a specific industry . They include elements related to the political situation in the country, geopolitical sentiment, the country's trade, fiscal or tax policy, as well as investments from the state budget, e.g. in infrastructure and transport.
Economic factors
Economic factors have a direct impact on the economy and its performance, which in turn directly impacts the organization and its financial performance. Economic factors include issues such as interest rates, employment or unemployment, raw material costs, inflation, and exchange rates. Each of these can make it impossible to conduct business , for example by significantly increasing costs.
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Social factors
The emphasis here is on the social environment and identifying emerging trends. This helps marketers better understand the needs and desires of consumers in a social context . Factors that are considered in this section include changing demographics, the social situation of the household, education and educational attainment, cultural trends, changes in attitudes and lifestyles.
Technological factors
They consider the pace of innovation and technological developments that may impact a market, industry or product. Factors may include changes in digital or mobile technology, automation or ongoing research. It is also worth paying attention to the development of technologies related to distribution, production and logistics.
Environmental factors
This is everything that is related to the environment around us and the impact of our industry on nature . At this stage, we focus on ecological aspects. With the growing importance of CSR (corporate social responsibility) and sustainable development, organizations must pay attention to these elements. These factors include climate action, recycling procedures, circular economy, carbon footprint, waste disposal methods, but also analysis of climatic conditions, such as temperature in a given region or water levels, which affect, for example, the insurance, tourism or agriculture industries.
Legal factors
The organization must comply with the laws and obligations that have legal force in the territories where the company operates. It is worth monitoring any changes in regulations and analyzing the impact that different business activities may have. Legal factors include labor codes, consumer rights, employment or health and safety regulations, and international regulations and trade law.
