pestle swot
PESTLE
A PESTLE analysis is a framework used to evaluate an organisations external macro-environment. 1When used, a business will analyse the multiple factors that are out of their control. By doing this a business can be aware and prepared for future changes.
Political factors take into account the political situation of a country. Regulations put in place by governments will determine how a business has to operate, so a business will have to consider trade and labour laws, tax policies, environmental laws and regulations, trade restrictions, commercial tariffs and infrastructure.2
Economic factors have a major impact on consumer spending, this changes their needs therefore affecting the businesses output. Wage levels, inflation and interest rates are all factors that have then potential to change a business’s costs; however trends can be followed making it easier for the business to plan for the changes ahead.3
A Socio-cultural factor concerns itself with demographic change. People are constantly changing their lifestyle and businesses should be able to recognise this and make appropriate adjustments. For example healthy eating has become a trend in today society, therefore businesses like pubs have started to introduce healthier meals to attract more customers, and increase sales of beer.
Technological factors have a massive impact on organisations. It is important for a business to know what level of technology they need to stay competitive. The release of DVDs is a good example to show how quickly a market can change, as they made the sale of VCRs decrease rapidly.4
Governments create legal framework within which companies operate, in areas such as health and safety, employment, consumer protection and pollution control. If a company doesn’t have this knowledge it puts them at high risk.
Environmental factors relate to the resources available in the economy, climate changes and water resources. Management of organisations have to be able to analyse
A PESTLE analysis is a framework used to evaluate an organisations external macro-environment. 1When used, a business will analyse the multiple factors that are out of their control. By doing this a business can be aware and prepared for future changes.
Political factors take into account the political situation of a country. Regulations put in place by governments will determine how a business has to operate, so a business will have to consider trade and labour laws, tax policies, environmental laws and regulations, trade restrictions, commercial tariffs and infrastructure.2
Economic factors have a major impact on consumer spending, this changes their needs therefore affecting the businesses output. Wage levels, inflation and interest rates are all factors that have then potential to change a business’s costs; however trends can be followed making it easier for the business to plan for the changes ahead.3
A Socio-cultural factor concerns itself with demographic change. People are constantly changing their lifestyle and businesses should be able to recognise this and make appropriate adjustments. For example healthy eating has become a trend in today society, therefore businesses like pubs have started to introduce healthier meals to attract more customers, and increase sales of beer.
Technological factors have a massive impact on organisations. It is important for a business to know what level of technology they need to stay competitive. The release of DVDs is a good example to show how quickly a market can change, as they made the sale of VCRs decrease rapidly.4
Governments create legal framework within which companies operate, in areas such as health and safety, employment, consumer protection and pollution control. If a company doesn’t have this knowledge it puts them at high risk.
Environmental factors relate to the resources available in the economy, climate changes and water resources. Management of organisations have to be able to analyse