Strategic Management and Pestle Analysis

Topics: Strategic management, SWOT analysis, Management Pages: 2 (371 words) Published: February 8, 2011
What is PESTLE analysis?

A PESTLE analysis considers the Political, Economic, Sociological, Technological, Legal, and Environmental factors affecting a company. A PESTLE analysis for Tesco, and similar companies, would need to consider all of these factors in some detail. Other analysis techniques

A PESTLE analysis for Tesco, and other large corporations, is usefully complemented by using other analysis techniques, like SWOT analysis, or Porter's Five Forces analysis.

A PESTLE Analysis for Tesco

A PESTLE analysis for Tesco must consider all the important external factors impacting on the company. These factors may have political, economic, sociological, technological, legal or environmental dimensions.

The political analysis must include the impact of local and national government, and the international situation. The Economic analysis needs to investigate the influences of the stock market and tax increases, amongst many other monetary matters.

Sociological factors are difficult to determine, as they are part of our background culture. This is part of the reason why using systematic analysis techniques is important.

Technological factors are usually easier to spot, because new technologies involve change, and change is always noticed. For instance, online shopping has had a major impact on Tesco's recent success. The change created by technological advances often lead to legal problems, which is why legal analysis is always an important part of a PESTLE analysis.

Tesco's operations obviously have a significant environmental impact, from fossil fuel use to packaging issues. Reducing the demand on the planet is a challenge for any big company.

A PESTLE Analysis for Tesco must look at all the six factors we have mentioned. Here they are again, with some more examples:

political: an increase in unemployment due to a downward turn in the world economy. economic: impact on sales of the credit crunch.
sociological: an increase in...
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