How To Do A Pestle Analysis – An Ultimate Guide

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PESTLE stands for Political, Economic, Social, Technological, Legal, and Environmental. Pestle analysis is a business strategy tool that is used to recognize, categorize, and analyze the vital opportunities and risks a business encounter currently and in the future. It is an audit or assessment of an organization’s environmental impacts that assist in guiding the plan and strategic decision making. This technique is used as a part of the strategic planning or threats management process and gives oversight to the team about their current environment and what needs to be considered in light of these factors. Students must be aware of Pestle analysis if they want to write their Pestle analysis assignment successfully.

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What Is Pestle Analysis?

A pestle analysis assists a team to comprehend a firm’s market and business position to plan strategically and do market research in a new and existing market. It is one of the tools that help an organization to evaluate its business opportunities and risks to improve its stability and productivity in the market.

  • It provides an overview of the necessary external influences on the organization.
  • It encourages strategic thinking and assists you to assess how your strategy fits into the wider environment.
  • It allows leaders to make knowledgeable and firm decisions.

  Pestle Analysis Of A Business


Usually, the government has an immense impact on several industries and businesses. The political sector contains any government or any interest group actions in the form of legislation, taxes, and duties. It is significant to comprehend the political agenda and how it may move for or against certain industries and practices. You need to think about the wider political landscape. What are the facets around global relations or elections that may influence your company? The political areas are:

  • New monetary policy law
  • Corporate tax changes
  • Change of government
  • Trade war
  • Elections and coalitions


This factor is concerned with the areas unique to the economy and directly affects it. Factors that may affect your business plan include interest rates, inflation rates, exchange rates, economic growth, and recession. The important economic factors are:

  • Currency value
  • Inflation
  • Interest rate
  • Taxation
  • Inflation and recession


The social factor issues related to the demographics of your customers include population growth rates, cultural aspects, changing social behaviors. It can be one of the most significant factors to discuss. Many of the factors can influence the way you do business with your clients the techniques of interaction you may have. The important factors of this area are:

  • Health awareness
  • Cultural trends
  • Working trends
  • Aspirations
  • The behavior of different ages


It is concerned with the rate of technological changes, research, and development, automation, activities, and incentives. This factor affects efficiency consideration, quality, and outsourcing decisions. This factor changes most rapidly compared to others. The technological areas are:

  • R&D products
  • Device profiles and usage
  • Battery technology
  • Communication infrastructure
  • Transport


The legal factor widely refers to the laws and regulations that your business needs to comply with. It is not about policy or intent; it is specifically about the legalities of operating your business. The legal areas are:

  • Trademark and patent laws
  • Employment laws
  • Safety standards
  • Privacy and data protection laws
  • Health and safety regulations


The environmental factor has become more important in recent times. It is directly influenced and determined by the surroundings. It includes:

  • Climate and weather
  • Natural disasters
  • Environmental legislations
  • Geographic location and accessibility
  • Supply chain and resource availability

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There are various steps you can take for conducting a pestle analysis. Some of the significant steps are given below, that you must consider:

  • Brainstorm: Get ideas from different people from different areas and functions to brainstorm some innovative ideas. Use the suggestions and questions that come in each section while brainstorming.
  • Consult: You should also take some opinions of experts from outside your business. These can be consultants, suppliers, distributors, academics, customers, or any other experts.
  • Research: Collect evidence and facts for every insight in your PESTLE analysis. It is essential to gather facts and evidence that support your insights as well as the evidence that may contradict them.
  • Evaluate: You need to evaluate each of the sections in your pestle analysis such as likelihood and impact.
  • Refine: You need to fine-tune the articulated and insightful points in each of the factors of the analysis.

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