PESTLE Analysis micro site – History – Introduction – Templates – HR example –Schools & EducationWelcome to our new micro site on the PESTLE analysis.This popular page has now been improved and is split into more easily digestedchunks. Lets us know your comments and feedback. Use the menu above tonavigate through this PESTLE analysis micro site.PESTLE Analysis micro site -Home/ History of Pest analysis – Introduction to the PESTLE analysis – PESTLE analysistemplates – HR example of a PESTLE application – PESTLE analysis in Schools &EducationThis page has been relocated to our new pestle micro site – where it is easier tonavigate and print the elements of interest – please go to – http://rapidbi.com/pestle/This is now old content please follow the navigation at the top of the page forour new contentHistory of the PESTLE analysis (PEST Analysis)Originally designed as a business environmental scan, the PEST or PESTLEanalysis is an analysis of the external macro environment (big picture) in which abusiness operates. These are often factors which are beyond the control or influenceof a business, however are important to be aware of when doing productdevelopment, business or strategy planning.This page has been developed to help and support anyone with activities or projectswhich require use of the PESTLE analysis tool to undertake an environmental scanof an organizations operating environment.Visit the article home page for all of our articles and content
Jump straight to the FREE PESTLE Template (below) PESTLE Analysis on an HR department or other internal function Download PDF versions of these templates History of PEST (LE) NEW page on PESTLE analysis for schools and educationIt is important to take into account PESTLE factors for the following main reasons: Firstly, by making effective use of PESTLE analysis, you ensure that what you are doing is aligned positively with the powerful forces of change that are affecting our working environment. By taking advantage of change, you are much more likely to be successful than if your activities oppose it Secondly, good use of PESTLE analysis helps you avoid taking action that is likely to lead to failure for reasons beyond your control Thirdly, PESTLE is useful when you start a new product or service. Use of PESTLE helps you break free of assumptions, and helps you quickly adapt to the realities of the new environmenttopHistory of PESTSo where did the term PEST or PESTLE derive? What were the origins?The term PESTLE has been used regularly in the last 10+ years and its true historyis difficult to establish.From our research, the earliest know reference to tools and techniques for ‘Scanningthe Business Environment’ appears to be by Francis J. Aguilar (1967) who discusses‘ETPS’ – a mnemonic for the four sectors of his taxonomy of the environment:Economic, Technical, Political, and Social.Shortly after its publication, Arnold Brown for the Institute of Life Insurance (in theUS) reorganized it as ‘STEP’ (Strategic Trend Evaluation Process) as a way toorganise the results of his environmental scanning.Thereafter, this ‘macro external environment analysis’, or ‘environmental scanningfor change’, was modified yet again to become a so-called STEPE analysis (theSocial, Technical, Economic, Political, and Ecological taxonomies).In the 1980s, several other authors including Fahey, Narayanan, Morrison, Renfro,Boucher, Mecca and Porter included variations of the taxonomy classifications in avariety of orders: PEST, PESTLE, STEEPLE etc. Why the slightly negativeconnotations of PEST have proven to be more popular than STEP is not known.There is no implied order or priority in any of the formats.Some purists claim that STEP or PEST still contain headings which are appropriatefor all situations, other claim that the additional breakdown of some factors to helpindividuals and teams undertaking an environmental scan.
Quite who and when added what elements to the mnemonic is a mystery, but whatwe do know is that the actual order and words contained are common to certainparts of the world and streams of academic study. The term PESTLE is particularlypopular on HR and introductory marketing courses in the UK. Others favour PEST,STEP or STEEPLE.topIntroduction to The PESTLE Analysis toolPESTLE analysis is a useful tool for understanding the “big picture” of theenvironment in which you are operating, and the opportunities and threats that liewithin it. By understanding the environment in which you operate (external to yourcompany or department), you can take advantage of the opportunities and minimizethe threats.Specifically the PEST or PESTLE analysis is a useful tool for understanding risksassociated with market growth or decline, and as such the position, potential anddirection for a business or organization.For the purposes of this page we will focus on the PESTLE variation of the acronym.The PESTLE Analysis is often used as a generic ‘orientation’ tool, finding out wherean organization or product is in the context of what is happening out side that will atsome point effect what is happening inside an organization.A PESTLE analysis is a business measurement tool, looking at factors external tothe organization. It is often used within a strategic SWOT analysis (Strengths,Weaknesses, Opportunities and Threats analysis). PESTLE is an acronym for Political, Economic, Social, Technological, Legal and Environmental factors,which are used to assess the market for a business or organizational unit strategic planThe PESTLE analysis headings are a framework for reviewing a situation, and canalso be used to review a strategy or position, direction of a company, a marketingproposition, or idea. There are many variants on this model including PEST analysisand STEEPLE analysis.Completing a PESTLE analysis can be a simple or complex process. It all dependshow thorough you need to be. It is a good subject for workshop sessions, as
undertaking this activity with only one perspective (i.e. only one persons view) canbe time consuming and miss critical factors.Use PESTLE analysis for business and strategic planning, marketing planning,business and product development and research reports.The PESTLE template below includes sample questions or prompts, whose answersare can be inserted into the relevant section of the table.The questions are examples of discussion points, and should be altered dependingon the subject of the analysis, and how you want to use it.Make up your own PESTLE questions and prompts to suit the issue being analyzedand the situation (i.e. the people doing the work and the expectations of them).It is important to clearly identify the subject of a PESTLE analysis (that is a cleargoal or output requirement), because an analysis of this type is multi faceted inrelation to a particular business unit or proposition – if you dilute the focus you willproduce an unclear picture – so be clear about the situation and perspective that youuse PESTLE to analyze.A market is defined by what is addressing it, be it a product, company, organization,brand, business unit, proposition, idea, etc, so be clear about how you define themarket being analyzed, particularly if you use PESTLE analysis in workshops, teamexercises or as a delegated task. The PESTLE subject should be a clear definition ofthe market being addressed, which might be from any of the following standpoints: A company looking at its market A product looking at its market A brand in relation to its market A local business unit or function in a business A strategic option, such as entering a new market or launching a new product A potential acquisition A potential partnership An investment opportunityBe sure to describe the subject for the PESTLE analysis clearly so that peoplecontributing to the analysis, and those seeing the finished PESTLE analysis,properly understand the purpose of the PESTLE assessment and implications.topPESTLE analysis templateOther than the main headings, the questions and issues in the template below areexamples and not exhaustive – add your own and amend these prompts to suit yoursituation, the experience and skill level of whoever is completing the analysis, and
what you aim to produce from the analysis. A word document of this tool is availablein our ResourceZoneThe context upon which a PESTLE analysis is undertaken can help to determinehow to interpret facts and information discovered.PEST/ PESTLE Analysis on ____________________(organization name) SWOTSWOT Context ____________________SWOT Date of Analysis ____________ viewPESTLE Your Potentia Implication and importanceAnalysis notes lfactors Impact:The list below is About H– Time Type:P Impact:In Relativejust to get you your HighM – Fram ositive creasing Importance:Criticastarted. organizati Medium e:0 – +Negati >Unchang lImportantUn-Remember to on.How L– 6 ve ed importantUnknowput these, and might the LowU – mont -Unkno =Decreasi nothers that you factors Undeter hs6 – wn ngadd in the listed on mined 12 <Unknowcontext of your the left mont norganization or impact hs12business.For your – 24example if you business montare a small or part of hs24private company the +the behaviours organizati montof a Wall Mart / on? hsTesco or otherlargeinternationalplayer may wellimpact on you.Ifyou are a localauthority,governmentchanges willchange yourpriorities. In theNHS changes totreatments andpublic attitudeswill also impactetc.Political-SWOT Trading
policies Funding, grants and initiatives Home market lobbying/pre ssure groups Internatio nal pressure groups Wars and conflict Governm ent policies Governm ent term and change Elections Inter- country relationship s/attitudes Terrorism Political trends Governm ental leadership Governm ent structures Internal political issues Sharehol der/ stakeholder needs/ demands _______ _________ ___ _______ _________ ___ _______
_________ ___ _______ _________ ___ _______ _________ ___Economic-SWOT Home economy situation Home economy trends Overseas economies and trends General taxation issues Taxation changes specific to product/ser vices Seasonal ity/weather issues Market and trade cycles Specific industry factors Market routes and distribution trends Customer /end-user drivers Internatio nal trade/monet ary issues Disposab
le income Job growth/une mployment Exchang e rates Tariffs Inflation Interest and exchange rates Consume r confidence index Import/ex port ratios Productio n level Internal finance Internal cash flow _______ _________ ___ _______ _________ ___ _______ _________ ___ _______ _________ ___ _______ _________ ___Social- SWOT Consume r attitudes and opinions Media views Law changes affecting
social factors Brand, company, technology image Consumer buying patterns Major events and influences Buying access and trends Ethnic/rel igious factors Advertisi ng and publicity Ethical issues Demogra phics (age, gender, race, family size,) Lifestyle changes Populatio n shifts Educatio n Trends Fads Diversity Immigrati on/emigrati on Health Living standards Housing trends Fashion & role models Attitudes
to work Attitudes to people doing certain types of work Leisure activities Occupati ons Earning capacity Staff attitudes Managem ent style organizati onal culture Changes to education system _______ _________ ___ _______ _________ ___ _______ _________ ___ _______ _________ ___ _______ _________ ___Technological-SWOT Competin g technology developmen t Research funding Associate d/dependen
t technologie s Replace ment technology/ solutions Maturity of technology Manufact uring maturity and capacity Informati on and communicat ions Consume r buying mechanism s/technolog y Technolo gy legislation Innovatio n potential Technolo gy access, licensing, patents Intellectu al property issues Global communicat ions Invention s Innovation s New discoveries Research Energy uses/source s/fuels
Additional split of information if doing a PESTLE analysis rather than a PEST analysis:Legal- SWOT Current legislation home market Future legislation European /internation al legislation Regulator y bodies and processes Environm ental regulations Employm ent law Consume r protection Industry- specific regulations competiti ve regulations _______ _________ ___ _______ _________ ___ _______ _________ ___ _______ _________ ___ _______ _________ ___Environmental-SWOT Ecologica l
Environm ental issues Int ernatio nal Na tional Lo cal Environm ental regulations Customer values Market values Stakehol der/ investor values Staff attitudes Managem ent style organizati onal culture Staff morale Staff engagement Global factors EU based factors _______ _________ ___ _______ _________ ___ _______ _________ ___ _______ _________ ___ _______ _________
___topRemember this is only a tool. Call it what you like – use whatever factors you feel areappropriate. Other variations include: PEST analysis (STEP analysis) - Political, Economic, Sociological, Technological PESTLE/ PESTEL analysis- Political, Economic, Sociological, Technological, Legal, Environmental; PESTEL analysis PESTEL analysis- Political, Economic, Sociological, Technological, Environmental, Labour (Labor) related; PESTEL analysis (rare no references available) PESTLIED analysis- Political, Economic, Social, Technological, Legal, International, Environmental, Demographic STEEPLE analysis – Social/Demographic, Technological, Economic, Environmental, Political, Legal, Ethical SLEPT analysis – Social, Legal, Economic, Political, Technological STEPE analysis – Social, Technical, Economic, Political, and Ecological ETPS analysis – Economic, Technical, Political and Social – Scanning the business environmentChoose the acronym that most suits you or your organization.topNext Step in a PESTLE analysisWhen you have identified the factors that may impact your organization, in column 2list HOW they would impact on your organization. When this is complete, in column 3indicate the extent to which each factor is a risk.As a rule of thumb, for every HIGH risk you identify you should have at least 10MEDIUM and 20 LOW risk item. If you identify more high risks than low risks it maybe worth re-visiting your thoughts on what may or may not impact your organization.Then look at the relative importance and implication of each factor.When you have done this you are ready to start to populate a SWOT analysis (seebelow).topAction PlanningWhen you have collated the relevant data you need to develop an action plan withSMART objectives (Specific measurable achievable relevant time-bound orSMARTER objectives)
topPESTLE Analysis on an HR department orother internal functionWhile the PEST or PESTLE analysis is primarily aimed at looking at the externalenvironment of an organization, many HR courses ask students to use the PEST orPESTLE analysis model to look at their own function. In this context we need toimagine that the department (HR) is an organization in its own right and look outside.Factors to include in your analysis may include the following: Political What is the culture of the organization, How is the HR function viewed by other functions? Who are the political champions of HR (or its adversaries)? Shareholder views Economic What is the budgetary position of the department, Is more money available? Are our customers likely to spend more or less money on the services we offer? What is happening to the financial status of the organization Interest rates Inflation Salary trends in the sector Sociological Other departmental attitudes to HR Population shifts (age profile) Education Fads Diversity Immigration/emigration Health Living standards Housing trends Fashion & role models Age profile Attitudes to career Technological What changes may be coming our way? What new technology/ systems, How do we record attendance, performance? how might this change? Use of and encourage home working? Communications technologies changes of technology that will increase/ reduce the need for recruitment changes to HR software Legal What is happening in our sector that will impact what we do?
Minimum wage, Working time, Food stuffs, Under 18 working, Occupational/ industrial Training etc. What changes will impact the services of the organization Environmental Staff morale Staff engagement Need to reduce storage needs Management attitudes (inside dept/ function) Organizational culturetopThis is only a sample of the types of issues you may include. Use the topics listed inthe template above to give you ideas and inspire you, just relate them to the rest ofyour organization and your ‘customers’.NEW page on PESTLE analysis for schools andeducationOn to SWOT analysisTo take the PESTLE analysis forward you can integrate the results into your SWOT.The outputs from the BIR/ SWOT will provide you with your internal strengths andweaknesses.Have a look at the HIGH impacts from the PESTLE. Some will be positive in nature,others will be negative. List these on your SWOT analysis under OPPORTUNITIESand THREATS.The PESTLE model is a useful environmental scan as part of a diagnostic process.The PESTLE analysis tool can be used in association with the BusinessImprovement Review (BIR) – a highly structured and holistic SWOT tool. ThePESTLE models can help to identify the context in which a business operates andprovide a context for change. A PESTLE analysis can provide a valuable agendaupon which to use a Business Improvement Review (BIR) to help identify thestrengths and weaknesses (SWOT) of an organization, as apart of an organizationalchange process. Click here for more information. Need to write SMART objectives?Need to use Management ModelsHave you found this page of value? Need more details/ ideas? Your feedback iswelcomed.Based upon information from many sources. No copyright over the model oracronyms are assumed. This page is provided for educational purposes only.
RapidBI Ltd cannot accept any responsibility for the actions taken using this or any of the tools provided on this site. Please note this page is updated on a regular basis. The more feedback we get the more we will develop this and similar pages for people studying CIPD and other HR and management programmes. CTP, CPP etc A PESTLE analysis is a simple but effective tool that is often overlooked in practical business planning activities. top Related Training/ leadership/ Change posts: 1. PESTLE analysis templates 2. Introduction-to-the-PESTLE-analysis-tool 3. schools-education-and-the-PESTLE-analysis-tool Filed Under: Created Articles, SWOT Analysis Tagged With: analysis, History, PEST, PESTLE, PESTLE analysis, Templates About support support team at rapidbi Comments1. theLBSS says: March 25, 2011 at 01:00 Featured article from @rapidbi blog- http://rapidbi.com/the-PESTLE-analysis-tool/ Log in to Reply2. anwar hossain says: October 15, 2011 at 17:44 Thanks for Topics Analysis Log in to Reply3. Silvia_HF says: October 22, 2011 at 22:03 JUST mark for class task~The PESTLE analysis tool http://t.co/6acFFuPY via @rapidbi Log in to Reply4. iveta says: March 21, 2012 at 09:26
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Trackbacks1. Mike Morrison says: February 5, 2011 at 13:39 Blog post – PEST/ PESTLE Analysis Tool – History & Templates Log in to Reply2. Deita Rolano says: February 5, 2011 at 13:44 RT @RapidBI: Blog post – PEST/ PESTLE Analysis Tool – History & Templates Log in to Reply3. theLBSS says: February 23, 2011 at 01:00 Random article from @rapidbi blog- http://rapidbi.com/the-PESTLE-analysis-tool/ Log in to Reply4. PESTLE Analysis of a firm says: January 6, 2012 at 05:09 [...] PEST Analysis of a business [...] Log in to Reply5. PEST Analysis of a company | Quality Services Alaska says: January 6, 2012 at 05:09 [...] PEST Analysis of a business [...] Log in to Reply6. PEST Analysis of an enterprise | manifestwitness.com says: January 6, 2012 at 05:11 [...] PEST Analysis of a business [...] Log in to Reply7. Strategic Business Analysis is Messy Business | Ubiquitous Wisdom says: January 26, 2012 at 02:51 [...] PESTLE [...] Log in to Reply Speak Your Mind You must be logged in to post a comment. Shopping Cart