This document contains an explication of the PESTEL framework and shows how it is applied.

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PESTEL FRAMEWORK

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For every PESTEL dimension, we typically use a weighted
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average of indicators per dimension
Overview of used indicators per PESTEL dimension
POLITICAL ECONOMIC SOCIAL TECHNOLOGICAL ENVIRONMENTAL LEGAL
> Corruption index > Market size (GDP) (IMF) > Population (IMF) > Patents index > Environmental > Ease of doing
(Transparancy > Market growth (2010- > Projected (Economist performance business
International) 2015) (IMF) population Intelligence) index (Yale index (World
> Political growth (2010- > Direct innovations University) Bank)
> Economic wealth (GDP
instability index per capita) (IMF) 2015) (IMF) input index
(Economist > Rate of (Economist
> Growth of economic
Intelligence) urbanization Intelligence)
wealth (2010-2015) (IMF)
> Quality of (CIA Factbook) > Innovations
> Government spending
institutions index index(World
(CIA Factbook)
(World Economic Forum)
Economic > Quality of infrastructure
> Technological
Forum) index (World Economic
readiness index
Forum)
(World Economic
> Projected Unemployment Forum)
rate (2010-2015) (CIA
Factbook)
© Roland Berger Strategy Consultants 2012. This document contains educational material
to support a case study for students and does not refer to any existing company. A case study for by

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Thoseto edit Master title style by international institutions on
Click indicators are published
yearly basis and are therefore comparable inter-country
Definition of indicators used
> The corruption Index (Transparency International) is based on surveys answering questions related to bribery of public officials, kickbacks in
public procurement, embezzlement of public funds, and questions that probe the strength and effectiveness of public sector anti-corruption efforts
> The political instability index (Economist Intelligence) rates the economic distress and its vulnerability to social unrest
> The quality of institutions index (World Economic Forum) rates property rights, ethics, government efficiency, security, judicial independence,
etc.
> The infrastructure index (World Economic Forum) rates the quality of overall infrastructure (roads, railroad, port, air) and the energy
infrastructure
> The patents index (Economist Intelligence) indicates for each country the number of patents per million inhabitants
> The direct innovations input index (Economist Intelligence) rates the R&D spending as % of GDP, education, research infrastructure, technical
skils of workforce, quality of ICT, broadband penetration, etc.
> The innovations index (World Economic Forum) rates the quality of research, average company spending on R&D, university-industry
collaboration, government procurement of advanced technology, availibility of engineers & scientists, intellectual property protection, etc.
> The technological readiness index (World Economic Forum) rates the availibility of the latest technologies, FDI & technology transfer, firm-level
technology absorption, Internet users, mobile users, etc.
> The environmental performance index (Yale University) quantifies climate change, agriculture, forestry, water, air pollution, effect on humans,
environmental burden of disease, etc.
> The ease of doing business index (World Bank) quantifies the cost, the time and the procedural burden of starting a business, closing a
business, acquiring property, paying taxes, cross-border trading, obtaining credit, etc.
© Roland Berger Strategy Consultants 2012. This document contains educational material
to support a case study for students and does not refer to any existing company. A case study for by

4. After weighing the different indicators and dimensions, we
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obtain a scoring per dimension per country (1/2)
Weighted scoring of countries per PESTEL dimension (1/2)
Political Economic Social Technological Environmental Legal
WEIGHT 15% 25% 20% 15% 10% 15%
Argentina 3 3 3 5 4 2
Bangladesh 2 3 3 1 1 1
Brazil 3 4 4 5 4 2
Chile 3 3 2 2 3 2
China 4 5 5 4 2 4
Colombia 2 2 2 2 3 4
Hong Kong 3 3 2 3 3 4
India 4 5 5 2 2 2
Indonesia 4 4 4 3 2 2
Iran 0 2 2 2 2 1
Iraq 0 2 2 2 2 1
Japan 4 3 3 4 4 4
Kazakhstan 1 2 2 2 2 2
Note: Only countries that pass the threshold of GDP and GDP growth are included
© Roland Berger Strategy Consultants 2012. This document contains educational material
to support a case study for students and does not refer to any existing company. A case study for by

5. After weighing the different indicators and dimensions, we
Click to edit Master title style
obtain a scoring per dimension per country (2/2)
Weighted scoring of countries per PESTEL dimension (2/2)
Political Economic Social Technological Environmental Legal
WEIGHT 15% 25% 20% 15% 10% 15%
Kuweit 3 2 2 2 3 3
Malaysia 3 4 3 4 5 5
Mexico 3 3 3 3 3 5
Pakistan 0 3 3 2 2 1
Peru 3 2 2 2 3 5
Philippines 3 3 3 1 1 1
Qatar 3 3 2 3 1 4
Singapore 4 2 2 3 3 4
South Korea 2 3 3 4 2 5
Thailand 3 2 1 3 2 3
UAE 4 3 2 4 3 3
Vietnam 4 4 2 2 2 3
Note: Only countries that pass the threshold of GDP and GDP growth are included
© Roland Berger Strategy Consultants 2012. This document contains educational material
to support a case study for students and does not refer to any existing company. A case study for by

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It's character
that creates
impact!