All About PESTEL Analysis - Definition, Key Aspects and More



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The PESTEL analysis has gained popularity from being known as PEST to this new name. Learn about the things that make up this analysis tool through this article. Check additional information about PESTEL analysis.

The success of your organization does not only rely on the factors that you can control. You might have the best employees, the best strategies and the most excellent products but your customers still do not buy your goods. Thus, it is important that you consider the external factors that have an effect on your decisions as the business manager. One way for you to achieve great results upon observing the outside issues is through macro-environment evaluation through PESTEL. This was first known as PEST but it is later changed to PESTEL which now stands for political, economical, social, technological, environmental and legal. All of these are believed to influence the performance of your business but you obviously have no direct control over them. What you need to do is to be able to take advantage of those issues and use them for your business.

So what is this PESTEL analysis? This is most popular in the United Kingdom which in effect is an audit regarding the company's environmental influences. The main purpose is to utilize the information obtained so that people within the organization will be guided when making decisions. The assumption is that when the company is able to evaluate the current environment that it is in as well as the potential changes, it will be more advanced than its competitors with regards to responding towards those changes.

PESTEL analysis is a strategic planning technique which provides companies a useful framework in analyzing the pressures the environment brings to the organization or a particular team. As mentioned, the key aspects include political which pertains to the government policies, economic which includes the interest rates, economic growth and other rates and economic changes, social for the changes in social trends, technological which is about the new technologies used to generate new products, environmental for the weather and climate changes and legal which is all about the legal environment where firms operate in.

Is PESTEL analysis for your organization? PESTEL or PESTLE can be quite useful for companies that not only have business plans but also strategic ones. If you look into the future and are focused on what your company will become after a few years, PESTEL will help you a lot. The main idea of PESTEL analysis is to remind us that we should not give the spotlight on the internal pressures because the environmental ones can actually give more negative effects to our firm.

In order for PESTEL analysis to work for your business, you should ask your group to gather around and everyone should be able to provide the factors that they think have the power to influence the outcome of the business. After every single aspect has been considered and the group has given its suggestions about their effects, you can now ask them to consider the implications of those pressures on their jobs.

PESTEL analysis enables organizations to analyze the meso- and macro-economic settings in which they operate in. when you use PESTEL or PESTLE, you will be able to understand the big picture of the business surrounding that you are in.

If you are interested in PESTEL analysis, check this link to find out more about PESTEL analysis. Also, you can check other articles in BSC Training category.



 

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