BRITEguides give you ways to understand different models and theories. Within this post, we are going to examine a PESTLE analysis.
The PESTLE analysis is a tool which is often used by strategic managers to understand what is going on in the external environment. Where a SWOT or SWOC analysis is looking at what is happening inside an organisation, the PESTLE analysis looks at the outside world.
It is crucial for a manager to observe what is happening in the external environment as there maybe things happening or on the horizon which are going to impact on the business operations. These factors could include an economy going into recession or political instability; the model also measures other areas which include social to technical changes.
Alongside using a PESTLE or PEST analysis (depending on you using the short or full version), on your current external environment, an organisation may also use the model when entering a new market in exporting goods and services to a new country.
PESTLE stands for political, economical, social, technological, legal and environmental; there have been some slightly different versions of the model where environmental has been changed to ethical; however, this tends to stick. The purpose of each section is to allow the manager to think and brainstorm potential impacts (good or bad), which can impact the organisation.
We have included an example PESTLE analysis below to help you understand more about what elements can go into each section.