PESTEL analysis
( Framework for analysing sources of opportunities and threats )
• Political
• Economic
• Social
• Technological
• Environmental
• Legal
Organization can use PESTEL analysis as a framework for analysing the general business environment (Macro - environmental), and the opportunities and threats present in the environment.
Political : Government decision and policies such as changes in competition policies and consumer policies
Economic : Impact of the economic cycle (Recession or economic growth), inflation , interest rate , tax rate, foreign exchange rates,
Social : Demographics, changes in tastes or culture (Demographic changes can affect workforces as well as consumers)
Technological : Changes in technology that affect ways of working, or the types of products and services demanded.
Environmental or Ecological : Green issues such as pollution, climate change, environmental regulation, consumer attitudes to products (environmentally friendly, sustainable etc.)
Legal : Laws and regulation, including any changes to them (eg. employment law, health and safety , data protection)
(Reference : ACCA text book)