PESTEL analysis factors
These are the five that we mentioned at the beginning of the article and which give rise to the name that this strategy receives: Political, Economic, Social, Technological, Ecological, Legal.
Politicians : government situation, measures regarding businesses and the economy, international agreements, etc.
Economic : financial health of the country, economic growth of a state, inflation, employment/unemployment, among others.
Social : citizenship, middle age, lifestyle, habits and trends when consuming products/services…
Technological : innovations that help/affect the company's activity (when e-commerce became popular, for example, or now that we are in the era of AI).
Ecological : natural disasters, environmental risks, specific policies relating to this area, etc.
Legal : occupational safety regulations, health regulations, usage licenses, copyright and a host of laws that could affect one or another activity or sector.
Advantages of PESTEL analysis
How does a company benefit from bahrain whatsapp data relying on this formula? What are the advantages of PESTEL analysis that make it so famous in the world of business management?
Anticipate events that may affect the company.
Improve company decision making.
Identify new business opportunities.
Optimize business strategy and medium and long-term plans.
Greater adaptability of the firm to the market.
Now it's time to put it into practice. It is important to note that this tool must be applied by professionals who know it and have experience in carrying it out, since it is essential to know how to do a PESTEL analysis for it to be truly effective.
1st Template in hand and team defined to start work.
2. Determine the PESTEL factors one by one : economic and political aspects that could influence a company's activity, situations related to the public, changes and factors that socioculturally define your target, technological advances that would also affect - positively/negatively - the brand, ecological and environmental changes and realities and the legislation and regulations that exist or will be implemented in the near future.
With all this information on the table, well structured in the PESTEL analysis template –on the Internet you can find free downloadable documents to carry it out–, you have to sit down and study what it contains. That would be the third point…
3. Study the reality of the sector and the situation of the company in that context.
4. Decision making, if necessary. Whether you want to move forward and grow or whether you consider putting certain projects on hold as a result of what might be happening. This information is obtained after preparing the PESTEL analysis .
Examples of PESTEL analysis
The practical part is essential to better understand this concept, which is why we include examples of PESTEL analysis below .
Nike : the sports footwear and clothing manufacturer, when entering another market, must assess the regulations and legislation of the country where it wants to operate, the tastes and purchasing habits of the consumer, economic aspects such as taxes, transport costs... These would be some factors of the PESTEL analysis that they should carry out.
Grupo Bimbo : the food company would have to comply with current regulations and laws related to the agri-food sector, changes in consumers, their tastes when launching marketing and communication messages, the socio-economic situation of the state in which they are going to establish themselves and so on, a long list of aspects that must be taken into account.
It is essential that professionals who are going to develop this strategic tool have a thorough understanding of what PESTEL analysis is and what factors are key. Training programs such as those of EAE Barcelona – both the Master in Entrepreneurship and the Executive MBA – include matrices such as this one in management, strategy and business intelligence subjects.