• Category
  • >Business Analytics

What is PESTLE Analysis? Everything you need to know about it

  • Ritesh Pathak
  • Dec 06, 2020
  • Updated on: Nov 21, 2023
What is PESTLE Analysis? Everything you need to know about it title banner

In today’s world, we have so many examples of successful organizations before us. From small startups to bigger firms, every organization is focused on improving and heading ahead. Different tools are leveraged by them for this purpose. The competition has become so fierce in the market that every single decision can change the whole dynamics- either negatively or positively.

 

It becomes necessary for organizations to keep a check on each decision making which in turn aids them in sustaining through the blows of market fluctuations. 

 

Since we are living in a ‘global village’, everything happening around us leaves an impact on us. The same goes for an organization. Generally, in marketing theory, we separate a micro and macroeconomic business environment, with the micro environment primarily being the internal factors affecting a specific industry, that includes the stakeholders and competitors of a particular firm and the macro environment being the external factors influencing a firm, factors which it cannot control. 
 

 

It is not only internal matters that decide a company’s fate, but many external factors also make an equal impact. The political situation in a country, technological developments, environmental factors, the legality of actions, economics, social factors, all play an important role. Organizations are well-aware of this fact, so they leverage an economic tool- PESTLE analysis. 

 

 

In this blog, we will discuss this same tool. We will discuss everything about PESTLE analysis. What does it mean? What are those different factors? How to do a PESTLE analysis? What are its advantages and disadvantages? What is it used for? 

 

 

Read our blog 8 Most Popular Business Analysis Techniques used by Business Analyst

 

 

What is PESTLE Analysis?

 

PESTLE analysis sometimes referred to as PEST analysis, is a concept in marketing principles. This concept is used as a tool by organizations to keep a track of the external factors impacting the organization. PESTLE is a mnemonic which in its expanded form denotes P for Political, E for Economic, S for Social, T for Technological, L for Legal, and E for Environmental. On the basis of the organization, it can be reduced to PEST or additional areas can be added (such as Ethical).

 

PESTLE analysis forms a much more comprehensive version of the SWOT analysis. This form of analysis is then compared with the company’s internal strengths and weaknesses via a SWOT analysis. This aids in determining the future scope of action and in developing measures for strategic management.

 

 

Why is PESTLE analysis used? 

 

Businessmen and entrepreneurs often turn towards business analysis tools for aiding them in making suitable decisions for their firm. Before any business venture, the business owners often remain doubtful regarding its outcome and how it would be received.  Pestle analysis is adopted for determining an answer to these questions.  This analysis involves asking questions that give the analyst an idea about the things to keep in mind. These questions are: 

 

  • What is the political situation of a country and what is its effect on the markets?

  • What are the prevalent economic factors? 

  • How is culture affecting the markets and what are its determinants?

  • What are the technological inventions that are trending and what are other future possibilities in this field?

  • What are the current legislations that regulate the industry and if they need to be changed?

  • What are the environmental concerns for the industry? 

 

Analysts find answers to these questions and try to cover all the aspects through this analysis. The PESTLE analysis is more than just understanding the market. This framework represents one of the backbones of strategic management by not only defining what a company should do but also accounting for an organization’s goals and the strategies strung to them.

 

 

Factors of PESTLE Analysis

 

Each of the factors mentioned above, from Political, Economic, Social, Technological, Legal to Environmental, have an impact on an organization. Yet the significance of each of these factors may differ based on the different kinds of industries.

 

 

1. Political factors in PESTLE Analysis

 

Political factors include tax policy, environmental regulations, trade restrictions and reform, tariffs, and also political stability. These factors determine the extent to which a government may influence an industry or a company. For example, the government may bring new tax reforms that might change the whole revenue-generating system of a company.

 

Some tariff trade barriers that can prove to be a hindrance in the way we run our business operations include customs policy and export subsidies. Non-tariff trade barriers meanwhile include determining minimum import prices as well as bans and restrictions on exports.

 

 

2. Economic factors in PESTLE Analysis 

 

Economic factors include economic growth/decline, interest, exchange, inflation and wage rates, minimum wage, working hours, unemployment (local and national), credit availability, and cost of living. These factors are determinants to an economy’s performance that directly impacts a company and also have resonating long term effects.

 

For example, a rise in the inflation rate of any economy would affect the way companies price their products and services. Besides, it would also affect the purchasing power of a consumer and may result in a change in demand/supply models for that economy.

 

You can also take a look at our blog on 4 Ps of Marketing.

 

 

3. Social factors in PESTLE Analysis

 

Social factors include cultural norms and expectations, health consciousness, population growth rates, age distribution, career attitudes, health, and safety. These factors are helpful for companies to better plan their marketing analytics and strategy. For example, the Indian market generally witnesses a surge in demands for vehicles during the last months of the year, due to marriage and the festive season. 

 

These factors are particularly significant for marketers as they target certain customers. Additionally, they also highlight the local workforce and its zeal to operate under certain circumstances.


From Political factors, economic factors, social factors, technological factors, legal factors to environmental factors, the PESTLE analysis comprises each of these factors.

The factors of PESTLE Analysis


4. Technological factors in PESTLE Analysis

 

Technological factors mean the innovations and developments in technologies. These factors impact an organization’s operations. Several new developments like Artificial Intelligence, IoT, Machine Learning, Deep Learning, are being made in the technology field and if a company fails to match up the trend it may lose its position in the market.  

 

A few of the technological factors which are included in the PESTLE analysis include the rate of technological change, the evolution of infrastructure, and any government or institutional research. 

 

 

5. Legal factors in PESTLE Analysis

 

Legal factors include changes to legislation impacting employment, access to materials, quotas, resources, imports/exports, and taxation. These factors have both external and internal sides. Certain laws have an impact on the business environment in a country.

 

Apart from these laws/rules, companies maintain their own set of rules and regulations by which an employee is expected to abide by. So, the legal analysis takes accounts of both these angles and forms strategies keeping them in mind.

 

Recommended blog - AI in the law industry.

 

6. Environmental factors in PESTLE Analysis

 

These factors are mainly concerned with the effect of the surrounding environment and the influence of ecological aspects. These include waste disposal laws, environmental protection laws, energy consumption regulation.

 

This aspect of the PESTLE is crucial for certain industries particularly example tourism, farming, agriculture, etc. However, Global warming and the increased need to switch to sustainable resources; ethical sourcing (both locally and nationally, including supply chain intelligence) have compelled every organization to consider the environmental factors. Corporate Social Responsibility (CSR) has been made compulsory for organizations. 

 

Also Read: Dark side of Information Technology (IT) industry

 

How to do a PESTLE Analysis

 

Conducting a PESTLE Analysis involves some steps which we have mentioned below:

 

  • Identify the scope of the research. It should cover the present and the future scenarios. It should apply to the areas of the business world where the particular organization operates. 

  • Form a good team and assign responsibilities accordingly. Involving diverse people helps in collecting content-rich data. 

  • Identify appropriate sources of information. These may include people seeking professional help regarding an issue or a change/update in current policy. 

  • Gather and assemble the information. Better create a template as the basis for recording the information. 

  • Analyzing the collected information is a significant step. 

  • Create an order of the issues to be addressed. Try to resolve the issue, that can create a big impact, at the earliest.

  • Identify the business-specific options to address the issues.

  • Create a well-informing document for all the stakeholders

  • Disseminate and discuss the findings with stakeholders and decision-makers

  • Decide on the actions to be taken and trends that need to be monitored on an ongoing basis

 

To be effective, organizations must perform PESTLE analysis on an ongoing or regular basis. Organizations that do so enjoy a competitive advantage as they spot trends before others. 
 

What is a PESTLE Analysis used for?

 

A PESTLE analysis is often used as a broad fact-finding activity. It helps an organization establish the external factors that could impact decisions made inside the organization. By understanding the impact these external factors can have on an organization, it becomes handy for organizations to plan better. They can form strategies to minimize the threats and maximize opportunities for themselves. 


 

This image shows the uses of PESTLE Analysis.

Uses of PESTLE Analysis


 

A PESTLE analysis is an appropriate framework that fulfills these purposes. Apart from that, it also helps organizations in a range of business planning situations. These include:

 

1. Strategic business planning

 

A PESTLE analysis report is a useful document to have by your side when starting a business planning process. It provides the senior management team with loads of contextual information about the company like the direction in which the business is heading, brand positioning, growth targets, and the areas of concern that may lead to a decline in growth and productivity.

 

 

2. Workforce Planning

 

Workforce planning is a business process that aligns business and people strategies. A PESTLE analysis helps businesses to identify disruptive changes to business models that may have a profound impact on the future employment landscape. Organizations are facing huge changes in their workforce from increased skills gaps, the creation of job roles that did not exist 10 years ago like the IT department, and job reductions or displacement. 

 

 

3. Marketing Planning

 

As PESTLE analysis brings a lot of information on external factors, it also brings crucial market insights. So, it can help prioritize business activities to accomplish specific marketing objectives within a set timeframe. 

 

Also Read | Marketing Analytics tools

 

4. Product development

 

As mentioned above, a PESTLE analysis also has crucial market insights that tell about the response from customers about a product or service. This helps businesses to decide on whether to enter or leave a route, modify an existing product, and when and what to launch as a new product. 

 

 

5. Organizational Change

 

A PESTLE analysis is a powerful tool for understanding the context for change, and focusing on the areas to make that change successful. In this situation, PESTLE analysis works best with a SWOT analysis. This helps an organization to identify the potential opportunities and threats around labor changes, for example, skill shortage and workforce capabilities. 

 

 

Advantages and Disadvantages of a PESTLE Analysis

 

Everything has both aspects and so does a PESTLE Analysis. Let us look at the advantages as well as the disadvantages of it. 

 

Advantages

 

  • It is a simple framework- easy to understand and conduct

  • It facilitates a better and broader understanding of the business environment.

  • It encourages organizations to develop external and strategic thinking

  • The most talked advantage- it enables an organization to anticipate future business threats and allows it to minimize or nullify the impact

  • It also allows organizations to spot an opportunity and to capitalize on them

 

Disadvantages

 

  • Some PESTLE analysis users oversimplify the amount of data used for decisions – it’s easy to use insufficient data.

  • It’s easy to get lost in the enormous amount of data. So, there always remains a risk of capturing too much data and undertaking too much data analytics that may lead to ‘paralysis by analysis’

  • As a PESTLE analysis works on assumptions, there remains a risk of being wrong

  • Once in a while an attitude doesn’t work with PESTLE analysis. So, it must be a regular practice.

  • The pace of change makes it difficult to anticipate the developments and this may affect the organization in future

 

 

Conclusion

 

It can be stated that PESTLE analysis is a great tool for businesses that can be leveraged for several purposes. It brings information about the possible impact of the six external factors on an organization. This makes it easier for organizations to prepare for any sort of problems caused by these PESTLE factors.

Latest Comments

  • rubmonica805c3eb60f66b8a407f

    Aug 07, 2025

    HIRE THE BEST CRYPTO // BITCOIN RECOVERY EXPERT // THE HACK ANGELS I Can't Access My USDT? Account, Bitcoin Recovery Getting Back Lost Or Stolen Funds? How Do I Recover Crypto From A Scammer? If you’re in need of a reliable crypto asset and fund recovery service. Reach out to THE HACK ANGELS RECOVERY EXPERT WhatsApp +1(520)2 0 0-2 3 2 0) Email at support@thehackangels.com Website at www.thehackangels.com I can't get over how excited I am to have discovered THE HACK ANGELS RECOVERY EXPERT through a friend. After falling prey to a cryptocurrency fraud. However, Thanks to THE HACK ANGELS RECOVERY EXPERT I was able to regain a portion of my hard-earned funds. If you're feeling overwhelmed and frustrated by the loss of your hard-earned money, fear not! Contact THE HACK ANGELS RECOVERY EXPERT today and let him work his magic in recovering what is rightfully yours. As a professional in the field of online security and data recovery, I must say this, the most reliable and dependable recovery agent available online is THE HACK ANGELS RECOVERY EXPERT. With years of experience and a proven track record of successful recoveries. I can't express how grateful I am for their outstanding assistance on my case.

  • Patricia Lovick

    Aug 07, 2025

    How To Recover Your Bitcoin Without Falling Victim To Scams: A  Testimony Experience With Capital Crypto Recover Services, Contact Telegram: @Capitalcryptorecover Dear Everyone, I would like to take a moment to share my positive experience with Capital Crypto Recover Services. Initially, I was unsure if it would be possible to recover my stolen bitcoins. However, with their expertise and professionalism, I was able to fully recover my funds. Unfortunately, many individuals fall victim to scams in the cryptocurrency space, especially those involving fraudulent investment platforms. However, I advise caution, as not all recovery services are legitimate. I personally lost $273,000 worth of Bitcoin from my Binance account due to a deceptive platform. If you have suffered a similar loss, you may be considering crypto recovery, The Capital Crypto Recover is the most knowledgeable and effective Capital Crypto Recovery Services assisted me in recovering my stolen funds within 24 hours, after getting access to my wallet. Their service was not only prompt but also highly professional and effective, and many recovery services may not be trustworthy. Therefore, I highly recommend Capital Crypto Recover to you. i do always research and see reviews about their service, For assistance finding your misplaced cryptocurrency, get in touch with them, They do their jobs quickly and excellently, Stay safe and vigilant in the crypto world. You can reach them via email at Capitalcryptorecover@zohomail.com OR Call/Text Number +1 (336)390-6684

  • morrisjanson827f2836cca9f4022

    Aug 12, 2025

    HIRE A REPUTABLE RECOVERY FIRM THAT HELPED ME RETRIEVE MY LOST INVESTMENT FUNDS : THE HACK ANGELS If you’re lost your Bitcoin to scammers, and you’re searching for trustworthy recovery services, getting in touch with THE HACK ANGELS is the only way to get your Bitcoin back. After losing my Bitcoin investments. I was determined to find a solution. I began by researching online and found several recovery services claiming to retrieve lost Bitcoin. However, most of these services turned out to be scams themselves. I thought I’d never see my funds again. It was then that I came across THE HACK ANGELS. A reputable Bitcoin recovery expert with a proven track record of retrieving lost Funds. I reached out to him, and he responded promptly, explaining the process of recovering my lost Bitcoin. They provide essential guidance on protecting digital assets, recognizing cyber threats and using effective security practices to prevent future incidents. Great communication and a successful outcome, when it comes to bitcoins recovery, quick contact THE HACK ANGELS RECOVERY EXPERT WhatsApp +1(520)2 0 0-2 3 2 0 Email at support@thehackangels.com Website at www.thehackangels.com If you're in London, you can even visit them in person at their office located at 45-46 Red Lion Street, London WC1R 4PF, UK. Don’t hesitate to reach out if you need help! And ready to reclaim what's rightfully yours?

    edinabritonfdea873cbdf34f9a

    Aug 20, 2025

    HIRE A  LEGITIMATE CRYPTO RECOVERY EXPERT // VISIT THE HACK ANGEL   Have you been impacted by a cryptocurrency scam? THE HACK ANGEL are here to assist. They specialize in recovering assets from all types of cryptocurrency fraud. I was tricked into investing in the crypto market, only to discover that it was a sophisticated investment scam. They managed to extort $970,000 of my hard-earned money. THE HACK ANGEL were great in assisting me in recovering my Crypto after I had lost so many coins to con-artists claiming to be recovery experts. The best way to recover your lost Crypto’ is to first of all gather all the necessary details of the scam. Then get in touch with reputable recovery specialists like THE HACK ANGEL. A legitimate recovery expert on cryptocurrency recovery services. After submitting all relevant information and requirements to the professional recovery expert, a total of $830,000 was recovered from the $970,000 taken from my wallet account. I was overjoyed to have recovered this much. Thank you very much for your professionalism and accuracy. So, if you are in this scenario and want to recover from an online Crypto scam, contact THE HACK ANGEL. All you have to do is explain your incident and follow through. EMAIL Email at support@thehackangels.com Website at www.thehackangels.com WhatsApp +1(520)2 0 0-2 3 2 0 Ask any questions and get back your lost funds immediately.

  • Marcus Henderson

    Aug 13, 2025

    Bitcoin Recovery Testimonial After falling victim to a cryptocurrency scam group, I lost $354,000 worth of USDT. I thought all hope was lost from the experience of losing my hard-earned money to scammers. I was devastated and believed there was no way to recover my funds. Fortunately, I started searching for help to recover my stolen funds and I came across a lot of testimonials online about Capital Crypto Recovery, an agent who helps in recovery of lost bitcoin funds, I contacted Capital Crypto Recover Service, and with their expertise, they successfully traced and recovered my stolen assets. Their team was professional, kept me updated throughout the process, and demonstrated a deep understanding of blockchain transactions and recovery protocols. They are trusted and very reliable with a 100% successful rate record Recovery bitcoin, I’m grateful for their help and highly recommend their services to anyone seeking assistance with lost crypto. Contact: Capitalcryptorecover@zohomail.com Phone CALL/Text Number: +1 (336) 390-6684 Email: Recoverycapital@fastservice.com Website: https://recovercapital.wixsite.com/capital-crypto-rec-1

  • michaelgabor681bc3da70abb2b47aa

    Aug 16, 2025

    Pinnacle Credit Specialist has helped me achieve my dream car in less than 21 days of working with them. I applied for a car loan 4 years ago but was not approved because of my low FICO score of 541 and the negative items on my credit report. But when I came across this great credit specialist called Pinnacle Credit Specialist who helped me dispute all negative items on my credit report and equally raise my FICO score to 801. All this was done in less than 21 days. My car loan has been approved. They are professionals and can get results quickly. Contact them via: PINNACLECREDITSPECIALIST@GMAIL.COM or call +1 (409) 331 2269.

  • Wendy Taylor

    Aug 16, 2025

    My name is Wendy Taylor, I'm from Los Angeles, i want to announce to you Viewer how Capital Crypto Recover help me to restore my Lost Bitcoin, I invested with a Crypto broker without proper research to know what I was hoarding my hard-earned money into scammers, i lost access to my crypto wallet or had your funds stolen? Don’t worry Capital Crypto Recover is here to help you recover your cryptocurrency with cutting-edge technical expertise, With years of experience in the crypto world, Capital Crypto Recover employs the best latest tools and ethical hacking techniques to help you recover lost assets, unlock hacked accounts, Whether it’s a forgotten password, Capital Crypto Recover has the expertise to help you get your crypto back. a security company service that has a 100% success rate in the recovery of crypto assets, i lost wallet and hacked accounts. I provided them the information they requested and they began their investigation. To my surprise, Capital Crypto Recover was able to trace and recover my crypto assets successfully within 24hours. Thank you for your service in helping me recover my $647,734 worth of crypto funds and I highly recommend their recovery services, they are reliable and a trusted company to any individuals looking to recover lost money. Contact email Capitalcryptorecover@zohomail.com OR Telegram @Capitalcryptorecover Call/Text Number +1 (336)390-6684 his contact: Recoverycapital@fastservice.com His website: https://recovercapital.wixsite.com/capital-crypto-rec-1

  • gladyslescott090eb2a573a615a4646

    Aug 18, 2025

    Hello everyone, my name is Kiara Hahn from California. I want to share my story about a powerful spell caster named Dr. EASBNAM. I was heartbroken when my fiancé left me without warning, and I spent the last month feeling confused, guilty, and devastated. Desperate for help, I searched online for relationship advice and found Dr. EASBNAM, who has helped many people with their relationship problems. I reached out to him, and he promised to bring my fiancé back to me within 72 hours. After following his instructions, my fiancé surprisingly showed up at my doorstep, apologized, and now we’re living happily together again. If you’re having relationship issues, you can contact Dr. EASBNAM at: mail whatsapp him on +2349134682114 or also contact him via his Facebook page: https://web.facebook.com/profile.php?id=61552423487938&sk=about

  • edinabritonfdea873cbdf34f9a

    Aug 20, 2025

    HIRE A  LEGITIMATE CRYPTO RECOVERY EXPERT // VISIT THE HACK ANGEL   Have you been impacted by a cryptocurrency scam? THE HACK ANGEL are here to assist. They specialize in recovering assets from all types of cryptocurrency fraud. I was tricked into investing in the crypto market, only to discover that it was a sophisticated investment scam. They managed to extort $970,000 of my hard-earned money. THE HACK ANGEL were great in assisting me in recovering my Crypto after I had lost so many coins to con-artists claiming to be recovery experts. The best way to recover your lost Crypto’ is to first of all gather all the necessary details of the scam. Then get in touch with reputable recovery specialists like THE HACK ANGEL. A legitimate recovery expert on cryptocurrency recovery services. After submitting all relevant information and requirements to the professional recovery expert, a total of $830,000 was recovered from the $970,000 taken from my wallet account. I was overjoyed to have recovered this much. Thank you very much for your professionalism and accuracy. So, if you are in this scenario and want to recover from an online Crypto scam, contact THE HACK ANGEL. All you have to do is explain your incident and follow through. EMAIL Email at support@thehackangels.com Website at www.thehackangels.com WhatsApp +1(520)2 0 0-2 3 2 0 Ask any questions and get back your lost funds immediately.

  • harlanfrank32917a8efcd5fc4161

    Aug 21, 2025

    I'm 29 years old, born and living in the U.K. I don't know whether it was my own fault due to forgetting to pay, or if there was an issue with the payment going through, but I have ended up missing the deadline for a British Gas payment of £280. Upon finding out I'd missed this repayment after receiving a letter in the post (no reminders since the initial bill was issued), I paid it immediately, but it was too late. I checked my credit score on Experian, and it had dropped a massive 157 points(l) due to this one single missed payment. To add some context, my credit score has been 999 (the max) since I was 18 years old. It has never once dipped as I am always on top of all my payments. I have no credit cards, no loans, and never have been in any debt my entire life. I have paid my bills on time every single month for the last 10 years and am shocked that this one single miss has caused such a drastic drop! Usually I wouldn't be as bothered, but I was in the process of applying for my first mortgage! I became terrified that this is going to affect my application. I was introduced to PINNACLE CREDIT SPECIALIST by a realtor agent Daniel. I must say my experience working with Pinnacle Credit Specialist is the best. I have gained back my excellent credit score within a few weeks working with them. What impressed me most is how he went the extra mile for me when it came to making sure I got the mortgage I wanted with a low deposit down. Thanks to my realtor Daniel for recommending Pinnacle Credit Specialist, my credit score is back to 999. Email: PINNACLECREDITSPECIALIST@GMAIL.COM or call +1 (409) 331 2269. Thank you so much.

  • Robert Alfred

    Aug 22, 2025

    CRYPTO SCAM RECOVERY SUCCESSFUL – A TESTIMONIAL OF LOST PASSWORD TO YOUR DIGITAL WALLET BACK. My name is Robert Alfred, Am from Australia. I’m sharing my experience in the hope that it helps others who have been victims of crypto scams. A few months ago, I fell victim to a fraudulent crypto investment scheme linked to a broker company. I had invested heavily during a time when Bitcoin prices were rising, thinking it was a good opportunity. Unfortunately, I was scammed out of $120,000 AUD and the broker denied me access to my digital wallet and assets. It was a devastating experience that caused many sleepless nights. Crypto scams are increasingly common and often involve fake trading platforms, phishing attacks, and misleading investment opportunities. In my desperation, a friend from the crypto community recommended Capital Crypto Recovery Service, known for helping victims recover lost or stolen funds. After doing some research and reading multiple positive reviews, I reached out to Capital Crypto Recovery. I provided all the necessary information—wallet addresses, transaction history, and communication logs. Their expert team responded immediately and began investigating. Using advanced blockchain tracking techniques, they were able to trace the stolen Dogecoin, identify the scammer’s wallet, and coordinate with relevant authorities to freeze the funds before they could be moved. Incredibly, within 24 hours, Capital Crypto Recovery successfully recovered the majority of my stolen crypto assets. I was beyond relieved and truly grateful. Their professionalism, transparency, and constant communication throughout the process gave me hope during a very difficult time. If you’ve been a victim of a crypto scam, I highly recommend them with full confidence contacting: 📧 Email: Capitalcryptorecover@zohomail.com 📱 Telegram: @Capitalcryptorecover Contact: Recoverycapital@fastservice.com 📞 Call/Text: +1 (336) 390-6684 🌐 Website: https://recovercapital.wixsite.com/capital-crypto-rec-1