PESTEL analysis Business & Marketing Essay Research (Essay Sample)
description of pestel analysis and when to use in a companysource..
PESTEL analysis is a system used by companies to evaluate factors that may affects the company operations beyond the internal environment. PESTEL is an acronym standing for politics, economy, society and culture, technology, environment factors and legal factors affecting the company operations. It is one of the most used models used in business planning because it takes into account key aspects of external environment and appraises each of them to form conclusions of market attractiveness and potential, to determine current market and industry performance and to predict market or factors of success in the industry and trends for future growth and success, (Perera, 2).
To understand the PESTEL analysis, six factors are discussed. The first factor is the political factor which includes government regulations, policies and laws affecting business entities. Secondly, economy in which the business operates for example, if the economy has been influenced by inflation rates. The third factor covers socio-cultural factors like demography and consumer spending in a certain society. Advances in technology including internet, prominence of mobile phones etc., affects business operations. It’s the fourth factor of PESTEL analysis. Environmental issues impacting a company are more important than ever, given the fact that environment is changing at a faster rate due to factors related to global warming, for example changes in climate, depletion of natural resources and pollution. The last factor in PESTEL analysis is concerned with laws and regulations affecting a business. This factor sometimes overlap with political factors because they usual relate to political factors. They include laws concerning copyrights, trading and consumer-related laws. It is therefore important to use the above PESTEL analysis tool in evaluating a business because of the following reasons.
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