Pestle
|
|
Hello,
i found this article on some site... which i cant recall for now!
and i think it might be helpful for some students giving P3 to understand how to apply PESTEL in practice!
hope it helps!
Regards
kashif
PESTLE analysis aims to identify and summarise environmental influences on an organisation or policy.
PEST analysis involves identifying the political, economic, socio-cultural and technological influences on an organisation - providing a way of auditing the environmental influences that have impacted on an organisation or policy in the past and how they might do so in future.
Increasingly when carrying out analysis of environmental or external influences, legal factors have been separated out from political factors (due to increasing legal influences outside national political systems, such as European and regional legislation). The increasing acknowledgement of the significance of environmental factors has also led to Environment becoming a further general category, hence 'PESTLE analysis' becoming an increasingly used and recognised term, replacing the traditional 'PEST analysis':
P - political
E - economic
S - socio-cultural
T - technological
L - legal
E - environmental
The following can be used as a checklist to consider and prompt analysis of the different influences. The model can then be used to inform and guide further analysis.
1. Which of the environmental factors are affecting the organisation?
2. Which of these are the most important at the present time? In the next few years?
Political
• Taxation policy
• Local government/devolved administrations
Economic
• Business cycles
• GNP trends
• Interest rates
• Inflation
• Unemployment
• Disposable income
Socio-cultural
• Population demographics
• Income distribution
• Social mobility
• Lifestyle changes
• Attitudes to work and leisure
• Consumerism
• Levels of education
Technological
• New discoveries
• ICT developments
• Speed of technology transfer
• Rates of obsolescence
Legal
• International/European Agreement/Law
• Employment Law
• Competition Law
• Health & Safety Law
• Regional legislation
Environmental
• Environmental impact
• Environmental legislation
• Energy consumption
• Waste disposal
The items in the list above are of limited value if they are merely seen as a listing of influences. It is therefore important that the implications of the factors are understood. It may be possible to identify a number of structural drivers of change, which are forces likely to affect the structure of an industry, sector or market. It will be the combined effect of some of these separate factors that will be important, rather than the factors separately. A good example can be found in the forces which are leading to increased
globalisation of industries and markets.
It is particularly important that PEST(LE) is used to look at the future impact of external factors, which may be different from their past impact. Using scenarios may help with this.
PEST(LE) analysis may also help to examine the differential impact of external influences on organisations either historically or in terms of likely future impact. This approach builds on the identification of key trends and asks to what extent they will affect different organisations.
Strengths
• Straightforward, easy to grasp tool
• Broad categories, covering major environmental factors - can prioritise specifics for own policy area
• Can generate a lot of material about influences
• Can help to identify the long term drivers of change which can be built into scenarios
Weaknesses
• Will be of limited use unless the results are used to inform and guide analysis.
• Of limited use unless there is some analysis of the differential impact of the trends - need also to indicate which can combine to greater effect and which might cancel each other out.
References
Exploring Corporate Strategy-Gerry Johnson, Kevan Scholes)
Structuring the thinking - PESTLE
In Practice: SU Alcohol Project
The team constructed a PEST analysis from the view point of industry following some preliminary research and discussions with key stakeholders in order to:
Provide a framework for understanding the macro environment in which the drinks industry operates
Provide a means of identifying key external trends to feed into decision making
Identify key areas of relevance to policy making
Provide a distillation of key themes and considerations
POLITICAL
Concern about binge drinking and anti-social behaviour
Government use increased demand for alcohol as a way of boosting indirect tax revenues. No harmonisation across the EU which means cross border shopping is common
Duty Free trading abolished in the EU in 1999 with little affect on the drinks industry
International consolidation had led the EU to pay attention to cross-border mergers as they influence domestic markets
ECONOMIC
Rising consumption has been linked to an increase in the relative affordability of alcohol, and in particular increases in consumer's disposable incomes
Price fluctuation can be dictated by global commodity markets which gives multi-nationals an advantage
Increasing price differential between on and off trade
SOCIO-CULTURAL
Drinking is built into the social fabric
Recent upsurge in café culture
Increase in eating out and in holidaying overseas - impact on consumption of wine and bottled water
Increases in under age drinking
Health of consumers
TECHNOLOGICAL
packaging
bottling
influence of the Internet and eCommerce
LEGAL
Licensing Act 2003
Private Security Industries Act 2003
Beer Orders and other changes to Competition Law in the 1990s
ENVIRONMENTAL
Increasingly focus on the sustainability agenda - and corporate social responsibility
|
Today
Sponsored Links
A real concise information for PESTEL, thanks a lot, now I have more understanding on PESTEL.
Linear Mode
