PESTLE analysis

PESTLE analysis indicates the external factors affect the business. PESTLE stands for political, economical, social, technological, legal and environmental. 

First of all, political refers to the attitudes of political parties. It may involve in taxation, policies or any kind of government directives.

Economic factors have significant impacts on the businesses. Economic growth, interest rates or inflation are the macro economic factors can affect businesses. The micro economic factor can be the income that people spend on goods everyday.

Social factors involve in population, trend, cultural beliefs and age distribution. For example, the trend of this year is checked shirt, demand will increase and people will buy more checked shirt.

Technological factors are the things such as new technology development, new intervention or ecommerce. These things can affect the output of businesses. Moreover, businesses can use these opportunities to advertise their products and provide convenience ways for customers to shop like E-commerce.

Legal factors include all the law that can influence the company’s businesses. Every business needs to follow the law so that benefits will be equaled to stakeholder. Factors can be consumer law, employment law and health and safety law.

Last but not least, environmental factors are the impact of surrounding environment such as weather, climate and resources. For example, it is not successful for a skiing shop opens in the summer.

It would be useful if competitors factor should be included because without competitors, a business would not know what are their weaknesses to improve. I have studied this when I was in my previous college but it was SLEPT analysis. In the SLEPT analysis, it doesn’t include the environmental factor; this is one of the most important factors that businesses need to consider. 


Also, there are PEST and STEEPLED analysis. In the STEEPLED analysis, they add extra ethical and demographic factors into PESTLE. Demographic factors are the things that related to personal characteristics such as gender, age or level of education; and ethical factors are things related to reputation and business ethics. I have learnt a little bit about business ethics when I was in high school. 


One of an example of a bad business ethics was about KFC in my country-Vietnam. KFC advertises their food with nice pictures and they said that it's healthy to eat. However, there were many KFC chain stores in Vietnam had to close because they provided food with low quality. This has brought down the image of KFC.