PESTLE Analysis Template Essay

Your notes Potential Impact: Implication and importance The list below is just to get you started. Remember to put these, and others that you add in the context of your organization or business. For example if you are a small private company the behaviours of a Wall Mart / Tesco or other large international player may well impact on you.If you are a local authority, government changes will change your priorities. In the NHS changes to treatments and public attitudes will also impact etc. About your organization.How might the factors listed on the left impact your business or part of the organization? H – HighM – MediumL – Low U – Undetermined Time Frame:0 – 6 months6 – 12 months 12 – 24 months 24 + months Type:Positive +Negative – Unknown Impact:Increasing >Unchanged = Decreasing < Unknown Relative Importance:Critical Important Un-important Unknown Political – SWOT Trading policies Funding, grants and initiatives Home market lobbying/pressure groups International pressure groups Wars and conflict Government policies Government term and change Elections Inter-country relationships/attitudes Terrorism Political trends Governmental leadership Government structures Internal political issues Shareholder/ stakeholder needs/ demands ___________________ ___________________ ___________________ ___________________ ___________________ Economic – SWOT Home economy situation Home economy trends Overseas economies and trends General taxation issues Taxation changes specific to product/services Seasonality/weather issues Market and trade cycles Specific industry factors Market routes and distribution trends Customer/end-user drivers International trade/monetary issues Disposable income Job growth/unemployment Exchange rates Tariffs Inflation Interest and exchange rates Consumer confidence index Import/export ratios Production level Internal finance Internal cash flow ___________________ ___________________ ___________________ ___________________ ___________________ Social – SWOT Consumer attitudes and opinions Media views Law changes affecting social factors Brand, company, technology image Consumer buying patterns Major events and influences Buying access and trends Ethnic/religious factors Advertising and publicity Ethical issues Demographics (age, gender, race, family size,) Lifestyle changes Population shifts Education Trends Fads Diversity Immigration/emigration Health Living standards Housing trends Fashion & role models Attitudes to work Attitudes to people doing certain types of work Leisure activities Occupations Earning capacity Staff attitudes Management style organizational culture Changes to education system ___________________ ___________________ ___________________ ___________________ ___________________ Technological – SWOT Competing technology development Research funding Associated/dependent technologies Replacement technology/solutions Maturity of technology Manufacturing maturity and capacity Information and communications Consumer buying mechanisms/technology Technology legislation Innovation potential Technology access, licensing, patents Intellectual property issues Global communications Inventions Innovations New discoveries Research Energy uses/sources/fuels Communications Rate of obsolescence Health (pharmaceutical, equipment, etc.) Manufacturing advances Information technology Internet Transportation Bio-tech Genetics Waste removal/recycling Email M-learning E-learning Collaboration tools Software changes RSI ___________________ ___________________ ___________________ ___________________ ___________________ Additional split of information if doing a PESTLE analysis rather than a PEST analysis: Legal – SWOT Current legislation home market Future legislation European/international legislation Regulatory bodies and processes Environmental regulations Employment law Consumer protection Industry-specific regulations competitive regulations ___________________ ___________________ ___________________ ___________________ ___________________ Environmental – SWOT Ecological Environmental issues International National Local Environmental regulations Customer values Market values Stakeholder/ investor values Staff attitudes Management style organizational culture Staff morale Staff engagement Global factors EU based factors ___________________ ___________________ ___________________ ___________________ ___________________ top Remember this is only a tool. Call it what you like – use whatever factors you feel are appropriate. Other variations include: PEST analysis (STEP analysis) – Political, Economic, Sociological, Technological PESTLE/ PESTEL analysis- Political, Economic, Sociological, Technological, Legal, Environmental; PESTEL analysis PESTEL analysis- Political, Economic, Sociological, Technological, Environmental, Labour (Labor) related; PESTEL analysis (rare no references available) PESTLIED analysis- Political, Economic, Social, Technological, Legal, International, Environmental, Demographic STEEPLE analysis – Social/Demographic, Technological, Economic, Environmental, Political, Legal, Ethical SLEPT analysis – Social, Legal, Economic, Political, Technological STEPE analysis – Social, Technical, Economic, Political, and Ecological ETPS analysis – Economic, Technical, Political and Social – Scanning the business environment PESTLE Analysis on an HR department or other internal function While the PEST or PESTLE analysis is primarily aimed at looking at the external environment of an organization, many HR courses ask students to use the PEST or PESTLE analysis model to look at their own function. In this context we need to imagine that the department (HR) is an organization in its own right and look outside. Factors to include in your analysis may include the following: Political What is the culture of the organization, How is the HR function viewed by other functions? Who are the political champions of HR (or its adversaries)? Shareholder views Economic What is the budgetary position of the department, Is more money available? Are our customers likely to spend more or less money on the services we offer? What is happening to the financial status of the organization Interest rates Inflation Salary trends in the sector Sociological Other departmental attitudes to HR Population shifts (age profile) Education Fads Diversity Immigration/emigration Health Living standards Housing trends Fashion & role models Age profile Attitudes to career Technological What changes may be coming our way? What new technology/ systems, How do we record attendance, performance? how might this change? Use of and encourage home working? Communications technologies changes of technology that will increase/ reduce the need for recruitment changes to HR software Legal What is happening in our sector that will impact what we do? Minimum wage, Working time, Food stuffs, Under 18 working, Occupational/ industrial Training etc. What changes will impact the services of the organization Environmental Staff morale Staff engagement Need to reduce storage needs Management attitudes (inside dept/ function) Organizational culture PESTLE Analysis for Schools or Education By rapidbi – Last updated: Sunday, April 19, 2009 – Save & Share – 2 Comments A PESTLE analysis is a tool that can provide prompts to the governors, management and staff involved in the analysis of the changes in the school’s environment that could impact future finance, planning and management decisions. It can enable them carry out a more comprehensive analysis. A PESTLE is usually used in commercial organisations as a part of the strategic development of a business and marketing plan, however a PESTLE analysis can be used as part of identifying the opportunities and threats (swOT) for operational planning within educational and school environments. The PESTLE provides a simple framework within which to consider external factors. PESTLE is used as part of a SWOT for identifying the external factors (OT) Political Schools being privatised (like the NHS) A government initiative creates the risk that the school may fail to deliver the policy or be diverted away from local priorities etc. Changes to the skills required to be a teacher/ tutor Changes to curriculum with short lead times Requirement to be self managing Requirement to be self financing Economic Central or local government funding decisions may affect school/ establishment finances Closure of a local industry may affect fund raising plans etc. Ability of parents to raise funds for optional activities The need to run breakfast/ after schools clubs Ability to invest ‘savings/ surpluses’ Cost of providing resources: Staff – teaching & support Basics – books/ paper Technology solutions laptops etc Interest rates Shortages of materials on national/ international markets Over provision of school places in the area resulting in competition from neighbouring schools The risk of highly valued, key staff moving on to more ‘up and coming’ schools/ academies Social Decline in birth rate, reflecting national trends Local population changes (increasing/ decreasing numbers) Demographic changes may affect likely pupil rolls or the nature of pupils needs e.g. pupils with English as a second language etc. Closure of local firms providing employment Inability to attract staff Social networking – blogs, facebook, twitter Changes to qualifications expected Integration with local community Integration of students with special needs parental preference – an increase in ‘parent power’ has allowed parents more freedom of choice over their child’s school the risk of highly valued, key staff moving on to more up-and-coming establishments Information is accessible to staff anywhere in the world via the Internet Staff were not given enough training or access to effectively change their habits and how they expected information to be made available Technological Changes to standards/ equipment required Risk of selecting the wrong technology at times of change (i.e. windows -v- open source) New computer viruses may affect school/ college operations, Disturbing/ illegal images on the internet may affect ICT security measures etc. Move from paper based books to e-book readers Computer hardware being out of date Computer software being out of date Time to manage IT systems Legislative new legislation may create risks of non-compliance with the law, create new administrative burdens etc Changes to child protection legislation Raise the age of school leaving age Raise/ lower the age of starting school. Nursery/ kindergarten Change to school opening hours Changes to funding of charity based organisations Health & safety legislation Environmental A new highway layout near the school may create new dangers for pupils etc Waste disposal Reduction of green space available for activities Changes to local bus routes Using a significant amounts of paper and photocopier toner to produce printed information. For a more comprehensive PESTLE article see our pain page. A PESTLE Template: Area being reviewed Factor: Is factor positive or negative? Political P – N P – N P – N P – N Economic P – N P – N P – N P – N Social P – N P – N P – N P – N Technological P – N P – N P – N P – N Legislative P – N P – N P – N P – N Environmental P – N P – N P – N P – N Remember this is only a tool. Call it what you like – use whatever factors you feel are appropriate. Other variations include: PEST analysis (STEP analysis) – Political, Economic, Sociological, Technological PESTLE/ PESTEL analysis- Political, Economic, Sociological, Technological, Legal, Environmental PESTEL analysis- Political, Economic, Sociological, Technological, Environmental, Labour (Labor) related PESTLIED analysis- Political, Economic, Social, Technological, Legal, International, Environmental, Demographic STEEPLE analysis – Social/Demographic, Technological, Economic, Environmental, Political, Legal, Ethical SLEPT analysis – Social, Legal, Economic, Political, Technological STEPE analysis – Social, Technical, Economic, Political, and Ecological ETPS analysis – Economic, Technical, Political and Social – Scanning the organizational environment Choose the acronym that most suits you or your organization. http://www.familybunker.com/forums/students-workshop/11967-swot-pest-analysis-part-ii.html Examples of SWOTs Strengths and weaknesses à ¨ Resources: financial, intellectual, location à ¨ Cost advantages from proprietary know-how and/or location à ¨ Creativity (ability to develop new products) à ¨ Valuable intangible assets: intellectual capital à ¨ Competitive capabilities à ¨ Effective recruitment of talented individuals à ¨ Competitive Advantage à ¨ Brand reputation à ¨ New product Opportunities and threats à ¨ Expansion or down-sizing of competitors à ¨ Market trends à ¨ Economic conditions à ¨ Expectations of stakeholders à ¨ Technology à ¨ Public expectations à ¨ All other activities or inactivities by competitors à ¨ Criticisms by outsiders à ¨ Changes in markets à ¨ All other environmental condition à ¨ Global Influences à ¨ Nothing PESTEL Analysis for Macro-Environment http://accalecturenotes.blogspot.com/2011/01/pestel-analysis-for-macro-environment.html PESTEL Analysis is used for the assessment of macro-environment (environment which indirectly affects business decisions) in which the business operates. Managers have to identify changes in macro-environment that influence their business decisions. These can be identified using PESTEL analysis. In exams, using this framework ensures that we have gathered sufficient information necessary to analyze the scenario. Other frameworks used are equally acceptable. Below discussed factors are interrelated, points discuss in one factor can be included in other. 1. POLITICAL. The following points to be considered when evaluating the political environment of the industry or business. 1. Availability of government grants or assistance in the form of cash or other asset perhaps upon fulfillment of some conditions. 2. Award schemes to enforce quality standards. 3. Stable or dynamic political environment i.e. is the government changes frequently resulting in changing policies being implemented by every new government or the country are under martial law or war? 4. Rules and regulations are polite or stringent. This indicates the venerability of the business to legal risk i.e. fines (can be discussed under legal also). 5. Barriers to entry and exit. Example by imposing licensing requirements. 6. Provision of training to workers. 7. Provision of infra-structure, includes sewerage, transportation and energy. 2. ECONOMICAL 1. Business cycle, identify the stage from which the business is suffering. The stages are depression, recession, recovery and boom. 2. Industrial cycle, identify the stage from which the industry is suffering. The stages are introduction, growth, maturity and decline. 3. Access to resources, finance at reasonable cost, workers at reasonable rates, material economically and easily and equipment with maintenance and spare parts. 4. Customers & suppliers, their availability and bargain power should be assessed. 5. Taxation policies i.e. direct or indirect taxation and rates 6. Inflation, interest and exchange rates. 7. National income can also influence demand for the firm’s product. 8. Level of unemployment in the country, high unemployment may suggest that employer has dominant position and can negotiate low wage rate with workers 9. Stock market condition rising stock market index means rising demand of shares in the stock market may suggest easily availability of finance at cheaper cost. 3. SOCIAL 1. Stakeholders demand, taste and behavior. Example customer, financers and supplier who may not support if your business conflicts their principles. 2. Increasing or decrease population. Increasing population may suggest that higher demand for younger people products e.g. toys while decreasing population suggests opposite. 3. Attitude to work. Are people committed to their work or they just comply with standards. Healthy workers are more productive than overstressed workers. 4. Income distribution, how wealth for the country is scattered among individuals, even distribution may suggest that majority of the people can buy our product while uneven distribution may suggest that majority is poor and minority is rich which create demand for high volume and low priced and low volume high priced products respectively. 5. Social footprint. Impact that business leaves on the society 6. cultural change should be identified e.g. identifying societies leisure activities, changes in customs. 4. TECHNOLOGICAL 1. Stable or robust. Stable environment may suggest longer product life cycle and low level of obsolesces while robust environment suggests otherwise. 2. New product developments may permit doing business more efficiently, cost-effectively and effectively. Employer may move towards automation, this is turn may affect other factors of the framework 3. Innovation leads to break-through in economy and it may affect society as well. Example facebook, youtube are the products which affecting youths behavior. 5. ENVIRONMENTAL 1. Green house effect has affected the way business trades. There are increasing demands of environment friendly products. Example using hybrid cars and paper bags instead of plastic bags. 2. There are increase emphasis on environmental footprints and sustainability. 3. There are legislations being enacted related to environment. This forces the business to change its policies (the way they do business) and disposal costs to business like restoration of site. 6. LEGAL 1. Competition law imposes restriction of mergers and acquisitions to promote efficiency gained through competition. 2. Employment legislation protects rights of workers by setting minimum wage requirements, anti-discrimination and anti-harassment legislation. 3. Health and safety legislation to protect workers. 4. Imposition of high import duties to protect home industries. 5. Licensing requirement as discussed above Students are advised to think as many points as possible so they can quickly identify if they come in the exam scenario. Having thought its impact on business activities can save you lot of time. PESTEL ANALSIS is frequently used framework in exams and in practice. It is worth spent some time on it.