PESTLE Analysis

PESTLE helps you to analyse external factors which can affect your business. The six factors are: political, economic, social, technological, legal or environmental. With a clear overview of these factors you can better understand the position and potential of your business in the market.
2 hours
Target group

Tips for use

Make a large printout of the PESTLE Canvas template and use it during a brainstorm. Get inspiration from the PESTLE example that was made for McDonald’s.

How to use

Each letter in the word PESTLE stands for a category of factors. For each category determine if there are trends or developments that have an impact on your business. Factors can affect your business in a negative way, but they can also represent opportunities. Once you have determined which factors influence your business you can review whether they have a positive or a negative influence. You can do this for instance by adding a color: red for negative and green for positive. 

Political factors 

Decisions made by the government are political factors. Governments have a great impact on the public facilities in a country, but also on the economy. Think of decisions regarding to policies, laws, restrictions, tariffs, tax regulation, governmental programs and grants. Write down those political factors that influence your business. 

Economic factors 

The economic situation of a country greatly influences how your business can operate and be successful. Think of economic factors like interest rates, exchange rates, inflation, economic growth, unemployment etc. Write down those rates or other economic factors that have an impact on your business. 

Social factors 

Social factors have to do with the demographic within a country or region and with cultural aspects. Important demographical statistics are age distribution, education levels, population growth rate, ratio of males to females, etc. Cultural aspects consist of the attitudes, beliefs or values of the population. Write down the important demographics of the population of your environment and their cultural aspects. 

Technological factors 

Technology advancement of your market determines in which technologies your business must invest to remain up-to-date. Technology factors are for instance automation, technical innovations, R&D investments, and rate of technology exchange. Write down what kind of technologies there are important in your market and how advanced they are.

Legal factors

There is a wide range of laws that influence the way your business operates. Think of employment regulations, privacy and data security, discrimination laws, tax laws, advertising and marketing laws, online business laws, and many others. Write down those laws that influence or might influence your business. 

Environmental factors 

Environmental factors consist of aspects like weather, geographical location, climate and climate change. Elements that influence the ecology are also important, like limited natural resources, recycling, waste disposal, and other elements. Write down those environmental factors that have an impact on your business.