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PESTLE analysis
Syed Ferhat Anwar

Aims
Prepare a PESTLE analysis for a given situation
and use it to analyze the impact of the external
environment on a sector/industry.
Evaluate the impact on the sector/industry
objectives and strategy of a change in any of the
PESTLE factors.

What is it?
Its a way of working out what is going on out
there so you can then respond to it.

Origin!
Francis Aguilar is referred to as the originator of
this tool.
He talked about PEST Political, Economic,
Social, and Technological as the four
important factors for Scanning the Business
Environment.
Later Legal and Environmental factors were also
added by some analysts and thus evolved the
term PESTLE Analysis.

Use!
PESTLE Analysis is used to examine the current and
future state of the industry/market an
organization/industry belongs/may belong to.
This helps in the strategic planning and gaining the
competitive edge over the others in that market.
Importance of the factors varies depending on the nature
of the industry and company.
For example environmental factors are more important to
tourism sector where as economic and political factors are more
important for the Banking sector.

Task tip
Remember it is not enough to identify the factor,
you must say why it is where it is.

Task
In groups you will be given a sector/industry to
prepare a PESTLE analysis for a specific
destination.
Grouping is expected to be finalized by now. The
sector and destination will be decided randomly!

Task
The first job is to research some issues and
background about the industry.
Where am I going to get this info?
This will require a bit of thought and subtlety on
your part. You must go beyond the obvious!

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Task
This will also require you to undertake a SWOT
of the industry

Analyze SWOTS
A SWOT analysis is a:
Structured evaluation of internal situations
(strengths and weaknesses) and external
situations (opportunities and threats).

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SWOT Competitor Information

Size

My
Industry

Competit
or One

Competit
or Two

Competit
or Three

Global
Status

Economic
Contribut
ion

Social
Contribut
ion

Legal
status

Asset

Liabilities

Business
Value

Stock
Value

SWOT Comparison Sheet

Strengths

What are your business

advantages?

What are your core

competencies?

Where are you making the

most money?

What are you doing well?

My Industry

Competitor 1

Competitor 2

Competitor 3

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SWOT Comparison Sheet

Weaknesses
What areas are you
avoiding?

Where do you lack

resources?

What are you doing poorly?

Where are you losing

money?

What needs improvement?

My Industry

Competitor 1

Competitor 2

Competitor 3

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SWOT Comparison Sheet

Opportunities

Any beneficial trends?

Niches that competitors are

missing?

New technologies?

New needs of customers?

My Company

Competitor 1

Competitor 2

Competitor 3

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SWOT Comparison Sheet

Threats
Obstacles to overcome?

Aggressive competitors?

Successful competitors?
Negative economic
conditions?
Government regulation?
Changing business
climate?
Vulnerabilities?

My Company

Competitor 1

Competitor 2

Competitor 3

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Prioritizing SWOTS

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Once the SWOTs have been identified, they need to be

prioritized, based on criteria such as:
Realistic damage to brand relationships and brand
equity if a weakness or threat is not addressed.
Realistic benefit if a strength or opportunity is
leveraged.
Cost of addressing or leveraging each SWOT.
Time industry has to address or leverage each
SWOT.

The SWOT Prioritization

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Situation Analysis

Industry Analysis
Product/Brand Analysis
Competitive Analysis
(Macro-)Environmental Analysis

Political
Economic
Social
Technological
Legal
Environmental

Industry-focus
sections

Destination
Analysis

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Task
The second is to start working on the
destination and focus on PESTLE
Brainstorm the PESTLE with your members.
Work out how you are going to present this
information.
Remember it is not enough to identify the factor,
you must say why it is where it is.

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POLITICAL

Environmental protection/legislation
Consumer protection
Governments attitude
Competition regulation
Advertising standards

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Economic

Economic growth
Taxation international trade
Exchange Rate
Employment law
Health and Safety law
Inflation
Consumer confidence
Minimum wage

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Social

Income distribution
Demographics
Labour & Social mobility
Lifestyle changes
Attitudes to work and leisure
Education
Fashion and Fads
Health & Welfare
Living conditions

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Technological

Changes in physical sciences

Internet
Energy use and costs
Rates of technological obsolescence
New discoveries
Govt and Industry focus on tech
Govt spending on research

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Legal

Employment law
Health and Safety
Taxation both corporate and consumer
Other regulations
International trade barriers
Strength of the rule of law

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Environmental
How peoples perception and reaction to
environmental issues can affect a business.

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Task
The Third is to write a short piece explaining
how the industry matches with the opportunity
and threat issues you have identified.

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