PESTLE Analysis Explained (With Examples)

In this article, you’ll get PESTLE Analysis Explained in a clear and concise way.

PESTLE Analysis is a simple and widely used tool that helps you consider and analyze trends by specific categories.

This framework helps you understand the “big picture” forces of change in your society and how they might affect your business. Additionally, it helps you take advantage of the opportunities that these forces of change present.

It contains the following trend categories:

1. Political – examples of this are infrastructure, tax policy, regulation, trade, and restrictions
2. Economical – examples of this include economic growth, inflation, labor costs, business cycles, the stock market’s performance, and foreign trade
3. Social – examples include demographics, education, cultural norms, and income distribution
4. Technological – examples include emerging technology, technology transfers among industries, R&D efforts, and automation solutions
5. Legal - examples include regional laws, court decisions, law enactments and discontinuations, and more
6. Environmental - examples include resource management, energy availability, workforce health, and climate considerations

Depending on your industry, certain forces may effect your business a great deal more than other forces. And you might need to adapt and evolve your business practices over time as a result. For example:

• A large social network like Facebook can be disproportionately impacted by social, political, and legal forces and compelled to enforce stricter community guidelines.
• An automobile manufacturer like the Ford company might be impacted by environmental, legal, and social forces and may need to prioritize the production of hybrid and electrical vehicles.
• A solo entrepreneur in the sales or coaching industry might be impacted by technological forces and may gain access to tools that help them acquire customers much easier than before.