PESTLE Analysis Example for Business

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If we want to analyse our business correctly, we have to understand the analyzing process. When you come to understand the analyzing process, you can see some beautiful models. This model name is the business model, strategic model, strategic management model etc. However, there is described as the PEST model or the PESTLE Analysis Example.

PEST Analysis Example


The PEST Model for identifying and analyzing the factors in the general environment. It covers the political, economic, socio-cultural and technological. The PEST model is the previous situation of PEST PESTLE Analysis example.

PESTLE Analysis Example


The PESTLE Analysis Example extends version of PEST model. The PESTLE Analysis Example covers the political, economic, socio-cultural, technological, legal and environmental (natural).

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PESTLE Analysis Example

PESTLED Model


The PESTLED Model consists of PEST Analysis, PESTLE Analysis and added other factors. The PESTLED Model covers the seven elements. Such as:-

  1. Political
  2. Economic
  3. Socio-cultural
  4. Technological
  5. Legal
  6. Environmental (natural), and
  7. Demographics.

However, there is described the PESTLE Analysis Example and its factors.

1. Political Environment:


Political is the first one of the PESTLE analysis example for business. The government of a country intervenes in the national economy through setting policies or rules for business. In our country, we see many such systems, for example, import policy, export policy, taxation policy, investment policy. Furthermore, drug policy, competition policy, consumer protection policy, etc. Sometimes, the government pursues nationalization policy for state ownership of the business. Several countries, for example, India, chase state-driven mercantilism to increase exports and reduce imports. Some countries have liberalized their economy and shifted from a centrally managed economy to a capitalist economy or welfare economy.

In Bangladesh, the succeeding governments are highlighting more on denationalization rather than on national proprietorship. As global competition has increased, the government has also liberalized its trade policies to be in line with the WTO agreements. Another important issue is political stability that affects the operations of business firms substantially. Even the decision about investment is highly affected by political stability. We have seen in Bangladesh how political instability has in the past affected investment and trading in the country. In many other countries, also, political instability or political disturbances substantially affected businesses. Such as:-

  • Sri Lanka (the civil war with LTTE),
  • Nepal (mass upsurge by the Maoist activists),
  • Afghanistan and Pakistan (terrorist activities), and
  • Argentina (default in international debt).

Additionally, government agencies and pressure groups are also exercising influences on business operations of firms that have the political character. Managers or manageress must be capable of recognizing the implications of the actions of these groups and agencies. Governmental agencies include different bodies, for example, particular ministries, CCI&E, Board of Investment, NBR, etc. Pressure groups comprise Consumers Association of Bangladesh, numerous Employers’ Associations, Chambers of Commerce and Industry and the like. Since the pressure groups set limits on the commercial managers, supervisors should have vibrant thoughts about the activities of these groups.

2. Economic Environment:


Another PESTLE analysis example is economic. A country’s economic well-being affects market attractiveness. Some economic variables are related to determining the business prospects. There is thus a need to analyze the economic environment prudently by the business firms. The economic environment comprises a distinct variable with which management must be concerned. The economy country can be in circumstances of recession or boom, or it may be in a state of changeability. Strategy-makers/Managers must have the capability to forecast the state-owned of the economy. The enactment of business establishment impactু by the fitness of a state’s economy. It permits the obligation of reviewing the economic environment to detect trends, changes, and their strategic implications.

When the force on the PESTLE analysis example for business, business establishments activate their businesses in marketplaces comprising of persons. These individuals are probable to become consumers when they have buying control. And purchasing power depends on income, prices, savings debt and the availability of credit. For that reason, business establishments must pay consideration to the revenue and ingesting outlines of the consumers. However, all the economic variables must treat holistically for the clear envisioning of the entire economy and market.

3. Socio-cultural Environment:


Socio-cultural is the most important one of PESTLE analysis example for business. Its forces contain lifestyle changes, culture, social mobility, attitudes towards technology, and people’s beliefs, opinion, values etc. These forces command a particular set of attitudes and values with resultant lifestyles. A society’s attitudes and values form the keystone of culture. They often drive other conditions and changes. The demand of products changes with the changes in social attitudes.

4. Technological Environment:


One PESTLE analysis example is technology. Socio-cultural factors differ across countries. In numerous states, worker variety is now a common occurrence. We find in some countries the increasing lifespan of the population, a trend toward fewer children, movement of people from rural areas to urban areas, increasing rate of female education, the entrance of more and more women into the typical personnel, etc. All these have a main consequence on a country’s communal character and health. Consequently, it is very significant for managers of commercial establishments to study. Also, it forecasts the influence of cultural and social changes on the upcoming of business actions in terms of conference consumer interest and needs. Business organizations must provide proposal goods in the society that resemble their attitudes and values.

Accordance with PESTLE analysis example, dimensions of technological include, the internet, information technology, global transfer of technology, biotechnology, and so forth. None can reject the point that the pace of alteration in these dimensions of technology is tremendously fast. Technological changes substantially affect the firm’s operations in many ways. Advancement of industrialization in any country depends mostly on the technological environment. Technology has main influences on merchandise development, potential competition, and manufacturing efficiencies. The business establishments that face difficulties with unstable or changing technology are always in problems in terms of expectedness than those organizations that have steady technologies. The special effects of technological changes happen principally through new materials, processes, and products. An entire industry may be transformed or revitalized due to the use of modern technology.

Strategy formulation links to technological changes. And the intelligent response to the ever-increasing technological advances should be entrepreneurial rather than reactive. Strategic managers need to monitor developments in technology for their particular industry when formulating the strategy. Rapid and thorough analyzing of technological changes aids managers attain higher market portion because of initial acceptance of the new technology. A business must be conscious of technical changes to escape uselessness and encourage innovation. It means that plan managers of an organization must be skillful in technological predicting. Technological forecasting can protect and improve the profitability of rims in growing industries.

5. Legal Environment:


Legality may be an essential PESTLE analysis example for business. The legal environment contains rules and supervisory agenda in a country. Several laws legalize the business actions of creativities such as the Factories Act, the Labor Code, Industrial Relations Ordinance, and the Company law and the Contract Act, to name a few. Business laws mainly defend companies from biased competition and also shield customers from biased business practices. Business laws also protect society at large. The laws regarding the merger, acquisitions, industry regulation, employment conditions, unionization, workmen’s compensation and the like affect a firm’s strategy. Straight globalization has instigated essential consequences on the legal environment. Thus, the business managers must have thorough knowledge about the significant laws that protect the business enterprises, consumers and society.

6. Natural Environment:


Natural force is a vital force of PESTLE analysis example in management. Strategy-makers requisite to examine the trends in the natural environment of the country. In where it is operating its business. The most relevant matters in the natural environment that strategy-makers should deliberately embrace the accessibility of raw materials and additional inputs, levels of environmental pollution, changes in the cost of energy, and the changing role of government in environmental protection. Changes in a physical or natural environment, such as global warming, will massively affect our daily lives and the functioning of our organizations with a variety of consequences.

7. Demographic Environment:


Sometimes, demographics attaches with PESTLE analysis example for business. The demographic environment is concerned with a country’s pollution. Specifically, it is related to the population’s size, age structure, geographic distribution, ethnic mix, and income distribution. With over six billion population, demographic changes are evident all over the world. In several countries, there is undesirable population growth. Pairs are around fewer than two children, in various countries. In general, the average age is increasing. In many states, rural-urban migration is rampant. These trends suggest numerous opportunities for firms to develop products and services to meet the needs of diversified groups of people in society. Strategy-makers must create a study of the demographic subjects, particularly, extent and growing amount of things. These are population, age circulation, ethnic mixture, household patterns, educational level, and inter-regional activities.

Advantages of PESTEL Analysis


There have included the essential benefits of PESTLE analysis. Such a:

  • Alertness Development: PESTLE analysis aids companies to get ready for potential threats, which get up time to time due to external factors. For example, a mobile built-up company, any change in technology like the modernisation in mobile sorts is a threat if a firm does not get a feel for the innovation changes in their mobile brand. From this time, they will lose the marketplace stake to its opponents.
  • Cost-Effectiveness: Time and effort are the only cost of PESTLE analysis. Additionally, specific extra programs are also there which can help in forming contributions and reaction.
  • Exploit Opportunities: It benefits in manipulating chances that stand up from time to time due to exterior issues. For say, the Minor interest proportion in the real estate business is a financial feature. That makes an opportunity to the growing demand for housing; as housing loans get inexpensive due to a worse interest rate.
  • Deeper Understanding: The best object about the PESTLE analysis is that it creates easy to realise the aspects that touch the business situation. When it originates to the progress of a fresh product, its growths strategically thoughtful and deeper accepting of numerous factors, for instance, consumer laws, modern technological styles, etc., which shake the product take-off in the market.

In well, we can say that all of the upstairs external environmental issues are consistent under the PESTLE analysis example for business. Therefore, strategy-makers need to analyze all of them in an interrelated fashion to understand. And It needs to visualise the whole of the environment.

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1 Response

  1. sonia says:

    this was helpful

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