PESTEL or PESTLE is a simple acronym framework for assessing the key features of a business’ environment. The PESTEL Framework is designed to help us to identify business opportunities, such as government initiatives to promote a certain industry; or potential threats, such as a nationwide skills gap that may lead to problems with hiring.
Before any kind of marketing strategy or tactical plan can be put into action, it is a great idea to conduct a detailed situational analysis. PESTEL Business Analysis is a great way to help you structure such a situational analysis. It is important to note that as situations can and do frequently change, this process should be repeated at regular stages to identify any changes in the macro environment. By successfully monitoring and respond to changes in the macro-environment your business operates within you will be able to differentiate your organisation from your competition and potentially create a competitive advantage.
In a PESTEL analysis, each feature identified is filed under one of the following headings:
These are the categories of external factor deemed likeliest to affect a business’ fortunes. They can also be applied to a digital marketing team’s activities. You may also find references to PEST which is a shortened version of the same process that drops the Legislative and Environmental elements. Here are some examples of the PESTEL model showing the sort of factors that would typically fall under each PESTEL category:
Obviously, you can customise a list like this as you see fit for your business and operating environment. These lists are really just a tool to help analyse and monitor the macro-environmental (external marketing environment) factors in a systematic way. It’s important when undertaking such a PESTEL Analysis that the factors affecting the organisation are not just identified but are also assessed for the level of impact they may have on your organisation. The result of these assessments can then be used used to identify threats and weaknesses which in turn can be used as part of a SWOT analysis.
The first step to running a successful PESTEL analysis is identifying the external factors that affect your project, and listing each one under the appropriate PESTEL heading. You’ll need to involve a variety of stakeholders in order to create a balanced representation of your organisation’s environment. You might ask for ideas from:
Sourcing original ideas from stakeholders is a great way to catalyse insights into your company’s context. However, we’d advise backing up this approach by working through a list of common PESTEL factors, as this reduces the risk of missing important points from your analysis.
Once you have all been through all of these angles and noted relevant factors listed under their respective headings, the analysis itself is complete.
Moving forward, you can use the lists that have been created to inform different aspects of your strategy and activities. If you’re launching a new website, take the technological factors from your analysis into account; if you’re planning a marketing campaign designed to help customers relate to the brand, refer to the social factors from your PESTEL analysis for inspiration; and so on. You will find there are very few decisions that cannot be made easier by making reference to your PESTEL findings.
Your analysis should consider both the present situation and the likely future developments that will affect the business. With this in mind, you may find it helpful to split your findings under each PESTEL category into current factors and scheduled or predicted future factors.
If a new regulation is set to come into force at a certain date, that’s an easy win in your PESTEL. Or, perhaps your competitor has announced the release date of a new product to rival your own. That’s also something you should into account.
Some future PESTEL factors are far harder to predict – especially world events and social trends. In such cases, you may find it useful to add a quantum layer to your analysis by making a note of multiple likely outcomes.
Examples of PESTEL In Action
If you have never run a pestel before it can be great to get some examples of an analysis that has been created for other companies. Just bear in mind that every analysis is different as this is a very flexible tool an process for drawing out what matters to your organisation, so in essence, there is no one size fits all example we can share but you might like to review the following external resources.
Check out these 5 useful Practical Pestle Analysis Examples from 2017 to get a good idea of what a final analysis might look like.
1. Uber PESTEL Analysis Example
2. Nike PESTEL Analysis Example
3. Coca-Cola Pestel Analysis Example
4. Adidas PESTEl Analysis Example
5. Apple PESTEL Analysis Example
There’s no better source of PESTEL intelligence than your own ongoing monitoring of whatever impacts your business the most.
If you’re running a PESTEL for a digital marketing company, or for a digital marketing team within a company, that would mean keeping up with:
If you prefer not to focus on digital marketing, substitute the above suggestions for roughly equivalent news and reports which relate to your company, or to business more broadly.
Trying to stay on top of several types or news and business intelligence is a big job – but thankfully, digital help is at hand.
Instead of manually searching for relevant content on a daily basis, we recommend using a news aggregator application to create a live feed of relevant news to your phone, tablet or laptop.
Target Internet’s CEO, Daniel Rowles, does this using Feedly, which brings together content based on your preferred news sources, chosen keywords and more. It can also be used collaboratively by teams – an approach we would heartily recommend as a way of compiling your PESTEL factors.
Adding data-derived insights is a great way to add clout to your PESTEL analyses – and for this we recommend the following sources:
The World Economic Forum’s regular, free-to-access reports. Here are a few recent examples:
Accenture reports are an excellent source of technology insights, made with business strategy in mind. They’re perfect for PESTEL analysis.
Deloitte reports provide peerless social and business insights.