You’ve got a business problem. Maybe you’ve had one before. Like tax issues. Or a shift in political parties (and their new regulations) strangles production value. Perhaps you’re considering expanding into another state or country and don’t want any more surprises (because surprises in business are rarely a good thing).
PESTLE analysis can help you fix your biggest problems in business. If you know the problem, you can jump right in. But if you don’t have the full situation yet, it’s best to follow this article from top to bottom.
Identify your biggest problem(s)
You can’t start any analysis if the biggest problem isn’t identified first. You’ll just be wasting your time and resources otherwise. You can identify problems in a number of ways. For example, you could conduct a risk analysis. It identifies current risks (or threats) and their impact. The bigger the impact, the worse financial destruction it could have on your business or products.
But if you already know your problem (which is why you’re on the lookout to use PESTLE analysis as a solution) you can start whenever you like. The problem, in this case, appears when you have multiple problems and they’ll all vying for your attention.
You can’t work on all of them at once. You may end up rushing, misplacing information, and unable to give it your all. Although you may find solutions for all problems with just one PESTLE analysis, it’s best to decide which problem to work on first.
Decide what problem to solve first
This only applies if you have more than one intense problem to fix. For example, you could have two but one is time sensitive. Having a countdown makes deciding much simpler. But we don’t always get such a black and white solution.
This is also where a risk analysis could be useful. During that analysis, the problems or threats are given a rating system. Basically from “can wait to be fixed” with low impact to “needs to be fixed ASAP” with high impact. That’s to say, the problem is organized by how devastating it’ll be and how soon it’ll happen. But you can just do this manually after identifying your problem.
It only has to be a short and simple list. One side lists the problems. The other side lists the impact. You can have a third category for a timeline. Categorize each problem based on “low”, “medium”, or “high” impact levels. From this point, you can quickly decide which problem will get your attention first.
Use PESTLE analysis
Know the problem to focus on? Perfect! You can start your PESTLE analysis soon. But first thing’s first: Do you fully know what PESTLE analysis is? It’s quite simple, but only if you understand the six factors this analysis is about.
What is PESTLE analysis?
PESTLE analysis is strategic tool focusing on six outside influences. You can’t change them individually. You can have an opinion, but you can’t affect them directly. For instance, Economic is the first E of PESTLE analysis. Although you contribute to the state of the economy, you can’t save it if it’s failing. You also can’t destroy it.
This applies to the remaining sections of the analysis. You can’t stop, start, or prevent political, economic, social, technological, legal, or environmental factors. Not by yourself. Instead, you have to observe. Watch. And use this information to fix your problem.
Who uses it and why?
PESTLE analysis is used by everyone. But it’s primarily a tool for business analysts. They study problem-solving techniques for businesses. They research the problem and find suitable solutions for the situation. Even so, that doesn’t mean you have to go to college to use PESTLE analysis.
You already understand what PESTLE analysis is. You know what it’s used for. That’s all you need to get to work.
How is it relevant to your problem?
You need information to fix your problem. Answering questions in your PESTLE analysis should uncover the relevant information you need. Here’s a bit of information to help you brainstorm.
Political: Address changes in political parties. Are they for or against your problem? New bills may have been introduced. You need to know them and see how they impact your problem. Don’t forget to have a clear understanding about policy changes, regulations, taxes, and political stability too.
Economic: Consider rates. Everything from interest to labor. You’ll also need to assess the current economic landscape. Is it thriving? Still recovering from the recession? How does it affect you?
Social: This section typically involves your customers. Where they live, what they buy, and what stops them from spending their hard earned cash. Like unemployment rates or housing prices. Without customers, you have no business.
Technological: Every person uses technology in some sort. What type do you use? Should you be upgrading it to keep up with customer demands? Take a look at the competition: what do they use? Does it affect you?
Legal: What legal rights are you bound by? It can be copyright laws. Or contracts between employees. Could these be the cause of your problems? Even if it isn’t, it’s important to keep aware as laws and regulations are constantly changing.
Environmental: Eco-friendliness is crucial for many people (maybe even the ones you interact with). A company that isn’t eco-friendly can find itself under fire in the media. Does this impact your problem? Does it affect your business? Can you take steps now to become more eco-friendly?
Once you have these questions (or ones you’ve come up with) answered, you’re likely on the right path to fixing your big problem. All with the help of PESTLE analysis!