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Looking to use a PESTLE analysis effectively? It’s actually simpler than it seems; you only need a PESTLE analysis template to get you started. However, you first need to have a full understanding of what PESTLE is and the reasons why companies use it.
What is PESTLE analysis?
PESTLE analysis is a study of six macro-environmental factors. These factors affect businesses and industries worldwide. Each letter of the analysis stands for a specific environmental factor and are broken down as followed:
- Political factors
- Economic factors
- Socio-cultural/social factors
- Technological factors
- Legal factors
- Ecological/environmental factors
By studying how these factors influence a business, industry, or brand, a person can discover trends and use analytical data to enhance productivity and sales. As such, decision-makers can make informed and strategic changes that may lead to more success for the company or brand.
PESTLE Analysis Factors Explained
The political factors account for all the political activities that go on within a country and if any external force might tip the scales in a certain way. They analyze the political temperament and the policies that a government may put in place for some effect. For example, the fiscal policy, trade tariffs and taxes are those things that a government levies on traders and organizations and they greatly alter the revenue that is earned by those companies.
The economic factors take into view the economic condition prevalent in the country and if the global economic scenarios might make it shift or not. These include the inflation rates, foreign exchange rates, interest rates etc. All these can affect the supply and demand cycle and can result in major changes of the business environment.
Social factors have to do with the social mindset of the people that live in a certain country. This sums up the aspect of culture, age demographics, gender and its related stereotypes, at times this analysis has to include the religious factors (when pertaining to products or services of a different kind).
Technological factors take into consideration the rate at which technology is advancing and how much integration does a company needs to have with it.
Legal factors have to do with all the legislative and procedural components in an economy. Also, this takes into account certain standards that your business might have to meet in order to start production/promotion.
Environmental factors have to do with geographical locations and other related environmental factors that may influence upon the nature of the trade you’re in. For example, agri-businesses hugely depend on this form of analysis.
Who benefits from a PESTLE Analysis Template?
Anyone who conducts a PESTLE analysis will benefit from the data discovered. This analysis has been used by business analysts, CEOs, and anyone in a position to make strategic or important business decisions.
Not only do large companies or enterprises benefit from a PESTLE analysis — startups can too, so long as they take the time to be thorough with their study. Even students who wish to understand how businesses are susceptible to failures related to political, economic, and the remaining factors, can conduct a PESTLE analysis. All that’s needed is access to the relevant data.
For many, a PESTLE analysis template can help cut down the time it takes to do the analysis. Rather than creating everything from scratch, the template allows you to quickly add information to each respective category. You can create your PESTLE analysis yourself, or you can use a pre-designed template. But whichever PESTLE analysis template you choose, you should know how to use it correctly.
How to Create a Pestle Analysis Template
This is a PESTLE analysis template that allows a company to understand what basics are required to conduct the analysis onto the environment. It combines all the representative factors in one table, and then you need to analyze based on the current market situation.
Here is a comprehensive list of headings that one must look toward while carrying out the analysis on a market.
- Trading policies
- Government changes
- Shareholder and their demands
- Governmental leadership
- Foreign pressures
- Conflicts in the political arena
- Disposable income
- Unemployment level
- Foreign exchange rates
- Interest rates
- Trade tariffs
- Inflation rate
- Foreign economic trends
- General taxation issues
- Taxation changes specific to product/services
- Local economic situation and trends
- Ethnic/religious factors
- Advertising scenarios
- Ethical issues
- Consumer buying patterns
- Major world events
- Buying access
- Shifts in population
- Consumer opinions and attitudes
- Views of the media
- Law changes affecting social factors
- Change in Lifestyle
- Brand preferences
- Working attitude of people
- Technological development
- Research and development
- Trends in global technological advancements
- Associated technologies
- Legislations in technological fields
- Access into the technological field
- Consumer preferences
- Consumer buying trends
- Intellectual property and its laws
- How mature a certain technology is
- Information technology
- Employment law
- Consumer protection
- Industry-specific regulations
- Competitive regulations
- Current legislation home market
- Future legislation
- Regulatory bodies and their processes
- Environmental regulations
- Environmental issues
- Stakeholder/ investor values
- Staff attitudes
- Management style
- Environmental regulations
- Customer values
- Market value
How to Find a PESTLE Analysis Template
If you’ve decided to use a pre-designed PESTLE analysis template, you can find many of them online. There are templates for PowerPoint, some for PEST analysis (which is the same as PESTLE, just minus the last two macro-environmental factors), and specific industries. For instance, if you’re planning to do or have a PESTLE analysis conducted for the banking industry, you can find templates designed to help you address common concerns for this industry.
Once you’ve found a template, you must start addressing questions included in the template, or questions you have. For instance, in the political section, you’d aim to answer what governmental laws and regulations affect your industry. Is political corruption a concern? What labor laws must the company abide by?
These are the type of questions you’ll answer for each section of the analysis and include in your PESTLE analysis template. The more questions you find answers for, the more complete your PESTLE analysis template will be.
Generic templates — ones not focused on a certain industry — are similar to specific templates, but different in design. In that way, you can just select the one that is most visually appealing for the readers of the analysis. For the industry-specific templates, you’ll want to choose one that is both appealing and suits your needs.
Create a Clean PESTLE Analysis Template
Remember: the point of any analysis or template is to convey information thoroughly, accurately, and correctly. If your PESTLE analysis template is over-designed or difficult to read or follow, critical information may be lost in the shuffle. As such, the PESTLE analysis won’t be as effective as it could be.
A clean PESTLE analysis template, clearly conveying information of the six different environmental factors, will do wonders than a flashier template that’s difficult to understand.
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