Or you may not realize which technological barriers customers in rural areas face, compared to customers in highly populated areas. Or while your product works well in its current environment, exporting to the other side of the country may be a financial disaster. PESTLE analysis helps to look at many different and influential factors which could affect the success of your product launches. It encourages the development of strategic thinking for a deeper understanding of strategic planning.
While we can use PESTLE to analyze firms in a broad sense, it can also be narrowed down and used for specific products, marketing plans, and customer relationships. Particularly, when used in new developments within the firm, PESTLE analysis can raise awareness of potential threats.
It offers people professionals insight into the external factors impacting their organisation. The analysis is flexible, so organisations can use it in a range of different scenarios.
People professionals and senior managers can use the results to guide strategic decision-making. For a transcript of this video, please scroll to the end of the page. Political : Tax policy; environmental regulations; trade restrictions and reform; tariffs; political stability. Sociological: Cultural norms and expectations; health consciousness; population growth rates; age distribution; career attitudes; health and safety.
Technological: New technologies are continually emerging for example, in the fields of robotics and artificial intelligence , and the rate of change itself is increasing. Environmental: Global warming and the increased need to switch to sustainable resources; ethical sourcing both locally and nationally , including supply chain intelligence.
Pandemics and other emergencies. By analysing those factors, organisations can gain insight into the external influences which may impact their strategy and business decisions.
It allows HR and senior managers to assess any risks specific to their industry and organisation, and use that knowledge to inform their decisions. PESTLE is a popular topic in HR, learning and development, organisation development and marketing courses in the UK as it underpins the importance of considering the impact of external forces on a range of plans for change.
It can also highlight the potential for additional costs, and prompt further research to be built into future plans. This means following these steps:. Organisations that regularly and systematically conduct such analyses often spot trends before others, thus providing competitive advantage. It helps an organisation establish the external factors that could impact decisions made inside the organisation. An organisation on its own cannot affect these factors — nor can these factors directly affect the profitability of an organisation.
Conducting a strategic analysis means scanning the external environment to detect and understand broad, long-term trends. These can encompass:. It provides the senior management team with contextual information about the direction in which the business is going, brand positioning, growth targets, and any risks such as another pandemic which might bring a decline in productivity.
It can also help determine the validity of existing products and services and define new product development. Workforce planning is a business process that aligns business and people strategies. A PESTLE analysis can help to identify disruptive changes to business models that may have a profound impact on the future employment landscape. Organisations are facing huge changes in their workforce from increased skills gaps, the creation of job roles that did not exist 10 years ago, and job reductions or displacement.
This pace of change will only increase. It can help prioritise business activities to accomplish specific marketing objectives within a set timeframe. A PESTLE analysis can be a powerful activity for understanding the context for change , and the potential areas of focus to make change successful. In this situation, PESTLE is most effective when used in association with a SWOT analysis to provide information about potential opportunities and threats around labour changes; for example, skills shortages and current workforce capabilities.
A PESTLE analysis can also be used as a framework for looking outside the organisation to hypothesise what may or may not happen in future. James has been writing business and finance related topics for work. By Jim Woodruff Updated January 28, Strengths: Identify the advantages that your business has over the competition. Weaknesses: Be honest about the weaknesses in your operations.
Opportunities: Identify the external trends that you can take advantage of. Threats: Assess the outside conditions that may be obstacles and have a negative impact on business. Political: Determine how the current direction of the political parties may influence business development and growth. Economic: Examine the effects of interest rates, taxes, the stock market, consumer confidence and other economic metrics. Social: Acknowledge the changes in lifestyles, advertising targets, ethics, demographics and culture.
0コメント