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Using PESTEL Analysis in Strategic Planning For Non-Profits
PESTEL is a method of analysing the impact a variety of factors may have on potential profitability of an organisation or industry.
A macro environmental analysis technique, PESTEL analyses the impact that political, economic, socio-cultural, technological, environmental and legal factors may have on an industry’s profitability potential (Johnson, Scholes & Whittington, 2005). Within each major PESTEL heading, there are a variety of sub-factors to be considered. PESTEL analysis can be used by non-profit organizations as part of the strategic planning process. It can also be used in conjunction with other management tools such as Porter’s Five Forces Analysis and market segmentation and marketing and management capabilities analysis.
PESTEL has been designed to review and analyse the impacts on profitability however it can be used by non-profit organizations to identify areas where funding or operations may be threatened. Analysing the macro-environment of the non-profit organization is important to ensure that the organization can meet future challenges.
The Impact of Political Factors on Non Profit Organizations
When considering the impact that political factors may have on future industry profitability, government stability, taxation policies, foreign trade regulations and social welfare policies may all contribute to an industry’s profit potential (Johnson, Scholes & Whittington, 2005).
For non-profit organizations that provide community development services in developing countries, government stability may be a key issue to the ongoing provision of future services. Taxation policies may have either a positive or negative impact on the likelihood of donors continuing to donate and on the organization obtaining new donors.
Economic Factors May Impact on Need for Services or Donations
Business cycles, GNP trends, interest rates, money supply, cost of living and inflation, unemployment trends and
PESTEL is a method of analysing the impact a variety of factors may have on potential profitability of an organisation or industry.
A macro environmental analysis technique, PESTEL analyses the impact that political, economic, socio-cultural, technological, environmental and legal factors may have on an industry’s profitability potential (Johnson, Scholes & Whittington, 2005). Within each major PESTEL heading, there are a variety of sub-factors to be considered. PESTEL analysis can be used by non-profit organizations as part of the strategic planning process. It can also be used in conjunction with other management tools such as Porter’s Five Forces Analysis and market segmentation and marketing and management capabilities analysis.
PESTEL has been designed to review and analyse the impacts on profitability however it can be used by non-profit organizations to identify areas where funding or operations may be threatened. Analysing the macro-environment of the non-profit organization is important to ensure that the organization can meet future challenges.
The Impact of Political Factors on Non Profit Organizations
When considering the impact that political factors may have on future industry profitability, government stability, taxation policies, foreign trade regulations and social welfare policies may all contribute to an industry’s profit potential (Johnson, Scholes & Whittington, 2005).
For non-profit organizations that provide community development services in developing countries, government stability may be a key issue to the ongoing provision of future services. Taxation policies may have either a positive or negative impact on the likelihood of donors continuing to donate and on the organization obtaining new donors.
Economic Factors May Impact on Need for Services or Donations
Business cycles, GNP trends, interest rates, money supply, cost of living and inflation, unemployment trends and