PESTEL ANALYSIS
PEST & PESTEL Analysis
D EFIN ITIO N
“P ES T A N A LY S IS – A N A N A LY S IS O F
TH E P O LITIC A L, EC O N O M IC , S O C IA L
A N D TEC H N O LO G IC A L FA C TO R S IN
TH E EX TER N A L EN V IR O N M EN T O F A N
O R G A N IZ ATIO N , W H IC H C A N A FFEC T
ITS A C TIV ITIES A N D P ER FO R M A N C E.”
[1]
“P ES TEL M O D EL IN V O LV ES TH E
C O LLEC TIO N A N D P O R TR AYA L O F
IN FO R M ATIO N A B O U T EX TER N A L
FA C TO R S W H IC H H A V E, O R M AY
H A V E, A N IM PA C T O N B U S IN ESS .” [2]
U nderstanding the tool
PEST or PESTEL analysis is a simple and effective tool used in situation analysis to identify the key external (macro environment level) forces that might affect an organization. These forces can create both opportunities and threats for an organization. Therefore, the aim of doing PEST is to: find out the current external factors affecting an organization; identify the external factors that may change in the future; to exploit the changes (opportunities) or defend against them (threats) better than competitors would do.
The outcome of PEST is an understanding of the overall picture surrounding the company.
M acro environm ent forces af e fcting a fi rm (PEST forces including legal, environm ental, ethicaland dem ographic forces)
P EST variations
PEST analysis is the most general version of all PEST
variations created. It is a very dynamic tool as new components can be easily added to it in order to focus on one or another critical force affecting an organization.
Although following variations are more detailed analysis than simple PEST, the additional components are just the extensions of the same PEST factors. The analysis probably has more variations than any other strategy tool:
STEP = PEST in more positive approach.
PESTEL = PEST + Environmental + Legal
PESTELI = PESTEL + Industry analysis
STEEP = PEST + Ethical
SLEPT = PEST + Legal
STEEPLE = PEST + Environmental + Legal + Ethical
STEEPLED = STEEPLE +
D EFIN ITIO N
“P ES T A N A LY S IS – A N A N A LY S IS O F
TH E P O LITIC A L, EC O N O M IC , S O C IA L
A N D TEC H N O LO G IC A L FA C TO R S IN
TH E EX TER N A L EN V IR O N M EN T O F A N
O R G A N IZ ATIO N , W H IC H C A N A FFEC T
ITS A C TIV ITIES A N D P ER FO R M A N C E.”
[1]
“P ES TEL M O D EL IN V O LV ES TH E
C O LLEC TIO N A N D P O R TR AYA L O F
IN FO R M ATIO N A B O U T EX TER N A L
FA C TO R S W H IC H H A V E, O R M AY
H A V E, A N IM PA C T O N B U S IN ESS .” [2]
U nderstanding the tool
PEST or PESTEL analysis is a simple and effective tool used in situation analysis to identify the key external (macro environment level) forces that might affect an organization. These forces can create both opportunities and threats for an organization. Therefore, the aim of doing PEST is to: find out the current external factors affecting an organization; identify the external factors that may change in the future; to exploit the changes (opportunities) or defend against them (threats) better than competitors would do.
The outcome of PEST is an understanding of the overall picture surrounding the company.
M acro environm ent forces af e fcting a fi rm (PEST forces including legal, environm ental, ethicaland dem ographic forces)
P EST variations
PEST analysis is the most general version of all PEST
variations created. It is a very dynamic tool as new components can be easily added to it in order to focus on one or another critical force affecting an organization.
Although following variations are more detailed analysis than simple PEST, the additional components are just the extensions of the same PEST factors. The analysis probably has more variations than any other strategy tool:
STEP = PEST in more positive approach.
PESTEL = PEST + Environmental + Legal
PESTELI = PESTEL + Industry analysis
STEEP = PEST + Ethical
SLEPT = PEST + Legal
STEEPLE = PEST + Environmental + Legal + Ethical
STEEPLED = STEEPLE +