Pestel Framework
The PESTEL framework is designed to provide managers with an analytical tool to identify different macro-environmental factors that may affect business strategies, and to assess how different environmental factors may influence business performance now and in the future.
The PESTEL Framework includes six types of important environmental influences: political, economic, social, technological, environmental and legal. These factors should not be seen as independent factors. Factors such as technological advances may probably affect the social and economic conditions in different markets.
Below, some characteristics in each environmental factor are listed, which may give business managers guidance to, which factors may be of importance to a company's strategy. The list is however far from complete, and it only gives managers some preliminary inspiration to, which factors may be of relevance for handling business strategies. Many factors, that are not included below, may have an effect on business success, and each company must evaluate for themselves, which key drivers of change will potentially have strategic and competitive consequences.
Political factors
• Stability of government
• Social policies: (e.g. social welfare etc.)
• Trade regulations: (e.g. the EU & NAFTA)
• Tax policies
• Entry mode regulations
Economic factors
• Disposable income of buyers
• Credit accessibility
• Unemployment rates
• Interest rates
• Inflation
Social Factors
• Population demographics: (e.g. aging population)
• Distribution of Wealth
• Changes in lifestyles and trends
• Educational levels
Technological factors
• New innovations and discoveries
• Pace of technological innovations and advances
• Pace of technological obsolescence
• New technological platforms (e.g. VHS and
The PESTEL Framework includes six types of important environmental influences: political, economic, social, technological, environmental and legal. These factors should not be seen as independent factors. Factors such as technological advances may probably affect the social and economic conditions in different markets.
Below, some characteristics in each environmental factor are listed, which may give business managers guidance to, which factors may be of importance to a company's strategy. The list is however far from complete, and it only gives managers some preliminary inspiration to, which factors may be of relevance for handling business strategies. Many factors, that are not included below, may have an effect on business success, and each company must evaluate for themselves, which key drivers of change will potentially have strategic and competitive consequences.
Political factors
• Stability of government
• Social policies: (e.g. social welfare etc.)
• Trade regulations: (e.g. the EU & NAFTA)
• Tax policies
• Entry mode regulations
Economic factors
• Disposable income of buyers
• Credit accessibility
• Unemployment rates
• Interest rates
• Inflation
Social Factors
• Population demographics: (e.g. aging population)
• Distribution of Wealth
• Changes in lifestyles and trends
• Educational levels
Technological factors
• New innovations and discoveries
• Pace of technological innovations and advances
• Pace of technological obsolescence
• New technological platforms (e.g. VHS and