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What Is The PESTEL Framework?: Political Factors

The PESTEL framework provides managers with an analytical tool to identify macro-environmental factors that can influence business strategies and performance. It covers six categories: political, economic, social, technological, environmental, and legal factors. While independent, changes in one area like technology may affect others like the economy or society. Managers use PESTEL analysis to understand key drivers of change and incorporate consideration of relevant macro factors into strategic planning.

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Bezad Dadachanji
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227 views3 pages

What Is The PESTEL Framework?: Political Factors

The PESTEL framework provides managers with an analytical tool to identify macro-environmental factors that can influence business strategies and performance. It covers six categories: political, economic, social, technological, environmental, and legal factors. While independent, changes in one area like technology may affect others like the economy or society. Managers use PESTEL analysis to understand key drivers of change and incorporate consideration of relevant macro factors into strategic planning.

Uploaded by

Bezad Dadachanji
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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What is the PESTEL Framework?

Recommend this article to your friends! 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 DVD)

Environmental factors Environmental protection laws Waste disposal laws Energy consumption regulation Popular attitude towards the environment Legal factors Employment regulations Competitive regulations Health and safety regulations Product regulations The key for business managers is therefore to discover the main drivers of change that may affect business strategies, and to discover the factors most likely to influence the performance of the business. In conducting a PESTEL analysis, business managers may create strategies that take several macro-environmental factors into consideration, so that the strategy formulation process will be as sensitive to current and future environmental factors as possible. Search for more knowledge: Custom Search Date Created: 2009-09-13 Posted by: Admin

Related resources: What is Michael Porter's 5 forces? Internationalization of Multinational Corporations Global strategies for MNCs: Christopher A. Bartlett & Sumantra Ghoshal What is the Balanced Scorecard? What is the BCG Matrix? What is a SWOT analysis? What is Michael Porter's Diamond Model? Reference(s) Exploring Corporate Strategy Johnson, Gerry. Scholes, Kevin Richard Whittington: (2006); Prentice Hall Keywords:
Online MBA, Online MBA Courses, PESTEL Framework, PESTEL, Environment, Environmental factors, business strategy, Strategy development, strategy formulation

http://www.businessmate.org/Article.php?ArtikelId=16

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