PESTLE analysis, an extension of the earlier PEST analysis, is a framework used to scan and assess the external macro-environmental factors that can affect an organization, organized under six categories: Political, Economic, Social, Technological, Legal, and Environmental. Strategists use the framework to systematically identify forces outside a company's direct control, such as regulatory change, economic cycles, shifting social attitudes, technological disruption, legal requirements, and environmental pressures, that may create opportunities or threats for the business. It is commonly used alongside internally focused tools such as SWOT analysis as a starting point for strategic planning.
Facts
Core ClaimPEST analysis is a framework of external macro-environmental factors, political, economic, social and technological, used in strategic management and market research; PESTLE extends it with legal and environmental factors. 1 Cross-Tradition Connections
Associated With
PESTLE analysis is commonly used to feed the opportunities and threats half of a SWOT analysis; the two tools are taught together.
Sources
1. Wikipedia, PESTLE Analysis
WikipediaWikipedia, PEST analysis lead sectionQuote, Wikipedia, PEST analysis lead section
PEST analysis was developed in 1967 by Francis Aguilar as an environmental scanning framework for businesses to understand the external conditions and relations of a business in order to assist managers in strategic planning.
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