How to Use PESTLE

Another tool that can be useful is PEST or PESTLE analysis. PESTLE expands on PEST by allowing for a more comprehensive insights-based analysis. When examining PESTLE, we consider six key factors: Political, Economic, Social, Technological, Legal, and Environmental.

1. Political: This includes aspects such as tax policies, fiscal policies, and local government regulations.
2. Economic: Here, we look at factors like inflation rates and economic growth patterns.
3. Social: This encompasses cultural trends, employee expectations, and seasonal behaviours.
4. Technological: This involves automation, technical awareness, and the impact of new media.
5. Legal: Relevant factors include consumer laws, health and safety standards, and trade barriers.
6. Environmental: This includes geographical location, climate change, and factors contributing to the green agenda.

For example, consider a grocery store analysing how to get groceries to customers.

• Political Factors: There are numerous local and federal government policies regarding single-use plastics, which are increasing the cost of serving customers and are tied to greenhouse gas (GHG) emissions.
• Economic Factors: High inflation rates and supply chain issues are affecting the costs of goods sold.
• Social Factors: The COVID-19 pandemic has changed consumer shopping behaviour, leading to an increased demand for pickup options and intensifying competition.
• Technological Factors: Innovations such as compostable bags made from non-conventional plastics provide a potentially eco-friendly alternative for bagging.
• Legal Factors: Regulatory bodies have not approved the use of certain compostable bagging options at point-of-sale locations.
• Environmental Factors: Environmental groups are questioning the impact of paper bags, complicating the offering of any sustainable bagging options.

As you engage with these factors, you will notice connections among them. PESTLE analysis is a valuable tool for building a well-rounded understanding of the context in which you will operate as you develop solutions.