Updated
A PESTLE analysis examines the external factors a company cannot control itself. The original PEST version has four factors, and PESTLE (also written PESTEL) adds legal and environmental ones.
The factors a PESTLE analysis covers
- Political: government, subsidies, trade restrictions.
- Economic: inflation, purchasing power, interest rates.
- Social: demographics, values, lifestyle.
- Technological: AI, new platforms, automation.
- Legal: for example GDPR and advertising rules.
- Environmental: climate and sustainability.
Example
For an online marketing agency today, the most important factors are technological, such as AI search and Google AI Mode, and legal, such as user consent and Consent Mode v2.
When to use it
Before entering a new market, during strategy planning and when big changes are coming. The findings feed into the opportunities and threats part of a SWOT analysis.
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