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Home » What is PESTLE Analysis – Business Analysis Tool

What is PESTLE Analysis – Business Analysis Tool

By Richard Daniels Reading Time: 2 mins
Updated February 14, 2017

Business environment is a major area which needs proper analysis before starting a particular business or project. There are internal factors and external factors which play important role in the success and performance of a business. A variety of analysis tools are available which can be used to analyze the various internal factors and external factors, to develop an understanding of the environment of the business.

What is PESTLE Analysis

PESTLE analysis, holding critical importance in the Business Study Notes and business area, is an offshoot of the well-known PEST analysis. The analysis tool is brought into use by large corporate sectors as well as companies to develop a deep understanding of the various factors that can have profound impacts on the health, performance and success of a particular business. The most common use of the PESTLE analysis is in the launching of a new product, when the company wants to know what type of reception the product is going to get. Defining a framework of macro-environmental factors, the PESTLE analysis gives an overview of the whole environment from a number of angles in order to know the success rates of particular products and the difficulties that will be faced in the launching of that particular product.

There are a number of major questions that should be kept in mind while carrying out a PESTLE analysis, so to conduct a perfect analysis of the situation. Some of them are as:

  • The political stability of the country and its effects on the industry
  • The taxation policies followed by the country
  • The type of government
  • The religious partiality of the government
  • The demographics of the country
  • Various aspects of lifestyle
  • Age distribution
  • Labor laws followed by the country
  • The technological innovations that could affect the industry
  • Importance of the culture
  • The rate of population growth as it can profoundly impact the supply and demand of the products
  • The present rules and regulations on the industry

Above listed are some of the aspects which can play crucial part in the success of a business or industry and should be assessed in depth before giving a start to a particular business. The PESTLE framework lets the marketing managers to develop a better and more promising business strategy with a lesser probability of business fail. Apart from the factors that were included in the PEST analysis, the PESTLE analysis adds two more factors – the Legal factors and the environmental factors.

Author at Business Study Notes
Richard DanielsAuthor at Business Study Notes

Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
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