Pest Analysis

Principles and Functions of Management
Dilshan Perera
MBA (PIM Sri.J)
B.B.Mgt.(Marketing)Spe.(Hons.)
Chartered Marketer, Dip. M ,MCIM (UK)
MSLIM,MIM(SL)
Head of Marketing - HNB Assurance PLC
Module Contents
Management Functions
Social Responsibility and Ethical Behavior
Environment surrounding a business organization

Interacting with stakeholder and use of stakeholder
management
Porter's Five Force model and its use for assessing the
external environment
Sources, availability and quality of data for

environmental analysis
12
Learning objective
After this lecture participants will be able to identify
and undertake PESTLE analysis
What is PEST Analysis?

It is very important that an organization considers its
environment before beginning the marketing
process. In fact, environmental analysis should be
continuous and feed all aspects of planning. The
organization's marketing environment is made up
from:
1. The internal environment
2. The micro-environment
3. The macro-environment e.g. Political
(and legal) forces, Economic forces,
Sociocultural forces, and Technological
forces. These are known as PEST factors.
Similar analysis
Other forms of PEST - PESTLE, PESTLIED, STEEPLE and SLEPT:
Some people prefer to use different flavors of PEST analysis, using other
factors for different situations. The variants are:
PESTLE/PESTEL: Political, Economic, Sociological, Technological, Legal,
Environmental;
PESTLIED: Political, Economic, Social, Technological, Legal, International,

Environmental, Demographic;
STEEPLE: Social/Demographic, Technological, Economic, Environmental,
Political, Legal, Ethical; and
SLEPT: Social, Legal, Economic, Political, Technological
PESTLE analysis
PESTLE is an analytical tool which considers
external factors and helps you to think
about their impacts
PESTLE analysis
Is a useful tool for understanding the big picture of
the environment in which you are operating
By understanding your environment, you can take
advantage of the opportunities and minimize the
threats.
This provides the context within which more detailed

planning can take place to take full advantage of the
opportunities that present themselves.
The factors in PESTLE analysis

P Political
The current and potential influences from political pressures
E - Economic
The local, national and world economic impact
S - Sociological
The ways in which changes in society affect the project
T - Technological
How new and emerging technology affects our project / organization
L - Legal
How local, national and global legislation affects the project
E - Environmental
Local, national and global environmental issues
PESTLE vs. SWOT

In contrast to a SWOT, PESTLE encourages you to
think about the wider environment and what might
be happening now and in the future which will either
benefit or be of disadvantage to the organization,
individual etc
a kind of radar which picks up trends and
developments in the external environment which can
be used to inform longer term planning and strategy
making
PESTLE
Political:
Government type and stability

Freedom of the press, rule of law and levels of bureaucracy and corruption
Regulation and de-regulation trends
Social and employment legislation
Tax policy, and trade and tariff controls
Environmental and consumer-protection legislation
Likely changes in the political environment
Economic:
Stage of a business cycle

Current and projected economic growth, inflation and interest rates
Unemployment and supply of labor
Labor costs
Levels of disposable income and income distribution
Impact of globalization
Likely impact of technological or other changes on the economy
Likely changes in the economic environment
PESTLE
Sociological:
Cultural aspects, health consciousness, population growth rate, age distribution,

Organizational culture, attitudes to work, management style, staff attitudes
Education, occupations, earning capacity, living standards
Ethical issues, diversity, immigration/emigration, ethnic/religious factors
Media views, law changes affecting social factors, trends, advertisements, publicity
Demographics: age, gender, race, family size
Technological:
Maturity of technology, competing technological developments, research funding,
technology legislation, new discoveries
Information technology, internet, global and local communications
Technology access, licensing, patents, potential innovation, replacement
technology/solutions, inventions, research, intellectual property issues, advances in
manufacturing
Transportation, energy uses/sources/fuels, associated/dependent technologies, rates of
obsolescence, waste removal/recycling
PESTLE
Legal:
current home market legislation, future legislation

European/international legislation
regulatory bodies and processes
environmental regulations, employment law, consumer protection
industry-specific regulations, competitive regulations
Environmental:
Ecological
environmental issues, environmental regulations
customer values, market values, stakeholder/ investor values
management style, staff attitudes, organizational culture, staff engagement
Issues of concern
The main problem with these external PESTLE factors is that
they are continuously changing
Therefore PESTLE analysis should include a thorough analysis
of what is affecting the organization or a project Now, and
what is likely to affect it in the Future
The result of a PESTLE analysis is usually a list of positive and
negative factors that are likely to affect a project
However, by themselves, theses factors they mean very little
It is important to bear in mind, that PESTLE analysis requires careful
Application of results
SUMMARY
Political (incl. Legal)
Economic
Sociocultural
Technological
Environmental regulations and

protection
Economic growth
Income distribution
Government research
spending
Tax policies
Interest rates & monetary

policies
Demographics, Population
growth rates, Age
distribution
Industry focus on
technological effort
International trade regulations

and restrictions
Government spending
Labor / social mobility
New inventions and

development
Contract enforcement law

Consumer protection
Unemployment policy
Lifestyle changes
Rate of technology
transfer
Employment laws
Taxation
Work/career and leisure

attitudes
Entrepreneurial spirit
Life cycle and speed of

technological
obsolescence
Government organization /
attitude
Exchange rates
Education
Energy use and costs
Competition regulation
Inflation rates
Fashion, hypes
(Changes in) Information

Technology
Political Stability
Stage of the business cycle
Health consciousness &

welfare, feelings on safety
(Changes in) Internet
Safety regulations
Consumer confidence
Living conditions
(Changes in) Mobile

Technology
Thank You!

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Principles and Functions of Management

Head of Marketing - HNB Assurance PLC

Environment surrounding a business organization

Sources, availability and quality of data for

What is PEST Analysis?

PESTLIED: Political, Economic, Social, Technological, Legal, International,

This provides the context within which more detailed

The factors in PESTLE analysis

PESTLE vs. SWOT

Government type and stability

Stage of a business cycle

Cultural aspects, health consciousness, population growth rate, age distribution,

current home market legislation, future legislation

Environmental regulations and

Interest rates & monetary

International trade regulations

Labor / social mobility

New inventions and

Contract enforcement law

Work/career and leisure

Life cycle and speed of

Energy use and costs

(Changes in) Information

Stage of the business cycle

Health consciousness &

(Changes in) Internet

(Changes in) Mobile

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