Topic 1.3: PESTEL Factors and the Business Environment Vocabulary

PESTEL framework

An analytical framework for identifying external forces that shape a market.

Political factor

Government policies and political dynamics that affect market activity (trade policy, taxes, subsidies, mandates, bans, political stability)

Economic factor

Aspects of the broader economy that affect a market (stability, household income, inflation, unemployment, interest rates)

Social factor

Trends in society and culture that affect consumer behavior (demographics, cultural norms, lifestyle, population growth)

Technological factor

Features of a market related to technology availability (internet, automation, rate of innovation)

Environmental factor

External environmental conditions that promote/limit market activity (geography, resources, climate, consumer environmental views)

Legal factor

Specific laws, rules, regulations affecting a market (employment, consumer protection, health/safety, IP, antitrust)

Business viability

The ability of a business to operate profitably and sustainably in a given market.

Market attractiveness

How favorable a market is for a business to enter, based on PESTEL factors aligned with the business model.

Subsidy

A government payment or tax break supporting a specific business activity.

Mandate

A government requirement that businesses adopt a specific practice.

Inflation

A general rise in prices over time, reducing the purchasing power of money.

Interest rate

The cost of borrowing money, usually expressed as a percentage.

Intellectual property

Legal protections (patents, trademarks, copyrights) for creations of the mind.

Local career opportunities

PESTEL factors that make a location viable for businesses help determine ________________ in those types of businesses.