Aat level 3 BUAW - chapter 7

External analysis - the pestle model

What does PESTLE stand for?

• Political factors

• Economic factors

• Social/demographic factors

• Technological factors

• Legal factors

• Ecological/environmental factors

Political factors

• Housing → where it should be built and how much would be built

• Health care → whether the state or individuals should pay for Care

• Energy → whether to use renewable or non-renewable sources

• Infrastructure → whether to build new roads or to improve public transport

• Crime → the type of punishment and funding for the court system

• Education → what should contain and who should pay for it?

• Defence → how much to spend and where?

• Town planning → rules for new buildings and budgets for councils

• Foreign → who can enter the country and aid levels given to other countries

Economic factors

• Interest rate rates → as these rise they can reduce the amount of spending in the economy

• Exchange rates → as the pound weekend it is easier to sell products overseas but more expensive to buy supplies overseas

• Disposable income → as it increases spending on non-increase

• Business cycles → in a recession consumers move down market and reduce spending

• Inflation → this can increase selling prices or increase the cost of resources

Social factors

• Social structure → this will reflect changes in demographics such as age race religion levels of education

• Values → such as honesty and integrity, equality and discrimination

• Attitude → such as attitudes to protecting the environment and ensuring in inclusivity

• Tastes →such as changes in fashion culture and technology

Technological factors

This is an area which changes can take place very rapidly and the organisation needs to be constantly aware of what’s going on for example AI

Another example new technology is resulted in the production of new products such as hybrid cars these cars have improved fuel economy reduced emissions

Legal factors

• Employment law, minimum living wage trade union recognition and diversity unfair dismissal, redundancy maternity equality and gender pay gap

• Data protection law (GDPR) → the use of data relating to employees and customers

• Health and safety law, fire precautions and safety procedures

• Consumer protection

Environmental factors

• Protection of natural resources → ensuring that natural resources such as water, wood and vegetation is not destroyed

• Sustainability → ensuring that resource resources that I use can be replenished

• Social conscience → ensuring that the organisation does not cause harm or disturbance to its local public or to society as a whole