PESTLE Analysis with examples

In today’s global marketplace, it’s harder than ever to make products or services appeal to everyone. There are many factors beyond money that go into deciding on a company’s products and services. That’s where market research comes in.  

It would help to understand your target customers and their buying habits by looking at demographics, culture, and other socio-economic factors. Ideally, you’d like to know what factors into your customers’ buying decisions.

PESTLE analysis can make it easier for your company to determine the most important factors to your market segment. In addition, it can be a great way to consider other factors besides money that are still important to your success. It’s helpful to look at both the external and internal context for an overall picture of the business.  

Think about how the climate change debate will affect your brand. You might want to know what environmental issues your target customers care about most. Maybe sustainability is a critical factor when presenting your brand.

What is PESTLE analysis?

PESTLE is an acronym. It stands for political (P), economic (E), socio-cultural (S), technological (T), legal (L), and environmental (E). These are all external factors that can positively or negatively impact your company.

Using the model, managers can identify the uncertain macroeconomic variables that will affect their business. It’s hard to tell how these factors will play out. However, the analysis helps you visualize different scenarios so you can make smart decisions.

Benefits of PESTLE Analysis

Find new business opportunities

When creating a business plan, you need to demonstrate a thorough understanding of the market and consumer behaviour using strategic tools.

The PESTLE analysis can tell you if the macroeconomic environment is good for new products or services. But, in case there are risks, this analysis tells you what to watch out for. Then you’ll know what to expect when you enter a new market and be able to plan for them ahead of time. 

Risk analysis of new or existing projects

Also, the PESTLE analysis lets you keep an eye on existing projects. A PESTLE analysis is a great way to perform due diligence if you have overseas projects. You can see whether there are new risks or opportunities since the project started.

It’s handy for any new project, too. Every new project should be subject to a detailed analysis.

Update business strategies

It’s a good idea to use PESTLE analysis to update the company’s strategy every so often. It’s a changing market, and the political climate is polarized. Economic and political factors have also influenced the tastes of consumers. Technology disruption is here to stay. It doesn’t take long for a product to go out of style.

Let’s take a quick look at these six factors.


You can determine how your business will perform in the current political climate by looking at current international and local politics. The direction of politics can affect everything from taxes, labour laws, environmental regulations, etc., so it’s crucial for businesses to stay on top of things. This way, you can assess the impact and plan for any potential changes.


You have to know what economic factors are relevant to your business. Then you can implement strategies for dealing with any negative or positive consequences. For example, interest rates, the stock market, inflation, and consumer confidence can all affect businesses.

 Economic recessions or supply shortages can also change the market. So make sure you look at these economic metrics before making assumptions about the future. They may not match up down the road with what you see right now in the market.


Managers should consider social factors when making decisions because they have a significant impact on people’s lives. We’re talking about social aspects such as culture, ethics, population, age distribution, gender distribution, and income distribution. For example, having an ageing population may increase the demand for products geared toward seniors.

Younger generations are becoming more prevalent in the marketplace, so values are shifting too. In addition, modern lifestyles influence how consumers spend their money, so the business strategy should take that into consideration.


The bare minimum is a strong social media presence, a great website, and an app that doesn’t crash too often. To succeed, you have to know how to use all different technologies effectively.

Business strategists must keep up with different types of technology such as IoT (Internet of Things), VR (Virtual Reality), and AI (Artificial Intelligence). So you need to update your technology to keep up with disruptive technologies.

Changing technology can make current technology obsolete, so businesses have to stay on top of these technological advancements.


There are a number of legal factors that can affect your business, from worker safety to intellectual property laws. It’s essential to pay close attention to any new laws or regulations that may affect your business and evaluate existing laws for changes when necessary.

Legislation is the creation and enforcement of rules, regulations, and mandates by the government. The laws change all the time. As a result, you should also evaluate any changes to existing laws since those might go unnoticed if there isn’t much public discussion about them.


Environment issues can cause problems for businesses if they’re not prepared. Pollution and weather, for instance, can hurt your business. These factors aren’t in your control but plan ahead to minimize their impact.

Adverse weather patterns are on the rise. So there’s no better time than now to make disaster recovery plans in case of a natural disaster.

As you can see, PESTLE analysis is hardly a one-time activity. So it’s best to keep an eye on these six areas of the external environment on a regular basis.

You can do the analysis as a group using any brainstorming technique. Here’s what a brainstorming session looks like.

How to do a PESTLE analysis

Decide what you want to accomplish with your PESTLE analysis. What are you trying to analyze, and for how long? In order to get accurate results, you don’t want to go too far in the future because predictions get less reliable the farther you go.

Pick a group of people who can contribute fresh ideas to your business. Choose members from senior leadership as well as those who know the industry well. Individuals in these roles should have an understanding of business operations and strategic planning.

Gather information by holding brainstorming sessions. Pick a brainstorming technique that works best for your group. Follow all the standard guidelines, like generating a lot of ideas without speaking ill of anyone’s ideas.

After you’ve come up with ideas, rank them. Then, make sure you think through how likely this is, what impact it will have on your business and what ways you can mitigate the new risks or take advantage of the new opportunities.

List the top 10 – 15 areas you think are the most significant risks and opportunities for your company. Then, inform relevant decision-makers about the findings. The next step is to decide what action to take. Afterward, decide when to do the follow-up PESTLE analysis so you can monitor trends and update it as needed.

Disela Dassanayake
Disela Dassanayake
Disela is a business analyst with a passion for researching and sharing information on technical topics. He has over 15 years of industry experience in multiple domains, including industrial engineering and information technology. He has a master's degree in Engineering Management from the University of Alberta and a master's degree in Computer Information Systems from Boston University. He currently holds multiple professional designations, including PMP, CBAP, PMI-PBA and ITIL.

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