Sep 01 2020
The PESTLE framework is tool used to analyze the external factors businesses should consider when making decisions. By identifying and recording the Political, Economic, Social, Technological, Legal and Environmental factors your business faces, you can provide decision makers with a clear outline of the threats and opportunities that may influence outcomes.
The success of your PESTLE analysis depends on the depth of your research and your ability to predict and monitor changes in PESTLE factors. Taking a three-step approach to carrying out your analysis can help you create meaningful reports every time.
Research External Factors
Each category within the PESTLE framework encompasses a host of factors that can be researched and recorded to form the final product. The diagram below showcases examples of external factors to examine as you conduct your PESTLE analysis:
Not sure where to find this information? Search engine results may return relevant articles that can be strung together to fill in your template. Searching for population data, changes in interest rates and seasonal buying trends may turn up some quick facts and figures that help shape your PESTLE analysis.
But what if you run into conflicting data? Journalists often report on current events using different approaches and data to back up their points. It can be difficult to find accurate, unbiased information. Luckily, government sources and third-party industry reports provide a wealth of unbiased data and analysis to help fill up your PESTLE template.
Now that you’ve gathered key data and trends on the current events impacting your business, it’s time to consider the future. This may entail splitting each category in your template to include two separate time periods. Alternatively, you may consider presenting your projections in a conclusion paragraph.
You’re probably wondering how to make solid predictions without some type of superpower. Sometimes it’s easy to make conclusions about PESTLE factors, while other factors may be shrouded in uncertainty. Say you’re thinking of launching a software platform or tool that helps users navigate a new government policy. If the policy has a clear start date that is several months away, then you already have some idea of what the future holds.
But things aren’t always so cut and dry. Luckily, analysts, economists and consultants use various techniques to forecast data and fill in the blanks. Accessing reports that include forward-looking data and analysis can help cut out some of the guesswork.
A forward looking graph for US population (source: IBISWorld)
Monitor & Update
Once you’ve recorded all the research, it’s important to refresh facts and figures on a regular basis. You may want to come up with a schedule or inquire about your research provider’s update schedule to see when you’ll have access to new data. Monitoring news outlets and government websites is another way to stay up to date on certain factors. When it comes to news syndicates and other news platforms, updates may occur sporadically or not at all. Finding sources that have a history of covering similar events over long periods can make your job easier when it’s time to find updates.
Outdated PESTLE reports may undermine the success of your endeavor. Relying on old information to inform your decisions may lead your project astray and give you less of an edge in the competition. Whether you’re launching a new business, developing a new product or working on a marketing campaign, regular updates to PESTLE reports can help your team stay agile in the ever-changing business environment.