Pestel Framework

The PESTEL theoretical account is designed to provide managers with an analytical tool to identify different macro-environmental factors that may affect business strategies, and to prize how different environmental factors may influence business performance now and in the future. The PESTEL Framework includes sestet types of important environmental influences political, economic, social, technical, environmental and legal. These factors should not be seen as independent factors. Factors such as technological advances may probably affect the social and economic conditions in different markets.Below, some characteristics in for each one environmental factor are listed, which may give business managers guidance to, which factors may be of magnificence to a companys strategy. The list is however far from complete, and it only gives managers some preliminary inspiration to, which factors may be of relevance for handling business strategies. Many factors, that are not included below, may have an heart and soul on business success, and each company must evaluate for themselves, which key drivers of swop leave alone potentially have strategic and competitive consequences.Political factors Stability of government Social policies (e. g. social welfare etc. ) affair regulations (e. g. the EU NAFTA) Tax policies Entry mode regulations Economic factors Disposable income of buyers Credit accessibility Unemployment rates care rates Inflation Social Factors Population demographics (e. g. aging population) Distribution of Wealth Changes in lifestyles and trends Educational levels technical factors New innovations and discoveries Pace of technological innovations and advances Pace of technological obsolescence New technological platforms (e. g. VHS and DVD) Environmental factors Environmental justification laws Waste disposal laws Energy consumption regulation Popular attitude towards the environment Legal factors oeuvre regulations Competiti ve regulations Health and safety regulations Product regulations The key for business managers is therefore to discover the main drivers of change that may affect business strategies, and to discover the factors most likely to influence the performance of the business. In conducting a PESTEL analysis, business managers may create strategies that take several macro-environmental factors into consideration, so that the strategy formulation process will be as sensitive to current and future environmental factors as possible.