PESTEL analysis

(noun)

The PEST analysis is a political, economic, social, and technological analysis that describes the framework of macro-environmental factors used in the environmental scanning component of strategic management. Some analysts added legal and rearranged the mnemonic to SLEPT; inserting environmental factors expanded it to PESTEL or PESTLE, which is popular in the United Kingdom.

Related Terms

Examples of PESTEL analysis in the following topics:

  • Scanning and Analysis

    • One approach is the PEST analysis.
    • Of the four categories explored in the PEST analysis, the company has the least control over economic factors.
    • Two more factors, the environmental and legal factor, are defined within the PESTEL analysis (or PESTLE analysis).
    • The segmentation of the macro environment according to the six presented factors of the PESTEL analysis is the starting point of the global environmental analysis.
    • The six environmental factors of the PESTEL analysis are the following:

  • Qualitative and Quantitative Analysis

  • Conducting a Situational Analysis

    • The situation analysis consists of several methods of analysis: The 5Cs, SWOT and Porter's five forces analyses.
    • Customer analysis can be vast and complicated.
    • An analysis on the climate is also known as the PEST analysis.
    • Porter five forces analysis is a framework for industry analysis and business strategy development.
    • A SWOT analysis can be a useful tool in conducting a situational analysis.

  • Analyzing Data

    • In statistical applications, some people divide data analysis into descriptive statistics, exploratory data analysis (EDA), and confirmatory data analysis (CDA).
    • All are varieties of data analysis.
    • Types of data analysis outputs: heat map, bar plots, scatter plots.
    • Researchers can set up a debriefing meeting to review the analysis.
    • Summarize the characteristics of data preparation and methodology of data analysis

  • Business Analysis

    • The first step in the business analysis process is to examine the projected demand for the product.
    • A complete cost appraisal is also necessary as part of the business analysis.
    • Based on these costs, the business analysis stage will estimate the likely selling price.
    • Financial ratio analysis allows an observer to put the data provided by a company in context.
    • Demonstrate knowledge of the components included in the business analysis stage of product development

  • Marginal Analysis

    • Pricing decisions tend to heavily involve analysis regarding marginal contributions to revenues and costs.
    • Pricing decisions tend to heavily involve analysis regarding marginal contributions to revenues and costs.
    • In the marginal analysis of pricing decisions, if marginal revenue is greater than marginal cost at some level of output, marginal profit is positive and thus a greater quantity should be produced.
    • This series of cost curves shows the implementation of profit maximization using marginal analysis.
    • Identify the characteristics of a marginal price analysis relative to pricing decision making

  • Break-Even Analysis

    • In the linear Cost-Volume-Profit Analysis model, the break-even point - in terms of Unit Sales (X) - can be directly computed in terms of Total Revenue (TR) and Total Costs (TC) as: where TFC is Total Fixed Costs, P is Unit Sale Price, and V is Unit Variable Cost.
    • In terms of pricing decisions, break-even analysis can give a company a benchmark quantity of goods to be sold.
    • Some limitations of break-even analysis include:
    • It is only a supply side (i.e. costs only) analysis, as it tells you nothing about what sales are actually likely to be for the product at these various prices.

  • Plan the Research Design

    • This process is guided by discussions with management and industry experts , case studies and simulations, analysis of secondary data, qualitative research, and pragmatic considerations.
    • Secondary data analysis is one of the steps involved in formulating a Research Design

  • Competitive Intelligence

    • Competitive Intelligence (CI) is a hybrid process of marketing research and strategic analysis that can give companies a competitive advantage.
    • Although the term CI is also considered synonymous with competitor analysis, competitive intelligence extends beyond analyzing competitors.
    • In essence, CI is a hybrid process of marketing research and strategic analysis that ultimately seeks to provide companies and their products with a competitive advantage in the marketplace.

  • Competition

    • Companies must conduct competitive analysis to identify their competition accurately, and must avoid defining the competition too narrowly.
    • Competitive analysis focuses on opportunities and threats that may occur because of actual or potential competitive changes in strategy.
    • Competitive analysis starts with identifying current and potential competitors.
    • It is essential that the marketer begin the analysis by answering the following question: "What criteria can be used to identify a relevant set of competitors?