What is PESTLE analysis in simple words?
Formerly known as PESTLE Analysis, PESTLE analysis is a framework or tool that marketers around the world commonly use to analyze and monitor numerous external and macro-environmental marketing forces that reflect any corporate organization.
The PEST analysis is a best-in-class tool for start-ups and those entering a foreign market. The tool is often used with two other business analytical tools called the SWOT Analysis and Porter’s Five Forces to understand the inner and outer forces that guide an organization. The collaboration of these three tools is at times known as PESTLE.
In this blog post, we will discuss Pestle analysis and will learn how to do a Pestle analysis via examples.
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6 Factors on Which PESTLE Analysis Depends
“P” stands for Political factors:
How a government intercedes in a particular organization or industry is a political factor. It refers to the influences of government policies on your company. Political factors include political stability or instability, trade, tax policies, trade constraints, etc.
“E” stands for the Economic factors:
Economic factors determine an organization’s financial condition or a particular industry. Since these factors play a crucial role in deciding the supply-demand models in the economy, it has a lasting effect on a company, whether direct or indirect. Economic factors include economic growth, inflation, currency, interest rates, and many more.
“S” stands for Social factors:
These factors help marketers to understand the needs of their customers better. It also emphasizes the local workforce and their sustainable working conditions. Social factors include population growth, distribution of income, attitudes towards lifestyle, and more.
“T” stands for Technological factors:
Technology has a crucial role in the health of every business organization since the inception of the industrial revolution. Technological innovations can have a favorable and unfavorable impact on industrial and market operations, and therefore, the analysis and monitoring of these factors were critical. These factors contribute significantly to specific decision-making scenarios, including whether it is an excellent decision to enter a particular industry or not. Technological factors include R&D, automation, technical awareness, etc.
“L” stands for Legal factors:
Companies today need to understand the legal premises for their efficient operation. While some of these factors can overlap with the political factors, the legal factors generally involve more specific laws and policies such as copyright laws, discrimination laws, etc.
“E” stands for Environmental factors:
Enterprises cannot fully wear away the related factors as with the increasing environmental awareness. In addition, carbon footprint targets, raw material scarcity, and emission targets have made the environmental factors even more crucial for the proper functioning of an organization. Environmental factors include environmental factors such as climate and weather, ecological compensation, etc.
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When to Use Pestle Analysis?
As discussed in the above section, Pestle analysis is the acronym for the six crucial external factors which may affect any business. To use the tool in the best possible way, all the six external factors discussed above must be critical. Pestle analysis is usually performed on big brands, including Apple, Uber, Coca-Cola, Adidas, etc.
Also, Pestle analysis can be performed on various food chains, and examples of Pestle analysis for a restaurant are also available on the internet. You can download these examples of a Pestle analysis pdf.
In this section, we will discuss the scenarios that would be most suitable for using the Pestle Analysis tool. So let’s begin.
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If you are launching your own business
The first scenario that is the most suitable to use the Pestle Analysis tool is if you plan to launch your new business. Whenever you start a new business, you must consider Pestle’s six highly vital forces, including political, economic, social. You cannot just start a legal enterprise without following the preordained political laws of your jurisdiction. If you are opening an eCommerce business, you need to follow the three factors: political, legal, and technological, and the rest of the factors you can ignore for sure. It can cost you a great deal to start a business without any idea of these forces. On the other hand, you would have an added advantage if you have a clear understanding of these factors in advance.
If you are facing issues with your business
There would be times when you have to deal with a lot of problems in your business. There can be both easy and challenging problems that you can either solve in minutes or hours, while others can make you stay awake all night. Most of us try to resolve things quickly sometimes, and that too without finding a solution for a longer term. Yes, that is quite normal, but it is not suitable for your business as it may bring consequences.
So, if you face problems in your business that are hard to resolve, you can use Pestle Analysis, as it will be the most effective way to deal with your business problems. Also, there will be times when you will find that solving one problem will reveal another one that is hidden underneath. But with Pestle analysis beforehand, you can predict possible problems that may come your way in the future. You can either avoid the problem altogether in most cases or can atleast minimize its impact on your business environment. Meanwhile, click here to learn more about the top 10 persuasive techniques.
If your analyst is working out the angles for your business
To improve employee communications and the organization’s working environment, many companies hire business analysts or experts that are good at solving internal and external problems. These guys hold expertise in solving problems and are the best at what they do. Also, the guys will always have numerous tools that will help them in solving specific problems related to the businesses. The best thing about such experts is that while analyzing specific problems, they can get their hands on results that can also be used to solve other problems.
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Why is Pestle Analysis an Excellent Methodology?
Well-organized Pestle analysis helps us plan the role of the market in its niche and that too in detail. Besides being effectively used to analyze a business as a whole, the Pestle Analysis example industry can also analyze individual projects. This will help you implement project-oriented changes to achieve your set goals and target.
The best and the most advantageous thing about the Pestle analysis is that it is very economical. We can say that with Pestle analysis, you will only be investing time and not money. And the basic things that are required to carry out the Pestle analysis are pen and paper.
Besides being one of the best and the most economic analysis tools available, the Pestle analysis has numerous other advantages, including threat awareness or alertness. If you are conducting Pestle analysis for your business, it will provide threat awareness or alertness whenever something is going in a way it shouldn’t. This is one of the main reasons Pestle analysis is so popular amongst various types of businesses and why the business owners want to carry out the analysis process to analyze their businesses. But first, go through various Pestle analysis examples available in this blog to learn the process.
If you use Pestle analysis to analyze your business efficiently and economically, you will surely benefit from this single analysis tool. Also, your business can exploit opportunities that your competitors who are not using the Pestle analysis example chart will surely miss.
Below are a few Pestle analysis examples that will help you learn to do the Pestle analysis.
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Best Pestle Analysis Examples You Should Know
Here, we will study some of the best Pestle analysis examples. If required, students can use these retail Pestle analysis examples for their projects and assignments and get good grades in academics. Also, students can prepare Pestle analysis student example strategic reports by using the examples discussed below.
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Pestle Analysis Examples Company: Uber
Now, we will understand more about the company and its offerings via a marketing Pestle Analysis example.
Here, we will talk about the political factors of the Pestle analysis example of Uber.
Uber has many controversies to overcome, as we have already discussed above. But one of the things that put Uber at risk is that the company has not clarified its rules & regulations. People have questions about the insurance policy of the company. For example, some of the users’ questions are that in case of an accident, what will the company do out of the following?
- hold the driver of the specific vehicle as accountable or,
- Uber will take the blame on itself for the accident.
Here, we will talk about the economic factor of the Pestle analysis example of Uber.
- Uber operates in a shared economy, which means that the company functions in an economy where physical and intellectual resources are shared.
- With the application, customers can easily connect to the drivers they want as per the locations they want to reach. Also, drivers can take them to the desired locations that the customers want. And Uber is a lot cheaper than any other local taxis that the customers can hire to reach the desired locations.
- Since its inception, Uber has seen a rapid growth rate, which has led to severe issues and problems in numerous countries because of the local market players in the taxi market. Some countries’ local taxi markets see unfair competition from Uber, which led to its services being prohibited and restricted in those countries.
- For the reasons listed above, numerous other companies are also under the authority’s eyes for the unfair competition that they give to the local taxi market. But, because Uber is a leading taxi service provider, it was the prime focus of this controversy.
- There are even people who are looking towards Uber with a positive approach as it brings new jobs. But they have difficulty deciding whether it is taking their job away or bringing in new opportunities.
- Besides lots of troubles and issues that the company is facing, one thing that makes it stand apart in the market is the level of popularity. The taxi market has always been full of opportunities, and Uber is one of the market players that has taken advantage of the market to the fullest. Uber just needs to keep doing its best, just like the way it is doing now.
Here, we will talk about the social factors of the Pestle analysis example of Uber.
- Uber taxi services are one of the best in the market because they are user-friendly and easily accessible. The app that the company offers to its users pro
- If you want to book an Uber ride at any time of the day, just place an order via the official mobile app. After a few minutes, you will get the confirmation of your ride along with the driver’s details and the OTP that will be used when starting the ride.
- The reason that people show gratitude to Uber is the affordable taxi services it offers to them. But with time and increase in popularity, the company has increased its fare charges, and people still prefer to take Uber due to the unmatched user experience that the company provides to its customers.
Here, we will talk about the technological factors of the Pestle analysis example of Uber.
- The reason why Uber is one of the fastest-growing taxi service providers around the world is that it has reaped many benefits through the technology directly and indirectly.
- Using the unmatched services and the company’s experience to the users, customers post positive views on numerous social media platforms that help the company grow fast. Also, the app that the company offers to its customers is one of the prime reasons behind the company’s success and justifies the position at which Uber is standing today in the taxi market.
- With the technology that Uber is using and the application for the front-end users, anybody can book a cab from where the service is available. The official app of Uber has been designed to give information to the customers, including estimated ride charges, drop-off location, traffic, and weather. Also, the app provides flexibility to the customers to such an extent that they can even pay their service charges via the app.
Here, we will talk about the legal factors of the Pestle analysis example of Uber.
In the above section, we have discussed how Uber has faced bans in many countries for different reasons. This has proved that the company needs to follow several laws, including technical usage laws, labor, and employee health and safety laws, and copyrights laws, to continue having a stable presence in the countries in which it is operating.
Here, we will talk about the environmental factors of the Pestle analysis example of Uber.
- Though various studies and use-cases have been analyzed, Uber’s impact on the environment is still not certain. Reports say that few officials have confirmed that the increase in Uber services increases fuel usage and traffic congestion in most countries.
- Also, several studies have even confirmed the same with respect to traffic congestion. And the reason behind this being that people have started using private Uber vehicles instead of taking public transport, increasing the number of vehicles on the road. Though studies have proved the point, analysts are yet to confirm such blame on the biggest taxi services providers in the market.
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Pestle Analysis Examples Company: Apple
Apple is one of the most popular brands across the globe, and it is renowned for its electronic devices, including smartphones, PCs, tablets, music players, etc. The best thing about Apple is that it manufactures quality products that are very expensive but reliable and last for years and decades. Although Apple is an expensive brand, people’s purchasing power for Apple products is increasing each day to add reliability and luxury to their lifestyle.
Now, we will understand more about the company and its offerings via an example of a Pestle analysis in an organization. Therefore, let us look at the marketing Pestle analysis example of Apple in the below paragraphs.
Here, we will talk about the political factors of the Pestle analysis example of Apple.
- To lower the manufacturing cost of all the products, Apple manufactures its products in China. This helps the company to make the products available to the consumers at an attractive price. Hence, there are good chances that any political issue or conflict between the US and China will certainly affect its operations. But, there is no way out as of now as an alternative to this will surely be expensive.
- On the other hand, the company is stable and powerful enough to deal with political pressure. We all know that the company is in a dominant position.
Here, we will talk about the economic factor of the Pestle analysis example of Apple.
- Apple knows that and has to keep in mind that there will be a huge impact on the manufacturing cost of its products in China will increase the labor costs any time in the future.
- Also, there can be a significant decrease in Apple’s market if there will be a decline in the income of the middle-class people. If the US dollar witnesses highs, then exchange rates will increase.
- So, it may help Apple to earn good profits in China and Europe.
Here, we will talk about the social factors of the Pestle analysis example manufacturing company Apple.
- Apple products are popular across the globe and are renowned for their quality and long-term durability, but the company still does not have a good presence in countries like Africa. Also, talking about where it all started, the people who have a low income or can not afford Apple products are against the brand in the US as it is way too expensive. This is the reason that why the appeal of Apple is not much in China due to ethical concerns.
- Apple also needs to make people aware of its features and the things it offers and needs to justify the prices that it keeps for its products as people feel that they are just expensive and not worth the money.
Here, we will talk about the technological factors of the Pestle analysis example of Apple.
- Brands like Google and Samsung take features and copy designs from Apple products and services, decreasing Apple products’ uniqueness as similar products are already available in the market. Also, most of the apps and services that Apple has designed for its products are also in the market that shows that there is nothing so unique about Apple.
- The launch of numerous smartphones from different brands and an increase in smartphone and tablet use will decrease the demand for Apple products in the coming years. Also, Apple devices will be less secure in high-tech surroundings, ultimately decreasing the Apple market in the future. Therefore, Apple must consider all these factors with respect to security upgrades and technology.
Here, we will talk about the legal factors of the Pestle analysis example of Apple.
- Apple has recently started a new and highly regulated service through Apple Pay.
- As a result, Apple may face certain regulations. There can also be increased supervision on the company by the government.
- Numerous reports have confirmed that Apple will soon enter the automobile industry and will deep dive into automobile manufacturing. Such a step from Apple will surely increase insurance, regulatory costs, and legal proceedings for Apple.
Here, we will talk about the environmental factors of the Pestle analysis example company Apple.
- The main issue with environmental factors is the disposal of Apple devices that are not working. Disposal of the lithium batteries cost high, which adds to the disposal cost.
- On the other hand, China is pretty much concerned about pollution and the environment. China has also announced that it will limit the use of greenhouse and fossil fuels in the near future. Also, China is planning to increase the electricity cost in the country. This may affect the manufacturing cost of Apple products as most of the Apple products are manufactured in China, and the increase or rise in any element will increase the total manufacturing cost of Apple products in the country.
Pestle Analysis Examples: Nike
Nike Corporation is an international brand that originated in the US. The company, besides manufacturing footwear and clothing, also deals in design, development, and providing premium services.
As Nike has a global presence, therefore, the political environment has a huge impact on Nike Therefore, the company needs to consider the taxation and manufacturing rules of a country to make a stable presence worldwide.
Nike has to focus on the economic conditions where it offers its products. Also, Nike can target the countries which have a stable economy, and these countries include IUS, UK, and others. Nike can get in touch with customers who have good purchasing power in such countries.
Nowadays, people are conscious about their fitness, and therefore they focus more upon playing sports to stay fit, and Nike plays an important role here. Nike regularly brings high-quality sports shoes and apparel to the market to fulfill consumer needs.
Nike, since its inception, has given importance to technology. The company also keeps a sharp eye on the technology that it manufactures. This helps the company to stand apart from the rest of the competition in the market.
Nike keeps an eye on the shoe designs and apparel copyrights that it manufactures and will continue with the same in the future.
Nowadays, the prime concern globally is the environment is the prime concern globally, and Nike being the leading brand, needs to come up with environment-friendly products.
Pestle Analysis Examples: Coca Cola
Coca-Cola is a leading soft drink producer who has a global presence worldwide. The company uses the best technology in manufacturing the drink and offers numerous products to its target audience worldwide.
Coca-Cola should follow all the rules specified in a country as its products are tested by FDA. If the company does not follow all the rules, countries may prevent it from continuing its operations.
Coca-Cola has a global presence and has a huge customer base worldwide. The company manufactures and sells its products in numerous countries. Recently, Coca-Cola has realized that people have started moving towards healthy drinks; therefore, it is moving in that direction.
Coca-Cola has now started focusing more on offering healthy products in the US. It has even started taking the same approach in Japan and China.
Coca-Cola can improve with technology and can make effective products in the future. Also, the technology will help the brand in manufacturing a large number of quality products.
The company has done well to safeguard all its business rights. It has the rights to all the products of the past and the future developed by a patented procedure.
Coca-Cola needs water accessibility to manufacture its products. The company cannot operate if they don’t have good water accessibility.
Pestle Analysis Examples: Adidas
Here, we will discuss the examples of Pestle of a renowned brand Adidas.
Adidas is a renowned brand that manufactures sport’s shoes and apparel. The firm originated in Germany, and its name is inspired by its founder Adolf Hassler.
Adidas is one of the firms that has faced a lot when it comes to risks and civil unrest. Also, the company even dealt with changes in the political policies which affected its operations in specific countries.
Until the year 2005, Adidas had to see numerous economic failures. And the profits and income of the company were affected by many economic factors, including inflation, per-capita income, unemployment, and taxation.
Adidas manufactures shoes and apparels designs that are trendy and are loved mostly by athletes and sport-loving people. Also, Adidas products are used by people of all ages, cultures, and religions.
Talking about technology, Adidas stays apart from its competitors as it uses its own innovative technology.
Adidas ensures that its manufacturing factories and production units do not produce any restricted goods or products.
Adidas should make sure to stay away from legal trouble in any country, which can impact its brand value.
In this blog post, we have talked about the Pestle analysis of 5 big brands in detail. We hope that all the information provided in these Pestle and SWOT analysis example was informative, and you can use the information at your best. Meanwhile, if you want to get overall guidance on how to write the character reference letter, then you can read out the whole blog here.
If you want a Pestle analysis example for banks or an example of Pestle analysis for Tesco, you can search the internet and can get them easily.
Pestle analysis examples of the fashion industry and Pestle analysis examples for a restaurant are also available on the internet.
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