PESTLE why is it important?

PESTLE is a term used in Marketing. It’s all to do with market analysis.

What does it stand for?

P = political situation
E = economic
S = socio-cultural
T = technological
L = legal
E = environmental

Is it relevant to you?

Some people will think that market analysis isn’t relevant for them, but consider the turmoil of the past few years then it is very relevant. The economic climate has been heavily impacted by Covid-19 and the Ukraine war leading to inflation and high interest rates, and a recession.

Then of course Brexit, which impacted the market on a political level (for a time additional paper work between NI and GB and the ramifications of that), economic (potentially new tariffs and new trade deals), socio-culturally (migrant workers becoming less prevalent for fruit picking) and legally (new legislation with its impacts on trade and travel).

You may not even think that you are analysing the market when you take a deep breath and work out how things that happen on the ground are going to impact your business. But you are!

Some events can be planned for (Brexit) some can not (Covid-19), but they do affect business, your business and you find ways around them, to embrace them, to succeed despite / because of them.

Pestle: A living document

Some people do a PESTLE analysis as part of a business plan and don’t look at it again. However, these analyses are a living and breathing document – they change as the world around your business changes. Each change can bring threats (lockdowns for example put huge strain on businesses, and not all survived) and opportunities (instead of distilling artisan gin turning to manufacturing hand sanitiser).

For some businesses it is more difficult to pivot than for others – if you are a hairdresser, then that has limited capabilities for pivoting; but if you had a range of bespoke clothes that you sold though ETSY, then pivoting to making face masks could have been a profitable change during Covid.

Understanding the world around your company will help uncover ways to succeed even in the most difficult of times.

[Originally issued 11/9/20; edited 19/3/24]

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