What is PESTLE Analysis?

PESTLE analysis is a management technique that is used to assess the events or influences from outside of a business, and the effects they may have on the performance of a company. It is one of the many management tools utilised to help understand the market position and company strengths.

PESTLE analysis covers the areas of Political, Economic, Social, Technology, Legal and Environmental.

Here is an example of how it has been used by niche manufacturing company Excell Metal Spinning:

P – political

Excell Metal Spinning Ltd. is subject to a range of political factors that all have an impact on the business. For example, the UK government can impose taxations or implement measures to reduce unemployment. There are also other political factors which could result in an increase of raw material costs which could affect the whole of the metal industry.

E – environmental

Excell Metal Spinning are in a highly competitive and niche industry. Luckily problem solving has helped to create favourable turnover, profits and profit margins to help boost sales. Excell Metal Spinning have also recently set up to trade in the European markets where demand is higher.

S – social

Social Factors have had an impact on how well Excell Metal Spinning are performing as a business. Excell have improved their communication with existing and potential customers through various methods of communication. These methods include blog articles, case studies and being active across a few social media platforms.

T – technology

To improve communication with customers, Excell Metal Spinning have invested in new IT. Brand new machinery has also helped to increase their production capacity. This ensures that they can continue to maintain a very reputable status for high quality and high service.

 L – legal

Legal factors such as copyright, patent laws, trademark, tax, employment health and safety, claims, product safety, and a certification as a Private Ltd. company can all affect the Excell Metal Spinning Business. Failing to comply with specific laws can result in big fines or imprisonment of personnel.

E – environmental

Reducing their carbon footprint is important for Excell Metal Spinning. They’re constantly looking for new ways in which they could improve their business to make it more environmentally friendly. Metal Spinning is considered to be an effective form of craft within the metal industry as it provides less wastage on materials.

Have you carried out or seen a PESTLE analysis for your company or employer? Tell us in the comments.