PESTEL

This chapter outlines a common framework for assessing the macroenvironment. The acronym PESTEL is often used to describe the political, economic, sociocultural, technological, environmental, and legal components of the macro-environment. PESTEL is a framework tool that provides a guideline for marketers to be comprehensive when assessing macro-environmental forces.

Critical Thinking Questions

  1. How would you approach this issue if you were the manager in charge of sourcing raw materials for LEGO? How would PESTEL analysis inform your actions?
  2. What PESTEL challenges is LEGO trying to address by changing the raw materials used in its products?
  3. Explain what favorable PESTEL factors support LEGO's efforts.
  1. What makes up a firm's external macro environment, and what tools do strategists use to understand it?

The external environment of a firm is composed of two primary layers: the macro environment and the micro environment. The macro environment includes facts and situations that a firm must be aware of but cannot always influence. The macro environment is analyzed using the PESTEL analytical tool that considers a firm's political and legal aspects, economic indicators, sociocultural trends, demographic facts, technological changes, and environmental aspects.