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.
Glossary
- demographics
- Part of PESTEL that includes facts about the income, education, age, and ethnic and racial composition of a population.
- economic factors
- PESTEL category that includes facts (such as unemployment rates, interest rates, and commodity prices) about the state of the local, national, or global economy.
- environmental factors
- PESTEL category that examines a firm's external situation with respect to the natural environment, including pollution, natural resource availability and preservation, and alternative energy.
- external environment
- The aspects of the world at large and of a firm's industry that can impact its operations.
- legal factors
- In PESTEL, the laws impacting business, such as those governing contracts and intellectual property rights and illegal activities, such as online piracy.
- macro environment
- The outermost layer of elements in a firm's external environment that can impact a business but are generally beyond the firm's direct control, such as the economy and political activity.
- PESTEL
- A strategic analysis tool that examines several distinct categories in the macro environment: political, economic, sociocultural, technological, environmental, and legal.
- political factors
- PESTEL factor that identifies political activities in the macro environment that may be relevant to a firm's operations.
- sociocultural factors
- PESTEL category that identifies trends, facts, and changes in society's composition, tastes, and behaviors, including demographics.
- technological factors
- PESTEL category that includes factors such as the Internet, social media, automation, and other innovations that impact how businesses compete or how they manufacture, market, or sell their goods or services.