What Do You Mean By PESTEL Analysis?
What Do You Mean By PESTEL Analysis?
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Amruta
PESTEL is an analysis tool used by marketers to analyse the macro-environmental factors of an organization.
PESTEL stands for Political, Economic, Social, Technological, Environmental and Legal.
1. Political Factors: It takes into consideration government intervention that affect the activities of an organization. For example new tax policy, labour law, FDI laws, etc.
2. Economic Factors: Economic factors may include the inflation rate, growth rate of economy, demand and supply factors in an economy etc. These factors affect an organization’s profitability immensely.
3. Social Factors: This factor is all about people. Like the age distribution of population, lifestyle, attitudes, etc. These factors help the marketers understand consumer behavior towards a particular product or service.
4. Technological Factors: Impact of technology on business is explained by technological factors.
5. Environmental Factors: These factors are to take care of the organization’s carbon foot print and to make sure organization is producing environmentally sustainable products.
6. Legal Factors: Legal factors include consumer rights, health and safety, advertising standards, etc.