MBA-VRIO/PESTLE

PESTLE: Political, Economic, Social, Technological, Environmental, Legal

The PESTLE method is a way to analyze the external factors that affect a company. Each category represents a different kind of threat or opportunity that might have an impact on the way a company does business.

Use the PESTLE method to write an analysis of the company you chose.

PESTLE Diagram

As you can see in the diagram, a circle in the center represents the firm. That circle is inside a square, the Strategic Group the firm belongs in. Both of these are within a larger circle, which represents the industry both operate in. Around that larger circle are six other circles that represent the Political, Economic, Sociocultural, Technological, Legal, and Ecological factors — threats or opportunities — that might affect the company, but also might affect the Strategic Group and the Industry the company operates in.

Political

What political factors might affect your company related to the actions or priorities of government or elected officials?

Economic

What economic factors related to the economy might affect your company?

Social

What social factors related to the demographic environment in which your company operates might affect your company?

Technological

What is the impact of new methods of doing things, such as producing products more efficiently, distributing them more quickly, or communicating about them in a more targeted fashion?

Legal

What are potential problems your company might face for violating laws or incurring liability for its actions?

Environmental

What is the impact of choices related to the physical environment in which your company operates? (The air or water near the company’s facility, or the impact of extracting raw materials the company needs.)