Companies use various methods to develop business strategies, one of those frameworks is the PESTEL analysis. It is a tool that helps organizations in gathering information on different macro-environmental factors that influence a company’s market reputation. You can also use it for anticipating market disturbances in order to minimize anomalies from causing harm externally. The PESTEL analysis of Jeri Caldwell provides sufficient details on how you can use the results of the inspection to your advantage.

PESTEL is a group of six forces that are Political, Economic, Social, Technological, Environmental, and Legal. All these factors affect the performance of a company externally. To learn about internal forces, you can use the SWOT analysis method. The combination of these two frameworks can guide your business plans and help you make the right decision. However, keep one thing in mind, these tools only provide situational information like what is happening in the market right now. You cannot completely rely on the information, especially if the person collecting is not related to the company.

Procedure to Conduct SWOT Analysis

It is an effective framework if used as a direction for your next marketing plan, but should never create a plan based on the analysis. Use your research, consult with your team, explore the tactics of other marketers, understand the methodologies of other organizations, and then create an ultimate plan. Let’s break down these six factors, and see what type of information you can add to each one of them.

Political & Economic factors

The political factors are related to the actions a government takes and how it influences the economy. It includes tax policy, labor law, trade restrictions, and political stability. Economic factors focus on inflation, wage rates, availability of credit, living costs, growth, and decline.

Social & Technological factors

Culture and trends are considered when we talk about social factors. It mainly focuses on understanding a consumer’s response to the changes that take place in demographic trends or social norms. It includes cultural aspects, the growth rate of population, age and gender distribution, and employment approaches.

Technological factors greatly influence a company’s performance. Any new technology introduced in the market affects the economy greatly. Not staying up to date can negatively influence a company’s operations. It includes automation, technological incentives, rate of change in tech, and R&D activity. These kind of things can also get asked in examination, each student should Prepare for Exams to get fabolus result.

Legal & Environmental factors

Any changes to rules and regulations associated with legislation can have a huge impact on employment. It involves resources, quotas, taxation, imports, and exports. The environmental factors are the changes in climate, which will help your company look for a change, for example, resources and supplies. It focuses on how the supply chain, ethical sourcing, emergencies, or a pandemic affects the company’s market position.