Strategy Survival Guide

Strategy Survival Guide Version 2.1
Prime Minister’s Strategy Unit
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Strategy Skills > Structuring the Thinking
PESTLE
> in practice
PESTLE analysis aims to identify and summarise environmental influences on an organisation or policy.
PEST analysis involves identifying the political, economic, socio-cultural and technological influences on an
organisation - providing a way of auditing the environmental influences that have impacted on an
organisation or policy in the past and how they might do so in future.
Increasingly when carrying out analysis of environmental or external influences, legal factors have been
separated out from political factors (due to increasing legal influences outside national political systems,
such as European and regional legislation). The increasing acknowledgement of the significance of
environmental factors has also led to Environment becoming a further general category, hence 'PESTLE
analysis’ becoming an increasingly used and recognised term, replacing the traditional 'PEST analysis’:
P – political
E – economic
S – socio-cultural
T – technological
L – legal
E – environmental
The following can be used as a checklist to consider and prompt analysis of the different influences. The
model can then be used to inform and guide further analysis.
1. Which of the environmental factors are affecting the organisation?
2. Which of these are the most important at the present time? In the next few years?
Political
• Taxation policy
• Local government / devolved administrations
Economic
• Business cycles
• GNP trends
• Interest rates
• Inflation
• Unemployment
• Disposable income
Socio-cultural
• Population demographics
Strategy Survival Guide – Strategy Skills
Page 104