PESTEL Analysis

By Melvin Crawford,2014-10-22 06:36
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PESTEL Analysis

    PESTEL Analysis

Political Economic

Social Environmental

Technological Legal

    PESTEL analysis should not be a ‘shopping list’, rather Key Drivers & how they work together

    Political Factors: Government policies, taxation changes, foreign trade regulations, political risk in foreign markets, changes in trade blocks (EU). Economic Factors: business cycles, interest rates, personal disposable income, exchange rates, unemployment rates, GDP trends. Socio-cultural Factors: population changes, income distribution,

    lifestyle changes, consumerism, changes in culture and fashion.

    Technological Factors: new discoveries and technology developments, ICT innovations, rates of obsolescence, increased spending on R&D. Environnmental (Green) Factors: environmental protection regulations,

    energy consumption, global warming, waste disposal and re-cycling.

    Legal Factors: competition laws, health and safety laws, employment laws, licensing laws.

Consider Pubs? What were they?

    ; 100 pubs closing every month in the UK (Camra 2009)

    ; 4 a week in the West Midlands (Express and Star)

    ; Companies like Whitbread who brewed for 300 years have left the

    industry and are moving into pub/accommodation market-they

    own Premier Inn.

A Brief PESTEL analysis : Brewing

    Political/Legal Economic

    Social/Environmental Technological

Scenario Planning

    The aim of scenario planning is to construct plausible views of different possible futures, based on key environmental influences and KEY drivers of change.

    Long term view 5 years plus

    Limited key factors

    High level of uncertainty

    Develop scenario ‘stories’ - That is, coherent and plausible descriptions of the environment that result from opposing outcomes Identify the impact of each scenario on the organisation and evaluate future strategies in the light of the anticipated scenarios. Scenario analysis is used in industries with long planning horizons for example, the oil industry or airlines.

Music Industry

    Consider implications for:


    Retail Outlets

    Record Labels

    Digital distributors

    ; What key drivers can you identify that will change the future

    structure of the music industry?

    ; What do you think are the implications of digital access to music &

    what are the future revenue streams?

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