The big idea

PESTLE analysis is a mechanism for scanning the external environment, or big picture, in which the organisation operates. It has grown in popularity over the last ten years and goes under a variety of acronyms – PEST, STEP, STEEP, STEEPLE, PESTEL. Alongside a SWOT (also included in this stage of the toolkit) the PESTLE is probably one of the most commonly used tools as part of the strategic planning process. It has become so commonplace that its roots are not entirely clear. The earliest mention seems to have come from Aguilar (1967) who discussed ETPS – Economic, Technical, Political and Social factors.

Purpose

PESTLE stands for – Political, Economic, Sociological, Technological, Legal and Environmental factors. It is a framework for auditing a business’ environmental influences, both current and future, to support decision making and strategic planning. A PESTLE analysis can be a useful tool to find out where a business, project or programme sits in the context of what is happening outside and therefore likely to influence what is happening inside.

The Tool

The PESTLE framework provides you with a series of headings and prompts that can be used to assess your environment. It encourages you to think about the likely impact of the various factors on your business. You can do it on your own or with a group and the initial brainstorming can be done relatively quickly. It is something you can then add to over time.