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How to do a PESTEL analysis ?

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this is a course (in a few slides) to give you the essence of the PESTE or PESTEL analysis. This method is useful for any market research.

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How to do a PESTEL analysis ?

  1. 1. PESTEL: Analysis of the influence of external factors 1
  2. 2.  What are the factors that influence my market positively or negatively?  What are the consequences and strategic choices, given these influences?  How can I highlight these influences concerning my resources and skills? Influencing factors 1
  3. 3. The influence factors "PESTE" (macro): Politico-legal Economic Sociological Technological « Ecological » Defining a market 1
  4. 4. The demography: essential for the international development of the company Example: Nokia's conquest of the Chinese market is essential to counter Asian competitors PESTE analysis, what questions? 1
  5. 5. The technology: which countries will provide technological leadership in the next ten years? Technology requires considerable and sustainable R&D efforts requiring partnerships in specific sectors to control costs. PESTE analysis, what questions? 1
  6. 6. The legal and regulatory dimension: the construction of Europe and the formation of a free trade zone (for example, ALNEA) have significantly changed relations between companies and States. PESTE analysis, what questions? 1
  7. 7. The ecological dimension: the ecological concern is quite recent and reflects a desire on the part of the company's various partners to take responsibility together to develop their activities sustainably. PESTE analysis, what questions? 1
  8. 8. Culture and ethics: this dimension has become very important in recent years. Can a company's policy be global? Example 1: If you were to develop a chain of restaurants in Lebanon, would you sell wine? PESTE analysis, what questions? 1
  9. 9. Culture and ethics Example 2: Mac Donald's in India, Halal in Belgium PESTE analysis, what questions? 1
  10. 10. The sociological dimension: it concerns the organisation of work in the company and the working conditions of employees. PESTE analysis, what questions? 1
  11. 11. The economic dimension: it concerns the organisation of work in the company and the working conditions of employees. It is mainly characterised nowadays by the globalisation of markets. The WTO was created to extend the scope of free trade to new areas through the opening of the negotiations, and it must ensure that these trade flows are consistent. PESTE analysis, what questions? 1
  12. 12. Political: this dimension refers to the national and international political context that sometimes has a positive or negative impact on trade. Example : 11 septembre 2001. PESTE analysis, what questions? 1
  13. 13. • In the context of an external diagnosis, the influence of these various environments will be synthesised with the "PESTE" analysis tool, thus materialising the impact that exogenous factors can have on a market. • The analysis can cover a country, a geographical area or even the whole world. Scope of the PESTE analysis 1 PESTE Political environment Economic environment Social environment Technological environment Ecological environment
  14. 14. • What would the PESTE analysis of Mac Donald's restaurant be? PESTE exercise 1
  15. 15. Corrected PESTE McDonald's 1 PESTE Political Environment Anti-Americanism Anti-imperialism Alter-globalism terrorism Economic environment Globalisation of consumer habits Development of fast food restaurants Image of the Modern World Social Environment Temporary staff (CDD) Taylorism Working conditions, conflicts Cultural diversity in food Technological environment Mad cow OGM Ecological environment Health, obesity unhealthy eating habits Waste recycling Waste of paper and cardboard
  16. 16. 1. research successively in each of the environments the trends that could influence the company's activity 2. globalise the analysis of all environments to apply the evolution factors to a specific sector or country PESTE analysis 3 objectives 1
  17. 17. 3. starting from a problem (technology, marketing, skills, markets, and so on...) and using the filter of each environment to propose the most relevant significant evolutions. PESTE analysis 3 objectives 1