How to do a PESTLE Analysis?

Conducting a PESTLE Analysis involves some steps which we have mentioned below:

Identify the scope of the research. It should cover the present and the future scenarios. It should apply to the areas of the business world where the particular organization operates.
Form a good team and assign responsibilities accordingly. Involving diverse people helps in collecting content-rich data.
Identify appropriate sources of information. These may include people seeking professional help regarding an issue or a change/update in current policy.
Gather and assemble the information. Better create a template as the basis for recording the information.
Analyzing the collected information is a significant step.
Create an order of the issues to be addressed. Try to resolve the issue, that can create a big impact, at the earliest.
Identify the business-specific options to address the issues.
Create a well-informing document for all the stakeholders
Disseminate and discuss the findings with stakeholders and decision-makers
Decide on the actions to be taken and trends that need to be monitored on an ongoing basis

To be effective, organizations must perform PESTLE analysis on an ongoing or regular basis. Organizations that do so enjoy a competitive advantage as they spot trends before others.

What is a PESTLE Analysis used for?

A PESTLE analysis is often used as a broad fact-finding activity. It helps an organization establish the external factors that could impact decisions made inside the organization. By understanding the impact these external factors can have on an organization, it becomes handy for organizations to plan better. They can form strategies to minimize the threats and maximize opportunities for themselves.

Uses of PESTLE Analysis

A PESTLE analysis is an appropriate framework that fulfills these purposes. Apart from that, it also helps organizations in a range of business planning situations. These include:

1. Strategic business planning

A PESTLE analysis report is a useful document to have by your side when starting a business planning process. It provides the senior management team with loads of contextual information about the company like the direction in which the business is heading, brand positioning, growth targets, and the areas of concern that may lead to a decline in growth and productivity.

2. Workforce Planning

Workforce planning is a business process that aligns business and people strategies. A PESTLE analysis helps businesses to identify disruptive changes to business models that may have a profound impact on the future employment landscape. Organizations are facing huge changes in their workforce from increased skills gaps, the creation of job roles that did not exist 10 years ago like the IT department, and job reductions or displacement.

3. Marketing Planning

As PESTLE analysis brings a lot of information on external factors, it also brings crucial market insights. So, it can help prioritize business activities to accomplish specific marketing objectives within a set timeframe.

Also Read | Marketing Analytics tools.

4. Product development

As mentioned above, a PESTLE analysis also has crucial market insights that tell about the response from customers about a product or service. This helps businesses to decide on whether to enter or leave a route, modify an existing product, and when and what to launch as a new product.

5. Organizational Change

A PESTLE analysis is a powerful tool for understanding the context for change, and focusing on the areas to make that change successful. In this situation, PESTLE analysis works best with a SWOT analysis. This helps an organization to identify the potential opportunities and threats around labor changes, for example, skill shortage and workforce capabilities.