How do I do a PESTEL Analysis?

The PESTEL Model stands for Political, Economic, Social, Technological, Environmental, and Legal.

PESTEL Analysis – Look at your macro-environmental factors!

PESTEL Analysis is an examination of the macro environment and external factors to help us understand the context and pressures for a Product, Project, Business Area, or Organisation – e.g. including unemployment factors.
It helps us understand the situation our Product operates in, by describing “Factors”.
It involves investigating 6 areas – Political, Economic, Social, Technological, Environmental, and Legal – that make the acronym PESTEL.

Take PESTEL further – don’t just make lists!!

Don’t just explore the PESTEL headings to create your analysis – that is what everyone does, and leads to suboptimal analyses! We would advise taking it one step further, by prioritizing and then scoring the impact of each of your factors, in order to best inform your plans and keep your team aware of its operating environment.

See how the scoring works in this example:

Scoring the impact of your PESTEL factors informs your PESTEL product strategy

1. Brainstorm the FACTORS:
   1. Political
   2. Economic
   3. Social,
   4. Technological
   5. Environmental
   6. Legal
2. Prioritise:
   1. Organize the list of items you have made for each area with the most important at the top.
   2. Don’t spend too long at this stage.
   3. Just make rapid lists.
3. Focus on the most important:
   1. Take the top 6 items in each of the 6 lists.
   2. Score the impact: Low, Medium, or High.
4. Present it:
   1. Arrange the findings in a 1-side document format.
   2. Use a pestle analysis template
   3. Promote it, so that your team bears these factors in mind.

Other areas to check when you are brainstorming: Unemployment rates, social factors, interest rates, trade restrictions, carbon footprint, and disposable income.