PESTLE Analysis - The Simplest explanation ever

hello everyone and welcome to mr. simplifies tutorials in this video we are going to look at pestle analysis which is an important management framework now what is this management framework used for what is PESTEL analysis used for and obviously pestle d est le stands for something which we are going to look at and it actually is a tool of framework used to to analyze the external factors affecting various projects brands or businesses overall now it's important to understand that various internal and external factors can affect the functioning of a current project that you want to taken or a brand on the whole or you your entire business and a lot of these internal and external factors change all the time and it's important to stay on top of understanding these factors and understanding how they influence your business now SWOT analysis is another management tool another framework used to to understand the strengths weaknesses opportunities and threats corresponding to a project or a business and in terms of PESTEL analysis it links in quite well with SWOT analysis because the opportunities and the threats part of it links in quite well with pests of analysis because there are factors which are external to the business which come into play there we're going to look at a SWOT analysis in detail in another video so don't worry if you found that bit of explanation to be slightly confusing as I just mentioned the factors that we study under PESTEL analysis are out of control for the business they cannot be controlled by the business these are external factors like regulations and law and businesses can't control the government's control them so let's have a look at some of these factors and how these factors are categorized now what does pestle stand for pestle stands for p4 politically for economic s for social t for technological elf illegal and E for environmental now these are like the categories in which these external issues facing the business or the project are categorized under so because there are like six categories most of these external factors that affect businesses or projects will fall under any at least one of these categories if not multiple categories and over the course of these this video you will understand that in most situations a lot of these factors are interconnected so a certain factor can be political and technological or environmental at the same time because it's obvious to and it's it's obvious to understand easy to understand that politicians set laws you know whether its economic economical laws or legal regulations or environmental laws so it's all linked to one another but it's important to classify them and categorize them and understand how they impact your business so if we look at political factors to begin with that stands for p4 pestle these would be government tax policies regulations you know if there's an increase in in taxation in Indian City in the gum in the country overall that would affect the business obviously business regulation policies policies that affect governing businesses government laws on competition in the marketplace for instance if there is a sort of a monopoly in the in the marketplace that you're operating in and the government provides incentives newer organizations and cuts down the incentives provided to regular organizations like yourself that can have an effect on your business and that can be classified and their political influencing factors and now we look at economics now for instance if the the exchange rate has gone down or basically your currency your country's currency has devalued in the global financial markets that can be an economic factor affecting your organization if you obviously import/export etc or book your goods yet from from overseas the national GDP obviously has an impact on absolutely everything to do with businesses and everyday life and what if there is a reduction or an increase in public spending power that would definitely have an effect and these are like the economical factors that can affect your project or your business on the on the whole what about social factors now social factors could be a basic change in styles or choices of the population something that's that's that's very much in style in fashion at the moment can can this be phased out in no time whatsoever because consumer tastes change all the time and that can impact your project or your organization on the whole changing the population demographics now for instance if your target market if you're the segment of the market in the in in your job geographical location of operation is a particular ethnic group for instance and that ethnic group group has suddenly you know moved over to a different part of the world etc you know these sort of changes are social changes and that can affect your business community groups and pressure groups now there can be various pressure groups and community groups that can you know influence that can voice their opinion against or for your organization causing a change and becoming an influential factor in that way so these are sort of like the social factors and what about technological factors a sudden rapid technological progress or in a sudden innovation in technology can obviously have an impact because if everybody's moved on everybody is adopted different technological ways of doing certain things and you haven't then obviously you'd be left behind or if you're way ahead of the block and wasting or spending too much money on on technology whereas you know nobody else's and everybody else is looking for economical ways of doing things then obviously that's something that you'd be looking under but that would be categorized under technology now improvement in production technology something very commonly experienced by manufacturing and you know consumer goods companies data storage and protection technology is something that affects most businesses you know once they are larger than you know a small small scale or in a way once they're once they cross that small medium enterprise bracket I would say legal factors what can be legal factors these are like factors relating to wages or employment these could be taxation changes like company taxation policy changes these could be just changes in regulations relating to working practices in your industry in particular so various legal factors obviously you could see that these these factors tie in very well with the political factors that we saw to begin with and there is an evident link between all of these factors environmental or ethical factors as they're called sometimes as well now these often relate to corporate social responsibilities environment factors now obviously global warming and sustainability are like very hot topics in the modern day for good reason obviously the environment needs to be protected so your carbon emissions your comments footprint become very important factors and then if there are changes in environment regulations some of these changes can affect you directly so it's important to understand them want to study them important to understand how they're affecting your project or your business as mentioned previously there is a good link between pestle and sport but obviously since I haven't covered SWOT analysis in this channel yet I would do that and in the video that I produce about water now this is explaining what it is and the various factors that we look at when we consider studying SWOT analysis we will look at the link between pestle and SWOT okay hopefully that was a good introduction to PESTEL analysis and I hope you found this video useful as as the other in line with the other videos in the channel and I hope you find all of them very useful I wish to continue producing tutorial videos like these if there are any topics of interest that you want me to cover please let me know in the comment section thank you very much for your attention thank you very much for visiting this video if you visited this channel for the first time and please like this content please support this channel and subscribe and spread the word thank you very much good bye bye

Channel: Mister Simplify

Views: 446,592

Keywords: leadership, management, concepts, business, PESTLE, management framework, PESTEL, PEST analysis, political factors business, environmental factor business, legal factors in business, effect of politics on business

Id: Gv5fza6wHE4

Length: 10min 21sec (621 seconds)

Published: Sun Jun 04 2017