Analysing future business trends with the PESTLE framework
It is important to understand the wider context of the sector in which you operate, because these trends and changes will affect your business and your brand. The ‘PESTLE’ framework is a useful tool to help you carry out market analysis.
PESTLE is a mnemonic for factors that drive and shape market trends and consumer behaviour. The framework covers:
Political factors – Government changes that will affect trading – eg taxation & duty, grant funding, stability, international trade policy, environmental policy
Environmental factors – The impact of environmental change – eg materials availability, flood risk, water shortage, carbon footprint, pollution
Social factors – Changes in the way society is behaving that influence your customer’s attitudes - eg changing household sizes, the rise of social media, changing attitudes to sexuality, adoption of greener lifestyles
Technological factors – How tech innovation will impact the market and your business
Legal factors – Changes in legislation that will impact your business - eg Living/minimum wage laws, toxic materials legislation, labelling laws
Economic factors – Major economic drivers that affect trading, from local factors such as employment costs that affect margin and retail selling price, to national economic stability forecasts and international trading agreements.
Use your experience and desk research to identify the three major sustainability and ethical issues for each PESTLE factor that will impact your business in the next five years. Feel free to share your thoughts in the comments below.
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