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PESTLE overview

Read this step where we provide an overview of the PESTLE analysis.
© Coventry University. CC BY-NC 4.0

PESTLE, also known as PESTEL, is an abbreviation for the Political, Economic, Socio-Cultural, Technological, Legal and Environmental factors.

These are factors posing opportunities and threats to an organisation, and within them there are several inherent variables, as shown in the image below:

Image showing how PESTLE factors influence the organisation. Political factors include government stability; taxation policy; foreign and domestic trade regulations; and social welfare policies. Economic factors include business cycles; GNP trends; interest rates; money supply; inflation; unemployment; disposable income. Sociocultural factors include population demographics; income distribution; social mobility; lifestyle changes; attitude to work and leisure; consumerism; and levels of education. Technological factors include government spending on research; government and industry focus on technological effort; new discoveries/developments; speed of technology diffusion and transfer; rates of obsolescence. Environmental factors include environment protection laws; waste disposal; energy consumption. Legal factors include competition law; employment law; health and safety; and product safety. (Adapted from Johnson, Scholes & Whittington, 2005)

Select the diagram to enlarge it

In the coming steps, we’ll focus on each aspect of this analytical framework for assessing the macroenvironment. Each step will be accompanied by an explainer video.

Your task

When we are considering factors that impact an organisation externally it is useful to truly understand significant movements and trends, sometimes known as ‘megatrends’. Johnson et al. (2017) defines them as:
…large-scale political, economic, social, technological, ecological or legal movements that are typically slow to form, but which influence many areas of activity, possibly over decades.
Research and share at least two megatrends in the comments area. Also consider under which aspect of the PESTLE framework they best fit.


Johnson, G., Scholes, K., & Whittington R. (2005). Exploring corporate strategy (7th ed.). Pearson Education.

Johnson, G., Whittington, R., Regner, P., Scholes, K., & Angwin, D. (2017). Exploring strategy: Text and cases (11th ed.). Pearson Education.

© Coventry University. CC BY-NC 4.0
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Managing Company Culture Whilst Responding to Environmental Challenges

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