Developing a strategy requires carrying out a business diagnosis by way of analysis that covers many angles. In the preamble, it is a question of analyzing the internal components, as well as the foreign variables. It is in this phase that the PESTEL model is applied by providing an analytical framework. Hence the objective is to assess the external causes on the company studied.
How to define the Pestel analysis?
The Pestel analysis, which can also be found under the name of
Pest, gives the possibility of monitoring and verifying all the dangers and opportunities that a company may face in
the market. The specificity of this approach is its complete vision of the
business context. The latter sheds light on six major players who make up
its acronym, in particular:
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Politics ;
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Economic ;
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Technological;
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Ecological;
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Sociocultural;
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Legal.
Understanding and anticipating
the macroeconomic context is essential to guarantee
the sustainability of the company. This involves the use of a Pestel
analysis. This analysis model is a strategic way that offers any business
to determine the details that can influence the activity and its progress.
Pestel analysis helps to
understand how the market works. By carefully monitoring all the risks and
opportunities that affect the company's activity and the market, the company is
able to project itself into the development of its environment, but also it
allows to guarantee the continuity of its activity. .
What is the point of a Pestel analysis?
As mentioned in Part 1, the main purpose of a Pestel analysis is
to pinpoint and identify the
details that summarize how
the market works . This allows any company to have the opportunity to
identify any possible beneficial or harmful impact on the progress of its
activity.
While all the elements that
summarize this Pestel analysis are well mentioned, the way a company perceives
these indicators differs from one company to another. Indeed, if we take
the example of an avocado, it is normal that this one does not select more the
same factors than a farmer. In such a case, the lawyer will surely move
towards political and legal factors, although a farmer gives more importance to
technological and environmental developments.
In the same vein, a company with an activity linked to large loans
gives more value to economic factors, since it pays particular attention to the
variation in interest rates. However, despite the specific guidance, it is
still essential to pay attention to the
comprehensive approach and analyze all the elements.
The intervention of the Pestel
matrix must be effective, in a wide field. In addition, it is preferable
to classify all the information according to the types of impact and the
relevance of their influence for society.
It is possible to notice the
presence of tools such as Mind Mapping or post-it notes which can be of optimal
use for this exercise. In addition, you should know that a regular update
must be considered by the manager and his team of the Pestel analysis. But
also an annual check. However, the intervention of a few internal or
external disruptive elements may require a new analysis.