A PESTEL analysis examines a company's external environment using the six criteria shown at the left. This analysis is often used in an international context--because a business model that works well in the United States might not translate to another country's business culture--but it can also be used domestically.
The analysis will give you a feel for the opportunities and threats facing your firm. It should also uncover trends to watch in the future. With this information, you can decide how your firm can be most competitive.
If you are doing an analysis within the United States, look for a city's tax policies and any incentives it may offer new businesses.
Outside the United States, possible political topics to explore include the stability of the country's government; the tax structure; trade regulations; and any trading agreements the country is involved in, such as the United States–Mexico–Canada Agreement (USMCA).
Search for articles related to political issues using the city or country name and pertinent key words (for example, "Brazil" and "trade tariffs"). Try these databases:
When examining the economic climate, look at interest rates, inflationary trends, unemployment figures, and current exchange rates as well as for long-term forecasts for the city's or country’s economy. Here are some sources to try:
For the sociocultural aspects of your analysis, look at demographics, the level of education and income, the dominant religion and its influence, and attitudes toward work and leisure time. Try this database:
Technological issues include intellectual property rights, government or industry funding for research, and the potential for disruptive technologies that might affect company operations. For information on these factors, try:
For the environmental aspects of your analysis, research local environmental protection laws, any regulations regarding energy consumption or waste management, and any local environmental issues. Try these databases:
Legal factors include laws pertaining to trademarks and copyrights, zoning regulations, and laws regarding monopolies and private property. Also consider health and safety laws. For information, try these resources:
