CIMA BA1 Syllabus A. Macroeconomic And Institutional Context Of Business - PESTEL Analysis - Notes ^{5 / 5}

PESTEL Analysis

PESTEL is useful tool for analysing opportunities and threats in the external environment of a business.

PESTEL covers six areas that would often be analysed before key decisions are made

eg whether to locate in a new market.

1. Political

   Tax policy; Foreign trade regs; Government stability

2. Economic

   Business cycles; GNP trend; Interest rates; Money supply; Inflation; Unemployment; Disposable Income

3. Sociocultural

   Demographics; Income distribution; Social mobility; Lifestyles; Consumerism; Education levels

4. Technological

   Research spending; Government focus; New discoveries; Obsolescence rates

5. Ecological

   Environmental protection laws; Using up of raw materials; cutting edge e.g. genetically modified goods

6. Legal

   Monopoly laws; Employment law