What is Pestel analysis ❓ how is it useful ❓

What is Pestel analysis ❓ how is it useful ❓

In a global or even national business environment, there are complex changes and increasingly competitive environments. Organizations and executives all face big challenges. The focus on strategic planning and analysis has become even more important. Especially the analysis of external factors that you cannot control. Tools like PESTEL Analysis are one of the key tools that businesses can take into account competition in a comprehensive macro environment. In this article, we will answer all your doubts. Let's go see.

PESTEL Analysis is a strategic marketing thinking framework used to assess the external environment of a business. By dividing opportunity and risk into 6 different factors, the word PESTLE has no meaning. It's just a mnemonic tool. which each letter means

- P : Political = Political factors

- E : Economic = economic factors

- S : Social = social factors

- T : Technological = Technology factor

- L : Legal = Legal factor

- E : Environmental = environmental factors

🔹Political Factors (P) Political factors

Political factors that affect the economy are factors that we need to pay great attention to. which has a significant effect on the organization or business which can have a positive effect or impact on the organization or business. For example:

· The government will have important policies. How to stimulate the economy? positively or negatively affect the business

· Government policies showing foreign relations that may contribute to improving the economy.

· Government stability This is a matter that both domestic and foreign investors attach great importance to. Do you have frequent political problems? Does the government have enough votes in the House of Commons? There has been a conflict or disagreement among the people. which can lead to protests within the country As a result, foreign investors and domestic businessmen do not dare to invest.

· Tax policy or tax benefits In government-sponsored businesses, they may receive more tax reductions than other businesses.

· Participation in FTAs, either RCEP or CPTPP, gives businesses a tax advantage on exports or as a disadvantage from reducing tariffs on goods that countries in the FTA come to the domestic market.

🔹Economic Factors (E) Economic Factors

Economic factors are one of the most important variables when analyzing a company. And there are many things in the economy that we should pay attention to. for example

· Is the domestic GDP figure positive or negative? each quarter

· Is the vacancy rate increasing or decreasing?

· How is the interest rate affecting the industry we are interested in?

· Domestic debt, including NPL numbers, if more people may spend less

· Weak or strong baht, which affects exports or imports.

· Costs such as minimum labor, transportation costs, raw material costs

🔹Social Factors (S) Social Factors

is an analysis of living conditions Population structure, culture, traditions of the people of the country which these factors greatly affect business or investment such as

· Shopping behavior for each gender, age range, region is different.

· The increase in the elderly population has increased the market for elderly care businesses.

· Birth rate, which affects some businesses such as baby products Kindergarten and Elementary School

· Health care At present, there is a tendency for people to maintain more health. The food safety business is likely to grow at a high rate.

· Professional outlook and attitude People tend to learn more and more. Labor jobs may require more migrant workers or switch to robots instead.

· How is the lifestyle, lifestyle, each society or each country is different? What are the trends that society is interested in?

🔹Technology Factors (T) Technology Factors

Technology factors affecting the market and business management can be divided into 3 main topics:

1. New ways of producing goods and services

2. New ways of distributing goods and services

3. New ways of communicating with target markets

In addition, an example of an analysis of existing technologies and new technologies. that has been developed to affect the business or not Can the technology be utilized to make our company more accessible to customers or not to reduce production costs? (Will it be disrupted or will be disrupted)

The development of 5G networks has led to the development of new systems. in the supply chain that can reduce the process Reduce time and cost of business.

· Steaming systems such as Youtube or Netflix have significantly affected the content industry such as television.

· Robot or Robot to be used in the production line

· Electric cars use battery power. Good results create new business. old industry may not live

🔹Environment Factors (E) Environmental Factors

This factor has been very important in the past 15 years, especially the problem of global warming. Reducing the use of plastic bags Some countries have enacted carbon credit laws. Selling a new car requires a carbon credit. This makes cars that use oil have a lot of problems, especially those sold in European countries. As an organization or doing business, this is the trend of the world and consumers are starting to understand and care more and more.

🔹Legal Factors (L) Legal Factors

What are the legal factors or are there any restrictions? To have a negative or positive effect on the organization or not?

· Minimum wage

· Labor Law

· Foreign labor law

· Consumer protection laws such as the FDA or TIS.

· Tax law

· Laws related to advertising, such as new laws that have been released recently include Do not advertise alcoholic beverages online.

🔹Ethical Factors (E) Ethical Factors

Is a new factor of PESTEL by adding an E to cause a PESTELE or STEEPLE which Ethical Factors (E) ethical factors relating to business ethics about management policies and business practices and social responsibility In addition to doing profitable business and sales Businesses must also meet good legal and ethical standards. Doing business is not about profit and loss only. especially fair trade Non-child labor and non-slavery, and businesses should be attentive and responsible for the needs of society, or in English, corporate social responsibility (CSR).

🔹 Benefits of Pestel analysis

PESTEL Analysis is an excellent tool for analyzing external factors and macroeconomic conditions. which was the first tool used in business analysis in order to use the information obtained in other strategies

The pestel analysis, or pestele, is an excellent application and tool to help determine the external factor of SWOT, the so-called opportunity and threat, and when used in conjunction with the Five Force Model, the external factor analysis is more complete. climb

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