In this activity, you will conduct a PESTLE analysis — (an initialism for "Political, Economic, Social, Technological, Legal, Environmental") and prepare a report on your findings.
Mod 4 Activity: Conduct an Environmental Scan (PESTLE analysis)
InstructionsLinks to an external site.
In this activity, you will conduct a PESTLE analysis — (an initialism for "Political, Economic, Social, Technological, Legal, Environmental") and prepare a report on your findings.
A PESTLE analysis--also known as PESTEL (reverse ordering of last two dimensions), or PEST (omitting last two)– is a marketing tool often used when a company wants to launch a new product or enter into a new market. To be successful, the firm must have broad understanding of relevant factors in its operating environment and how these may impact its new initiative. A PESTLE also illuminates industry trends, risks, and opportunities.
1. Please read this short webpageLinks to an external site. for an overview of how to conduct a PESTLE analysis. You may also want to review company and industry case analyses on this pageLinks to an external site.. https://pestleanalysis.com/category/pest-analysis/examples/
2. For your chosen firm (ideally your applied project firm), conduct research to understand each of the six dimensions (see below). Focus on the elements that relate most to your case.
Data sources might include:
- the company's annual report (especially the "RISKS" section);
- ASU's PASSPORT database; https://www-portal-euromonitor-com.ezproxy1.lib.asu.edu/magazine/homemain
- resources outlined in this marketing course library guide;
- trend reports, such as the World Economic Forum's reports on Global Risks, Cybersecurity, and Artificial Intelligence; and
https://www3.weforum.org/docs/WEF_The_Global_Risks_Report_2022.pdf
https://www3.weforum.org/docs/WEF_Global_Cybersecurity_Outlook_2022.pdf
https://www3.weforum.org/docs/WEF_Positive_AI_Economic_Futures_2021.pdf
- foresight reports by the European Union and National Intelligence Council.
https://www.dni.gov/index.php/gt2040-home/scenarios-for-2040
You can also do a Google search to find information about your company's industry, risks, and opportunities, and to see if a PESTLE analysis has been done for your company already. CAUTION: Do not assume that what you find is still relevant (see CAVEATS section below). You'll still need to research current data, relevant factors, and emerging contexts (e.g., COVID-19, or Market Chaos and Cuts in Federal Aid in 2025, etc).
3. Write at least a paragraph (WITH ITS CORRESPONDING LABEL) for each dimension. If a dimension is not relevant, write a couple of sentences describing what data you looked at and how you came to the conclusion it was not relevant.
Organize your paper as follows
1. Purpose of the analysis: 2-3 sentences describing why the insights gleaned from this analysis will be helpful to the organization. Frame it in terms of how this new understanding will help to solve the problem you are addressing in your applied project, or how the analysis will increase the likelihood of success for leveraging the opportunity you want to explore.
2. PESTLE dimensions: Write 1 paragraph for each of the following aspects describing the relevant data you found. Please be sure to include your data sources and cite appropriately for each dimension. Label each category with subheadings as below:
Political factors: What existing or potential external conflicts, interests, and power might impact the firm? What government interventions in the economy should it be aware of? Examples of relevant factors include: a) government policies, leadership, and change; b) foreign trade policies; c) political (in)stability and internal political issues and trends; d) tax policy; e) regulation and deregulation trends; and f) corruption levelsLinks to an external site.. https://www.transparency.org/en/cpi/2024
Economic factors: current and projected economic growth; inflation and interest rates; job growth and unemployment; labor costs; impact of globalization; disposable income of consumers and businesses; likely changes in the economic environment.
Social factors: demographics (age, gender, race, family size); consumer attitudes, opinions, and buying patterns; population growth rate and employment patterns; socio-cultural changes; ethnic and religious trends; living standards; levels of social cohesion/social polarization.
Technological factors: e.g., new ways of producing goods and services; new ways of distributing goods and services; and new ways of communicating with target markets.
Environmental factors: availability or scarcity of raw materials; pollution targets; doing business as an ethical and sustainable company; carbon footprint targets.
Legal factors: health and safety regulations; equal opportunity laws; advertising standards; consumer rights and laws; product labeling and product safety.
Historic factors: While not typically included in management analyses, it could be helpful to consider historical factors that influenced the current operating context. Two examples:
- History of policing in the United StatesLinks to an external site.
- History of public education in the United StatesLinks to an external site.
3. Analysis: What does all this information mean? How does it relate to the problem you are trying to solve, or the opportunity you are exploring? This paragraph needs to be fully developed.
4. Caveats: Acknowledge the limitations of your analysis. These might include: there could be relevant information that did not show up in your search; conditions might change, making the information and/or factors you identified inaccurate or irrelevant; your analysis was based on assumptions (list 2-3) which may not be accurate; and data came from external sources (you didn't collect it yourself), so you are relying on accuracy of those sources.
5. Key Takeaway: What are one to two main ideas you want the reader to take away from your analytical insights?