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    PESTLE analysisSyed Ferhat Anwar

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    What is it?

    Its a way of working out what is going on outthere so you can then respond to it.

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    Origin!

    Francis Aguilar is referred to as the originator ofthis tool.

    He talked about PEST Political, Economic,Social, and Technological as the fourimportant factors for Scanning the Business

    Environment. Later Legal and Environmental factors were also

    added by some analysts and thus evolved theterm PESTLE Analysis.

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    Use!

    PESTLE Analysis is used to examine the current andfuture state of the industry/market an

    organization/industry belongs/may belong to. This helps in the strategic planning and gaining the

    competitive edge over the others in that market.

    Importance of the factors varies depending on the nature

    of the industry and company. For example environmental factors are more important to

    tourism sector where as economic and political factors are moreimportant for the Banking sector.

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    Task

    This will also require you to undertake a SWOTof the industry

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    Analyze SWOTS

    A SWOT analysis is a:

    Structured evaluation of internal situations(strengths and weaknesses) and externalsituations (opportunities and threats).

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    SWOT Comparison Sheet

    Strengths My Industry Competitor 1 Competitor 2 Competitor 3

    What are your business

    advantages?

    What are your core

    competencies?

    Where are you making the

    most money?

    What are you doing well?

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    SWOT Comparison Sheet

    Weaknesses My Industry Competitor 1 Competitor 2Competitor 3

    What areas are you

    avoiding?

    Where do you lack

    resources?

    What are you doing poorly?

    Where are you losing

    money?

    What needs improvement?

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    SWOT Comparison Sheet

    Opportunities My Company Competitor 1 Competitor 2Competitor 3

    Any beneficial trends?

    Niches that competitors are

    missing?

    New technologies?

    New needs of customers?

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    SWOT Comparison Sheet

    Threats My Company Competitor 1 Competitor 2 Competitor 3

    Obstacles to overcome?

    Aggressive competitors?

    Successful competitors?

    Negative economic

    conditions?

    Government regulation?

    Changing business

    climate?

    Vulnerabilities?

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    Prioritizing SWOTS

    Once the SWOTs have been identified, they need to beprioritized, based on criteria such as:

    Realistic damageto brand relationships and brand

    equity if a weakness or threat is not addressed. Realistic benefitif a strength or opportunity is

    leveraged.

    Costof addressing or leveraging each SWOT. Timeindustry has to address or leverage each

    SWOT.

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    The SWOT Prioritization18

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    Situation Analysis

    Industry Analysis

    Product/Brand Analysis

    Competitive Analysis (Macro-)Environmental Analysis

    Political

    Economic

    Social

    Technological

    Legal

    Environmental

    Industry-focus

    sections

    Destination

    Analysis

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    Task

    The secondis to start working on thedestination and focus on PESTLE

    Brainstorm the PESTLE with your members.

    Work out how you are going to present thisinformation.

    Remember it is not enough to identify the factor,you must say why it is where it is.

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    Economic

    Economic growth

    Taxation international trade

    Exchange Rate

    Employment law

    Health and Safety law

    Inflation

    Consumer confidence

    Minimum wage

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    Social

    Income distribution

    Demographics

    Labour & Social mobility

    Lifestyle changes Attitudes to work and leisure

    Education

    Fashion and Fads

    Health & Welfare

    Living conditions

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    Technological

    Changes in physical sciences

    Internet

    Energy use and costs Rates of technological obsolescence

    New discoveries

    Govt and Industry focus on tech Govt spending on research

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    Legal

    Employment law

    Health and Safety

    Taxation both corporate and consumer Other regulations

    International trade barriers

    Strength of the rule of law

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    Task

    The Thirdis to write a short piece explaininghow the industry matches with the opportunity

    and threat issues you have identified.

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