Last edited 14 Jul 2014

Pestle analysis

PESTLE is list of areas that can be analysed to help assess the position of a business in relation to external factors. These are factors that may have implications on its trading abilities in both the long and short term.

A PESTLE analysis can form part of a risk management strategy. When a PESTLE analysis is undertaken by a business, a short report is generally prepared highlighting any possible implications on future trading potential, setting out both opportunities and threats.

The acronym PESTLE stands for:

  • Political: For example, a change in government is likely to have an effect on the construction sector.
  • Environmental: Such as the impact of a government target to cut emissions.
  • Social: An ageing population and an increase in requirements for single person homes may impact on the types of buildings required.
  • Technological: Advances in broadband technology, or the adoption of BIM may change the ways we work.
  • Legal: Planning legislation, building regulations, case law and so on.
  • Economic: Government spending has historically been used to regulate the economy, with significant impacts on construction.

This is a variation on PEST analysis which is restricted to Political, Economic, Social, and Technological influences.

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