PESTEL Analysis: Understanding The Macro World

PESTEL stands for Political, Economical, Social, Technological, Environmental and Legal. Each PESTEL domain contents far environmental factors. Factors in this domain are related to the macro systems such as countries, governments, societies, international community, ecosystem.

Some factor examples for each PESTEL domain is in the table below:

​POLITICAL Government policies Tariff policies Industrial policies & international trade policies Protectionism policies Trading restrictions (economic sanctions) Immigration policies Pandemic or epidemic policies … Political instability (regional conflicts, wars and civil wars) International relations (agreements and alliances) Policies of regional unions & alliances (EU, ASEAN, NATO, Shanghai Cooperation Organisation etc.) ...	​ECONOMICAL State of the economy (crisis, resession, heat etc.) Economical policies of the government (growth, trade wars, sanctions, protectionism, boycotts and embargoes, stimulus packages released by governments) Financial markets Economic and consumer confidence indices Fluctuation in exchange rates Interest rates (FED, ECB, national central banks) Inflation & devaluation Gross domestic product (GDP) and per capita income (PCI) Entrepreneurship (startup ecosystems, investment banks etc.) State of job and labour markets (rates of unemployement and participation in business life etc.) Level of minimum wage ...
​​SOCICAL Demographics (population size, gender distribution, birth rate, aging of the population etc.) Change in socioeconomic status New lifestyle trends (wellbeing, sustainable, minimal etc.) Increase in health & environment awareness Increase of individual security Cultural barriers Increase in social media & internet usage, ecommerce penetration New generations (lifestyle, career expectations etc.) Increase in sensitivity of the international community to global issues (racism, gender inequality, human rights etc.) and activism ...	​​​TECHNOLOGICAL Technology innovations Research&Development (R&D) Digital transformation Data analytics&business intelligence (BI) Automation AI&robotics technologies Data security&cyber security Digital communication channels Technological awareness Technological stimulus Industry technology trends (such as digital retail, 3D printing) Players in the technology ecosystem (institutes, incubation and innovation centers, technology start-ups etc.) ...
ENVIRONMENTAL Extreme weather conditions, climate action failure, natural disasters Contamination of natural resources Environment policies Global environmental agreements (such as Kyoto Protocol, Paris Agreement and COP26) Activities of environmental organizations (NGOs like Greenpeace, WWF etc.) Sustainability New energy trends Animal rights ...	​​​LEGAL Change in the Constitution Legislation Anti-discrimination laws Anti-monopolist laws Labour laws Custom laws Consumer protection laws Patent and copyright laws General data protection regulation (GDPR) Health & security laws Regulation & deregulation Syndication ...

The PESTEL domains are not isolated and factors within a domain interact with those in another.

For instances:

• Conflicts between nations or wars may create economical issues: Such as sanctions, protectionism, boycotts and embargoes, recession. (Political > Economical)

• People who feel restricted and suppressed for a long time during COVID-19 pandemic, will increase consumption after the pandemic. Depending on this, the container crisis has occured. (Social > Economical)

• The economic growth targets after the pandemic and BREXIT withdrawal agreement forced the UK to make a new immigration policy to attract skilled labour. (Economical > Economical + Social)

• The migration from the Eastern European countries to Western Europe has led to a labor shortage in the last two years. (Social > Economical)

• ...

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