Example of PESTEL for Starbucks

1. PESTLE Analysis micro site – History – Introduction – Templates – HR example –
Schools & Education
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History of the PESTLE analysis (PEST Analysis)
Originally designed as a business environmental scan, the PEST or PESTLE
analysis is an analysis of the external macro environment (big picture) in which a
business operates. These are often factors which are beyond the control or influence
of a business, however are important to be aware of when doing product
development, business or strategy planning.
This page has been developed to help and support anyone with activities or projects
which require use of the PESTLE analysis tool to undertake an environmental scan
of an organizations operating environment.
Visit the article home page for all of our articles and content

2.  Jump straight to the FREE PESTLE Template (below)
 PESTLE Analysis on an HR department or other internal function
 Download PDF versions of these templates
 History of PEST (LE)
 NEW page on PESTLE analysis for schools and education
It is important to take into account PESTLE factors for the following main reasons:
 Firstly, by making effective use of PESTLE analysis, you ensure that what you
are doing is aligned positively with the powerful forces of change that are
affecting our working environment. By taking advantage of change, you are
much more likely to be successful than if your activities oppose it
 Secondly, good use of PESTLE analysis helps you avoid taking action that is
likely to lead to failure for reasons beyond your control
 Thirdly, PESTLE is useful when you start a new product or service. Use of
PESTLE helps you break free of assumptions, and helps you quickly adapt to
the realities of the new environment
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History of PEST
So where did the term PEST or PESTLE derive? What were the origins?
The term PESTLE has been used regularly in the last 10+ years and its true history
is difficult to establish.
From our research, the earliest know reference to tools and techniques for ‘Scanning
the Business Environment’ appears to be by Francis J. Aguilar (1967) who discusses
‘ETPS’ – a mnemonic for the four sectors of his taxonomy of the environment:
Economic, Technical, Political, and Social.
Shortly after its publication, Arnold Brown for the Institute of Life Insurance (in the
US) reorganized it as ‘STEP’ (Strategic Trend Evaluation Process) as a way to
organise the results of his environmental scanning.
Thereafter, this ‘macro external environment analysis’, or ‘environmental scanning
for change’, was modified yet again to become a so-called STEPE analysis (the
Social, Technical, Economic, Political, and Ecological taxonomies).
In the 1980s, several other authors including Fahey, Narayanan, Morrison, Renfro,
Boucher, Mecca and Porter included variations of the taxonomy classifications in a
variety of orders: PEST, PESTLE, STEEPLE etc. Why the slightly negative
connotations of PEST have proven to be more popular than STEP is not known.
There is no implied order or priority in any of the formats.
Some purists claim that STEP or PEST still contain headings which are appropriate
for all situations, other claim that the additional breakdown of some factors to help
individuals and teams undertaking an environmental scan.

3. Quite who and when added what elements to the mnemonic is a mystery, but what
we do know is that the actual order and words contained are common to certain
parts of the world and streams of academic study. The term PESTLE is particularly
popular on HR and introductory marketing courses in the UK. Others favour PEST,
STEP or STEEPLE.
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Introduction to The PESTLE Analysis tool
PESTLE analysis is a useful tool for understanding the “big picture” of the
environment in which you are operating, and the opportunities and threats that lie
within it. By understanding the environment in which you operate (external to your
company or department), you can take advantage of the opportunities and minimize
the threats.
Specifically the PEST or PESTLE analysis is a useful tool for understanding risks
associated with market growth or decline, and as such the position, potential and
direction for a business or organization.
For the purposes of this page we will focus on the PESTLE variation of the acronym.
The PESTLE Analysis is often used as a generic ‘orientation’ tool, finding out where
an organization or product is in the context of what is happening out side that will at
some point effect what is happening inside an organization.
A PESTLE analysis is a business measurement tool, looking at factors external to
the organization. It is often used within a strategic SWOT analysis (Strengths,
Weaknesses, Opportunities and Threats analysis).
PESTLE is an acronym for
Political, Economic, Social, Technological, Legal and Environmental
factors,
which are used to assess the market for a business or organizational unit
strategic plan
The PESTLE analysis headings are a framework for reviewing a situation, and can
also be used to review a strategy or position, direction of a company, a marketing
proposition, or idea. There are many variants on this model including PEST analysis
and STEEPLE analysis.
Completing a PESTLE analysis can be a simple or complex process. It all depends
how thorough you need to be. It is a good subject for workshop sessions, as

4. undertaking this activity with only one perspective (i.e. only one persons view) can
be time consuming and miss critical factors.
Use PESTLE analysis for business and strategic planning, marketing planning,
business and product development and research reports.
The PESTLE template below includes sample questions or prompts, whose answers
are can be inserted into the relevant section of the table.
The questions are examples of discussion points, and should be altered depending
on the subject of the analysis, and how you want to use it.
Make up your own PESTLE questions and prompts to suit the issue being analyzed
and the situation (i.e. the people doing the work and the expectations of them).
It is important to clearly identify the subject of a PESTLE analysis (that is a clear
goal or output requirement), because an analysis of this type is multi faceted in
relation to a particular business unit or proposition – if you dilute the focus you will
produce an unclear picture – so be clear about the situation and perspective that you
use PESTLE to analyze.
A market is defined by what is addressing it, be it a product, company, organization,
brand, business unit, proposition, idea, etc, so be clear about how you define the
market being analyzed, particularly if you use PESTLE analysis in workshops, team
exercises or as a delegated task. The PESTLE subject should be a clear definition of
the market being addressed, which might be from any of the following standpoints:
 A company looking at its market
 A product looking at its market
 A brand in relation to its market
 A local business unit or function in a business
 A strategic option, such as entering a new market or launching a new product
 A potential acquisition
 A potential partnership
 An investment opportunity
Be sure to describe the subject for the PESTLE analysis clearly so that people
contributing to the analysis, and those seeing the finished PESTLE analysis,
properly understand the purpose of the PESTLE assessment and implications.
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PESTLE analysis template
Other than the main headings, the questions and issues in the template below are
examples and not exhaustive – add your own and amend these prompts to suit your
situation, the experience and skill level of whoever is completing the analysis, and

5. what you aim to produce from the analysis. A word document of this tool is available
in our ResourceZone
The context upon which a PESTLE analysis is undertaken can help to determine
how to interpret facts and information discovered.
PEST/ PESTLE Analysis on ____________________(organization name) SWOT
SWOT Context ____________________
SWOT Date of Analysis ____________ view
PESTLE Your Potentia Implication and importance
Analysis notes l
factors Impact:
The list below is About H– Time Type:P Impact:In Relative
just to get you your HighM – Fram ositive creasing Importance:Critica
started. organizati Medium e:0 – +Negati >Unchang lImportantUn-
Remember to on.How L– 6 ve ed importantUnknow
put these, and might the LowU – mont -Unkno =Decreasi n
others that you factors Undeter hs6 – wn ng
add in the listed on mined 12 <Unknow
context of your the left mont n
organization or impact hs12
business.For your – 24
example if you business mont
are a small or part of hs24
private company the +
the behaviours organizati mont
of a Wall Mart / on? hs
Tesco or other
large
international
player may well
impact on you.If
you are a local
authority,
government
changes will
change your
priorities. In the
NHS changes to
treatments and
public attitudes
will also impact
etc.
Political-
SWOT
 Trading

6. policies
 Funding,
grants and
initiatives
 Home
market
lobbying/pre
ssure
groups
 Internatio
nal
pressure
groups
 Wars and
conflict
 Governm
ent policies
 Governm
ent term
and change
 Elections
 Inter-
country
relationship
s/attitudes
 Terrorism
 Political
trends
 Governm
ental
leadership
 Governm
ent
structures
 Internal
political
issues
 Sharehol
der/
stakeholder
needs/
demands
 _______
_________
___
 _______
_________
___
 _______

7. _________
___
 _______
_________
___
 _______
_________
___
Economic-
SWOT
 Home
economy
situation
 Home
economy
trends
 Overseas
economies
and trends
 General
taxation
issues
 Taxation
changes
specific to
product/ser
vices
 Seasonal
ity/weather
issues
 Market
and trade
cycles
 Specific
industry
factors
 Market
routes and
distribution
trends
 Customer
/end-user
drivers
 Internatio
nal
trade/monet
ary issues
 Disposab

8. le income
 Job
growth/une
mployment
 Exchang
e rates
 Tariffs
 Inflation
 Interest
and
exchange
rates
 Consume
r confidence
index
 Import/ex
port ratios
 Productio
n level
 Internal
finance
 Internal
cash flow
 _______
_________
___
 _______
_________
___
 _______
_________
___
 _______
_________
___
 _______
_________
___
Social- SWOT
 Consume
r attitudes
and
opinions
 Media
views
 Law
changes
affecting

9. social
factors
 Brand,
company,
technology
image
 Consumer
buying
patterns
 Major
events and
influences
 Buying
access and
trends
 Ethnic/rel
igious
factors
 Advertisi
ng and
publicity
 Ethical
issues
 Demogra
phics (age,
gender,
race, family
size,)
 Lifestyle
changes
 Populatio
n shifts
 Educatio
n
 Trends
 Fads
 Diversity
 Immigrati
on/emigrati
on
 Health
 Living
standards
 Housing
trends
 Fashion
& role
models
 Attitudes

10. to work
 Attitudes
to people
doing
certain
types of
work
 Leisure
activities
 Occupati
ons
 Earning
capacity
 Staff
attitudes
 Managem
ent style
 organizati
onal culture
 Changes
to education
system
 _______
_________
___
 _______
_________
___
 _______
_________
___
 _______
_________
___
 _______
_________
___
Technological-
SWOT
 Competin
g
technology
developmen
t
 Research
funding
 Associate
d/dependen

11. t
technologie
s
 Replace
ment
technology/
solutions
 Maturity
of
technology
 Manufact
uring
maturity
and
capacity
 Informati
on and
communicat
ions
 Consume
r buying
mechanism
s/technolog
y
 Technolo
gy
legislation
 Innovatio
n potential
 Technolo
gy access,
licensing,
patents
 Intellectu
al property
issues
 Global
communicat
ions
 Invention
s
 Innovation
s
 New
discoveries
 Research
 Energy
uses/source
s/fuels

12.  Communi
cations
 Rate of
obsolescen
ce
 Health
(pharmaceu
tical,
equipment,
etc.)
 Manufact
uring
advances
 Informati
on
technology
 Internet
 Transport
ation
 Bio-tech
 Genetics
 Waste
removal/rec
ycling
 Email
 M-
learning
 E-
learning
 Collabora
tion tools
 Software
changes
 RSI
 _______
_________
___
 _______
_________
___
 _______
_________
___
 _______
_________
___
 _______
_________
___

13. Additional split of information if doing a PESTLE analysis rather than a PEST analysis:
Legal- SWOT
 Current
legislation
home
market
 Future
legislation
 European
/internation
al
legislation
 Regulator
y bodies
and
processes
 Environm
ental
regulations
 Employm
ent law
 Consume
r protection
 Industry-
specific
regulations
 competiti
ve
regulations
 _______
_________
___
 _______
_________
___
 _______
_________
___
 _______
_________
___
 _______
_________
___
Environmental-
SWOT
 Ecologica
l

14.  Environm
ental issues
 Int
ernatio
nal
 Na
tional
 Lo
cal
 Environm
ental
regulations
 Customer
values
 Market
values
 Stakehol
der/
investor
values
 Staff
attitudes
 Managem
ent style
 organizati
onal culture
 Staff
morale
 Staff
engagement
 Global
factors
 EU
based
factors
 _______
_________
___
 _______
_________
___
 _______
_________
___
 _______
_________
___
 _______
_________

15. ___
top
Remember this is only a tool. Call it what you like – use whatever factors you feel are
appropriate. Other variations include:
 PEST analysis (STEP analysis) - Political, Economic, Sociological,
Technological
 PESTLE/ PESTEL analysis- Political, Economic, Sociological, Technological,
Legal, Environmental; PESTEL analysis
 PESTEL analysis- Political, Economic, Sociological, Technological,
Environmental, Labour (Labor) related; PESTEL analysis (rare no references
available)
 PESTLIED analysis- Political, Economic, Social, Technological, Legal,
International, Environmental, Demographic
 STEEPLE analysis – Social/Demographic, Technological, Economic,
Environmental, Political, Legal, Ethical
 SLEPT analysis – Social, Legal, Economic, Political, Technological
 STEPE analysis – Social, Technical, Economic, Political, and Ecological
 ETPS analysis – Economic, Technical, Political and Social – Scanning the
business environment
Choose the acronym that most suits you or your organization.
top
Next Step in a PESTLE analysis
When you have identified the factors that may impact your organization, in column 2
list HOW they would impact on your organization. When this is complete, in column 3
indicate the extent to which each factor is a risk.
As a rule of thumb, for every HIGH risk you identify you should have at least 10
MEDIUM and 20 LOW risk item. If you identify more high risks than low risks it may
be worth re-visiting your thoughts on what may or may not impact your organization.
Then look at the relative importance and implication of each factor.
When you have done this you are ready to start to populate a SWOT analysis (see
below).
top
Action Planning
When you have collated the relevant data you need to develop an action plan with
SMART objectives (Specific measurable achievable relevant time-bound or
SMARTER objectives)

16. top
PESTLE Analysis on an HR department or
other internal function
While the PEST or PESTLE analysis is primarily aimed at looking at the external
environment of an organization, many HR courses ask students to use the PEST or
PESTLE analysis model to look at their own function. In this context we need to
imagine that the department (HR) is an organization in its own right and look outside.
Factors to include in your analysis may include the following:
 Political
 What is the culture of the organization,
 How is the HR function viewed by other functions?
 Who are the political champions of HR (or its adversaries)?
 Shareholder views
 Economic
 What is the budgetary position of the department,
 Is more money available?
 Are our customers likely to spend more or less money on the services
we offer?
 What is happening to the financial status of the organization
 Interest rates
 Inflation
 Salary trends in the sector
 Sociological
 Other departmental attitudes to HR
 Population shifts (age profile)
 Education
 Fads
 Diversity
 Immigration/emigration
 Health
 Living standards
 Housing trends
 Fashion & role models
 Age profile
 Attitudes to career
 Technological
 What changes may be coming our way?
 What new technology/ systems,
 How do we record attendance, performance? how might this change?
 Use of and encourage home working?
 Communications technologies
 changes of technology that will increase/ reduce the need for
recruitment
 changes to HR software
 Legal
 What is happening in our sector that will impact what we do?

17.  Minimum wage,
 Working time,
 Food stuffs,
 Under 18 working,
 Occupational/ industrial Training etc.
 What changes will impact the services of the organization
 Environmental
 Staff morale
 Staff engagement
 Need to reduce storage needs
 Management attitudes (inside dept/ function)
 Organizational culture
top
This is only a sample of the types of issues you may include. Use the topics listed in
the template above to give you ideas and inspire you, just relate them to the rest of
your organization and your ‘customers’.
NEW page on PESTLE analysis for schools and
education
On to SWOT analysis
To take the PESTLE analysis forward you can integrate the results into your SWOT.
The outputs from the BIR/ SWOT will provide you with your internal strengths and
weaknesses.
Have a look at the HIGH impacts from the PESTLE. Some will be positive in nature,
others will be negative. List these on your SWOT analysis under OPPORTUNITIES
and THREATS.
The PESTLE model is a useful environmental scan as part of a diagnostic process.
The PESTLE analysis tool can be used in association with the Business
Improvement Review (BIR) – a highly structured and holistic SWOT tool. The
PESTLE models can help to identify the context in which a business operates and
provide a context for change. A PESTLE analysis can provide a valuable agenda
upon which to use a Business Improvement Review (BIR) to help identify the
strengths and weaknesses (SWOT) of an organization, as apart of an organizational
change process. Click here for more information. Need to write SMART objectives?
Need to use Management Models
Have you found this page of value? Need more details/ ideas? Your feedback is
welcomed.
Based upon information from many sources. No copyright over the model or
acronyms are assumed. This page is provided for educational purposes only.

18. RapidBI Ltd cannot accept any responsibility for the actions taken using this or any
of the tools provided on this site. Please note this page is updated on a regular
basis. The more feedback we get the more we will develop this and similar pages for
people studying CIPD and other HR and management programmes. CTP, CPP etc
A PESTLE analysis is a simple but effective tool that is often overlooked in practical
business planning activities.
top



Related Training/ leadership/ Change posts:
1. PESTLE analysis templates
2. Introduction-to-the-PESTLE-analysis-tool
3. schools-education-and-the-PESTLE-analysis-tool
Filed Under: Created Articles, SWOT Analysis Tagged With: analysis, History, PEST, PESTLE, PESTLE analysis, Templates
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Comments
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March 25, 2011 at 01:00
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October 15, 2011 at 17:44
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20. Trackbacks
1. Mike Morrison says:
February 5, 2011 at 13:39
Blog post – PEST/ PESTLE Analysis Tool – History & Templates
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2. Deita Rolano says:
February 5, 2011 at 13:44
RT @RapidBI: Blog post – PEST/ PESTLE Analysis Tool – History & Templates
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3. theLBSS says:
February 23, 2011 at 01:00
Random article from @rapidbi blog- http://rapidbi.com/the-PESTLE-analysis-tool/
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4. PESTLE Analysis of a firm says:
January 6, 2012 at 05:09
[...] PEST Analysis of a business [...]
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5. PEST Analysis of a company | Quality Services Alaska says:
January 6, 2012 at 05:09
[...] PEST Analysis of a business [...]
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6. PEST Analysis of an enterprise | manifestwitness.com says:
January 6, 2012 at 05:11
[...] PEST Analysis of a business [...]
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7. Strategic Business Analysis is Messy Business | Ubiquitous Wisdom says:
January 26, 2012 at 02:51
[...] PESTLE [...]
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