PESTEL analysis of a company: what it is and how to do it
Posted: Mon Apr 28, 2025 5:38 am
Analyzing the external factors that affect a company is essential for its survival, as it determines its ability to adapt to market changes. There are various tools that can detect environmental risks and opportunities. One of the best known is SWOT analysis , although PESTEL analysis is a more powerful and comprehensive tool.
What is PESTEL analysis?
PESTEL analysis is a tool used to identify the macro-level external forces that influence a business and can determine its performance, both economically and in terms of reputation. The acronym PESTEL refers to the factors analyzed: Political, Economic, Social, Technological, Environmental, and Legal. Therefore, PESTEL analysis is a market study solely of external factors that affect a company.
How to do a PESTEL analysis?
To analyze a company's external environment, you must consider how macro factors can affect the business. This example of Apple's PESTEL analysis will help you better understand this.
Political factors. The policies of the country buy phone number list where the company operates, government stability, and changes in international agreements are analyzed. In the case of Apple, trade tensions between the United States and China, where the tech giant manufactures its iPhones, coupled with pressure from the US government to relocate production to domestic soil, are destabilizing factors.
Economic factors. Changes in tax regulations, economic crises, inflation, exchange and interest rates, and employment rates are also external factors that affect a company. For Apple, the loss of purchasing power among the European and American middle classes, coupled with rising manufacturing costs due to wage increases in China, are significant factors affecting its business.
Social factors. The PESTEL analysis includes an assessment of cultural patterns, shared values, geographic movements of consumers, and changes in their consumption habits. In Apple's case, concerns about corporate ethics due to its factories in China, as well as the growing backlash against expensive products and planned obsolescence, represent major risks for the brand.
Technological factors. The cost of access to technology, R&D investments, and technological upgrades are essential aspects for a company's external analysis. Apple, for example, must compete with major competitors like Google and Samsung, which respond more quickly to changing consumer needs. The restricted environment of iOS is another factor working against the brand.
Ecological factors. These are all aspects related to environmental preservation, from pollution emitted by business activities and the use of natural resources to waste management. In this regard, Apple's biggest problems are: the disposal of its electronic devices, the pollution produced by its factories, and the environmental impact of its supply chain.
Legal factors. These include laws that affect the company and limit its operations, ranging from regulations governing employment to those related to workplace safety, intellectual property, consumer protection, and/or energy consumption. In Apple's case, its dependence on intellectual property laws for the software and music it distributes makes it vulnerable to piracy and litigation.
PESTEL analysis and the business sector
What is PESTEL analysis?
PESTEL analysis is a tool used to identify the macro-level external forces that influence a business and can determine its performance, both economically and in terms of reputation. The acronym PESTEL refers to the factors analyzed: Political, Economic, Social, Technological, Environmental, and Legal. Therefore, PESTEL analysis is a market study solely of external factors that affect a company.
How to do a PESTEL analysis?
To analyze a company's external environment, you must consider how macro factors can affect the business. This example of Apple's PESTEL analysis will help you better understand this.
Political factors. The policies of the country buy phone number list where the company operates, government stability, and changes in international agreements are analyzed. In the case of Apple, trade tensions between the United States and China, where the tech giant manufactures its iPhones, coupled with pressure from the US government to relocate production to domestic soil, are destabilizing factors.
Economic factors. Changes in tax regulations, economic crises, inflation, exchange and interest rates, and employment rates are also external factors that affect a company. For Apple, the loss of purchasing power among the European and American middle classes, coupled with rising manufacturing costs due to wage increases in China, are significant factors affecting its business.
Social factors. The PESTEL analysis includes an assessment of cultural patterns, shared values, geographic movements of consumers, and changes in their consumption habits. In Apple's case, concerns about corporate ethics due to its factories in China, as well as the growing backlash against expensive products and planned obsolescence, represent major risks for the brand.
Technological factors. The cost of access to technology, R&D investments, and technological upgrades are essential aspects for a company's external analysis. Apple, for example, must compete with major competitors like Google and Samsung, which respond more quickly to changing consumer needs. The restricted environment of iOS is another factor working against the brand.
Ecological factors. These are all aspects related to environmental preservation, from pollution emitted by business activities and the use of natural resources to waste management. In this regard, Apple's biggest problems are: the disposal of its electronic devices, the pollution produced by its factories, and the environmental impact of its supply chain.
Legal factors. These include laws that affect the company and limit its operations, ranging from regulations governing employment to those related to workplace safety, intellectual property, consumer protection, and/or energy consumption. In Apple's case, its dependence on intellectual property laws for the software and music it distributes makes it vulnerable to piracy and litigation.
PESTEL analysis and the business sector