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PESTLE stand for Political, Economical, Social, Technological, Legal and Environmental analysis. This is a process in Corporate Strategy which is used to analyze a company’s or a product’s position in a given point of time. The analysis is also important where a new product is being introduced into a market. The market which includes the above mentioned political, economical, social, technological, legal and environmental factors are studied. The study will reveal how much can the product, under normal circumstances penetrate the market.

The analysis is essential in today’s environment as every now and then new products being introduced in new and foreign markets. These new and foreign markets are being explored to the extent possible. And in order that the product penetrates well into the market an insight of how the market works, how the customers will react to a new product must be studied. This will include not only the ultimate consumers but also, many people and systems in the process.

The broad factors that are to be considered are the political, economical, social, technological, legal and environmental.

Political factors include the political outlook towards the market. The political outlook towards business and economy, the present corporate taxation policy, the future taxation policy, the affects of war or warlike conditions, political instability, grants, licenses, patents, etc.

Economical factors include the economic situation, consumer spending preferences, the stock market, ease of access to finance, current and future taxation and fiscal policies, the exchange rates, etc.

Social factors include demographics, average lifestyle preferences and changes, education, responsibility, general awareness of the consumers, ethnic and religious differences, taboos and prejudices, etc.

                  

Technological factors include the technology prevalent across various industries, health and safety issues in various industries, intellectual property rights, patents, copyrights, procurement of latest technology, prevalence of obsolete technology, ways in which consumers purchase, etc.

Legal factors include the legislation in the areas of business, employment, labor laws, industrial laws, health and safety laws, future changes in legislation, trading policies, regulatory laws, regulatory bodies, etc.

Environmental factors include the level of pollution created by the industries, recycling options and considerations, attitude and awareness towards environment from people, political system and media, present and future environmental legislations, etc.

Earlier, the analysis was limited to political, economic, social and technological factors but due to recent developments in legal and environmental systems even their study has been included and broadened the scope. So, an organization has to think of the various above mentioned factors before attempting trade in a country. 

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