Wrestle with PESTLE: what is it?

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In 2023, we’re set to help you crack down on your commercial awareness. Welcome back to the Wrestle with PESTLE series, where we’re going to continue looking at various business case studies using the PESTLE technique. But first, here’s an introduction to the technique and how you can use it to pull apart any commercial issues you may need to explore in exams, interviews and beyond.

What’s the PESTLE technique?

Check out this Wrestle with PESTLE on the airline industry and covid-19.

PESTLE stands for:

• political;
• economic;
• sociological;
• technological;
• legal; and
• environmental.

You can use these six external factors as a basis for your analysis and to help you better understand the world of the people you’re advising. To complete a PESTLE analysis, you need to find as much relevant information as possible about the business or issue you’re assessing and divide it appropriately between the six categories listed above. This technique, which involves breaking down complex issues into manageable portions, means you can analyse and see different matters from various perspectives.

However, to complete a successful analysis, you must understand what each category stands for. As this technique is most easily understood through ‘doing’, its acronym breaks down as follows (with generic ‘market-based’ examples):

• Political factors – these relate to government control and influence over an economy or industry, this could be through legislation or economic policy.
• Economic factors – these have a direct impact on a business’s long-term projections within a given market. For example, the current economic climate due to the cost-of-living crisis impacts how companies price their products due to rising inflation.
• Sociological factors – meaning the demographic and culture that surrounds a given business, issue or product. Factors such as trends, busying patterns and lifestyle all influence how people interact with businesses, products or services.
• Technological factors – could have a direct or indirect impact on businesses. All industries are affected to some degree by changes, including automatic technological development hardware versus software changes and cultural adoptions of this tech.
• Legal factors – these affect the policies and procedures of a business or product. Employment, safety and regulations all fall under this bracket.
• Environmental factors – this includes all those relating to the physical environment. Geographical location, weather and stakeholder values are all examples of environmental factors you should consider.

As you can see, PESTLE is a useful tool in breaking down and understanding commercial news issues in greater detail. From applications to interviews and more, this method will help you to analyse the overall impact of a variety of commercial issues on a particular area or business with confidence.

In our next PESTLE article, we’ll provide you with an up-to-date example of how to use the PESTLE analysis on a recent news story.

Follow along with our Wrestle with PESTLE journey, featured in the Commercial Connect Newsletter and via the LCN Says section of the website, by signing up to LawCareers.Net.

Katherine Bryant (she/her) is a content and engagement coordinator at LawCareersNet.