Component of PESTEL Explanation of component Application to entity

1. Political factors These are all about how and to what degree a government
intervenes in the economy. For example government policy,
political stability or instability in overseas markets, foreign
trade policy, tax policy, labour law, environmental law, trade
restrictions, changes to legislation, global influences, Brexit
etc.
2. Economic factors Economic factors have a significant impact on how an
organisation does business and also how profitable they are.
For example economic growth, interest rates, exchange
rates, inflation rates, disposable income of consumers and
businesses, unemployment rates, monetary policy,
consumer confidence etc.
3. Social factors Also known as socio-cultural factors, are the areas that
involve the shared belief and attitudes of the population. For
example population growth, age distribution, health
consciousness, career attitudes, income distribution,
demographic influences, lifestyle factors/attitudes, cultural
barriers, target demographics, accepted norms etc.
4. Technological Technology is having an unprecedented impact on all
factors aspects of life, including business. The capabilities enabled
by the growth of the internet have revolutionised the way
business organisations interact with their target
demographics. For example international influences,
changes in IT, take up rates, level of innovation, automation,
4IR, cybersecurity, internet availability/speed, research and
development activity, pace of technological change etc.
5. Environmental Consumers are increasingly concerned about the
factors environmental impact of their actions, including any
purchases they make in the market. They want sustainable
and environmentally friendly products, from companies that
are willing to do more to offset their carbon footprint. For
example weather, climate change, environmental policies,
 NGO pressure, recycling, pollution, sustainability etc.
6. Legal factors Companies need to know what is and what is not legal in
order to trade successfully. If an organisation trades globally
this becomes a very tricky area to get right as each country
has its own set of rules and regulations. For example health
and safety, equal opportunities, advertising standards,
consumer rights and laws, product labelling, product safety,
taxation policies, employment laws, industry regulations,
discrimination laws, copyright protection, consumer safety
etc.
7. Ethical factors The most recent addition to PESTEL is the extra E - making it
(NEW) PESTELE or STEEPLE. This stands for ethical, and includes
ethical principles and moral or ethical problems that can
arise in a business. For example fair trade, slavery acts, child
labour, corporate social responsibility (CSR), where a
business contributes to local or societal goals such as
volunteering or taking part in philanthropic, activist, or
charitable activities.