What is a PESTLE analysis, and what is it used for?

PESTLE is a strategic analysis tool used to analyse the external elements affecting a business. It is a commonly used method that provides a comprehensive insight into the 6 major macro-environmental factors that influence business operations and strategy - namely, Political, Economic, Social, Technological, Legal & Environmental. By examining current trends and climates, businesses can understand the specific aspects that currently affect them - or those that will in the future. By doing this, they can inform their short, medium & long-term strategies by building in tactical decisions to exploit or combat them.
It is useful to perform this type of external analysis in combination with a SWOT (internal) analysis. The SWOT technique assesses a business's Strengths and Weaknesses, as well as the Opportunities available to them and the threats facing them. By combining the two analyses, businesses can identify their position in their market and assess how strong of a position they stand in internally to exploit or combat external factors.

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Answered by JAMES N. Business Studies tutor

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