Creating a Strategic Business Plan using
PESTLE Analysis
Dr. Nancy Agnes, Head, Technical Operations, Tutorsindia info@ tutorsindia.com
I. INTRODUCTION
A key management approach that is
effectively being used within most modern
organizations is Strategic Planning. It has
continuously enjoyed top rankings amongst five of
the most popular approaches that have been
adopted by managements across the globe [1], [2].
Typically, it has been considered as an approach
adopted to formulate strategy, strategic planning
comprises of components such as; a) evaluation of
the mandate of the organization, values and
mission, b) analyzing an organization’s internal and
external environment, and c) identifying strategic
issues on the basis of such analysis and developing
strategies, plans and goals to tackle any issues [3].
When an organization is keen to realize a
preset goal, it is expected to formulate an effective
strategy to achieve it. The strategy has to be such
that it establishes priorities, fixes a time duration,
allocates resources, formulate mechanisms for
control, allocate human resources and it also needs
to comprise of guidelines as to the manner in which
every aspect will be tackled to realize a particular
goal in the most appropriate manner. Though the
organization might be very reputed, would be
having a skilled and committed team, the question
here would be whether any strategies formulated
might be of use or not? It’s quite simple, all the
organization needs to do is conduct a PESTLE
analysis [4].
II. CONDUCTING A PESTLE ANALYSIS
For those who are clueless, a PESTLE
analysis essentially would refer to executing an
audit of an organization’s environment which
facilitates the process of planning and helps in
arriving at strategic decisions. It is understood that
in case an organization is in a position to audit their
present environment and evaluate probable
changes, they will be in a better position than their
competitors to respond to changes [5]. The analysis
would generally determine the most probable
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events that might have an impact on the
organization. Each of the factors from PESTLE –
Political,
Economic,
Social,
Technological, Legal, Environment would have an
impact on the business plan [6].
III. POLITICAL
This factor would present the manner and
level to which the political environment of a region
would impact the economy and some organization.
This might be at the local, state or national level.
Existing considerations within the market that
might influence the organization would comprise of
factors such as; probable change in government,
instability in the government owing to the balance
of power, altering policies of business and
superannuation, laws pertaining to tax, labour
related laws and trade limitations.
IV. ECONOMIC
This factor would pertain to aspects that
are distinct to the economy and have a direct
impact on the organization. Factors that could
influence the strategic plan of an organization
would comprise of rate of interest, rate of
exchange, rate of inflation, prices of property and
economic growth as well. Economic aspects would
also refer to economic factors of the organization’s
geographic area.
V. SOCIAL
This factor essentially comprises of
demographic factors which would be inclusive of
rate of growth of population, gender and age
distribution of population, cultural facets and
changes in social behaviours. For instance; lately
social media is being extensively utilized to discuss
about products and services. Several of these
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aspects might make an impact on the manner in
which organizations conduct their businesses with
their customers and the techniques used for
interacting with them.
VI. TECHNOLOGICAL
The technological factor would refer to the
rapid changes that occur in the domain of
technology,
technological
research
and
development initiatives and automation. Such
factors are instrumental in driving decisions for
outsourcing, efficiency and quality considerations.
For example; use of smart phones, artificial
intelligence, emergence of location based
searching, skype meetings or mobile internet for
that matter. Over the period of the past three
decades, the massive changes that have occurred in
the domain of technology has hugely impacted all
industry sectors and the speed and level that this
will occur only stands to show an upward trend.
environment where the organization is located.
This would comprise of weather and natural
disasters, climate changes, geographical position
and sustainability. For instance; if the location
where the organization is situated is subject to
extreme weather conditions, it would definitely
make a negative impact on the organization.
X. CONCLUSION
All the above said factors are intricately
associated with the business and it would do well
for an organization to carry out an PESTLE
analysis. The analysis will help them to understand
their external environment and then they can
formulate strategies to tackle them while creating
their strategic plan. Tutors India Uk is the #1
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REFERENCES
VII. LEGAL
Legal factors would pertain to every law
that is directly linked with the organization and
their domain of activity. For instance; laws on
privacy, consumer protection laws, employment
laws and laws against discrimination could
certainly influence some aspects of an organization.
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VIII. ENVIRONMENTAL
The environmental factor draws reference
to every factor that is directly linked with,
determined or influenced on the basis of the natural
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[1]
Darrell Rigby and Barbara Bilodeau,
“Management Tools & Trends,” 2018. [Online].
Available:
https://www.bain.com/contentassets/f8361c5cd9
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[2]
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A
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doi: 10.1111/puar.13104.
[5]
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European
practices
and
perspectives,
Routledge, 2014, pp. 151–172.
[6]
B. Gray, “How to Effectively Conduct a
PESTLE & SWOT Analysis,” 2016.
https://www.linkedin.com/pulse/how-conductpestle-swot-analysis-byron-gray.
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