Introduction
PESTEL Analyses are a wonderful complement to SWOT Analyses as the former focuses around analysis of weaknesses and threats. PESTEL, as an acronym, stands for:
- Political factors
- Economic factors
- Social factors
- Technological factors
- Environmental factors
- Legal factors
How do I conduct a PESTEL Analysis?
To run a PESTEL Analysis, consider how your product is affected by the following points.
Political
- Government policies
- Leadership (politicians, thought leaders, etc.)
- Trade policies
- Political issues and trends
- Taxes
- Regulatory and deregulatory trends
Economic
- Economic growth, particularly for your product’s industry
- Inflation and interest rates
- Job growth and unemployement
- Labor costs
- Globalization
- Financials of your target audience
Social
- Demographics of your target audience
- Consumer attitudes, opinions, and buying patterns
- Population growth rate
- Socio-cultural changes
- Ethnic and religious trends
- Living standards
Technological
- Means of producing goods and/or services
- Ways of distributing goods and/or services
- Ways of reaching your target audience
Environmental
- Raw materials and their availability
- Pollution targets
- Business ethics and sustainability
- Carbon footprint
Legal
- Effects to health and safety
- Equal opportunity
- Advertising standards
- Consumer rights and laws
- Product labeling and safety
Conclusion
A PESTEL Analysis is a useful tool for product managers as it helps develop a macro-view of your product and the space it exists it. Too often, product managers focus on building the product without consideration of what and where its place in the market is. Don’t make that mistake and remember to look at the big picture every now and then!