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PESTLE analysis factors are Political, Economic, Sociological, Technological, Legal and Environmental. The PESTLE analysis examines each factor to assess what their impact or potential impact on the organisation. In this way, they can prepare strategically for any changes that need to be made in the organisation or simply to have the awareness of the external market to give them a competitive edge over other firms in the industry. Examples of each PESTLE analysis factor are: Political: what is happening politically with regards to tax policies employment laws, trade restrictions, tariffs Economic: what is happening within the economy i.e economic growth/ decline, minimum wage, unemployment (local and national), credit availability, cost of living, etc. Sociological: what is occurring socially i.e cultural norms and expectations, health consciousness, population growth rate, career attitudes,. Technological: new technologies are continually being developed. There are also changes to barriers to entry in given markets Legal: changes to legislation. This may impact employment, access to materials, resources, imports/ exports, taxation etc. Environmental: what is happening with respect to ecological and environmental aspects.
company, we are concerned with the external audit which examines macroenvironmental facts such as PESTLE analysis factors. There are other methods of analysis which the PESTLE analysis works alongside such as a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. The Opportunity and Threats aspect are concerned with the external factors what influences the market and performance. It can therefore be said that the PESTLE analysis is useful in assessing opportunities and threats to the organisation. An example of a PESTLE analysis factor which may also be an opportunity or threat is the economy. Due to the present credit crunch, it is now difficult to secure a mortgage. Therefore organisations in the property industry are now threatened as their individuals jobs and organisations as a whole have been deeply affected leading to some redundancies.
The current economic climate is relatively weak and individuals are not feeling sufficiently wealthy to spend large amounts of their income on health spa treatments. As the pestle analysis has indicated, this to be a particular threat to the health spa industry and this should be something that management looks at mitigating. Typically, this could include reduction in costs in relation to part time staff or generating additional revenue with discounts and enhanced services for clients.