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Map the external forces shaping your market.
PESTLE is a mnemonic for factors that drive and shape market trends and consumer behaviour. It stands for: Political, Environmental, Societal, Technological, Legal and Economic. Participants spend time analysing their business from the perspective of each of these factors.
It can be really useful to understand and map out the wider context of the sector in which you operate, because these trends and changes will affect your business and your brand. The PESTLE framework is a useful tool here.
PESTLE is a mnemonic for factors that drive and shape market trends and consumer behaviour. It stands for:
Political factors – Government changes that will affect trading – for example taxation & duty, grant funding, stability, international trade policy, environmental policy
Environmental factors – The impact of environmental change – for example materials availability, flood risk, water shortage, carbon footprint, pollution
Social factors – Changes in the way society is behaving that could influence your customers' attitudes - for example changing household sizes, the rise of social media, changing attitudes to sexuality, or the adoption of greener lifestyles
Technological factors – How technology innovation might impact the market and your business
Legal factors – Changes in legislation that could impact your business - for example living/minimum wage laws, toxic materials legislation, labelling laws
Economic factors – Major economic drivers that affect trading, from local factors such as employment costs that affect margin and retail selling price, to national economic stability forecasts and international trading agreements.
This exercise can set you up for a strategic planning technique such as Scenario Planning.
Use PESTLE when a team needs to understand the wider context around the organisation before setting direction. Working through political, environmental, social, technological, legal and economic factors in turn maps the outside forces shaping the market, and sets up deeper work such as Scenario Planning.
Using this tool with a skilled facilitator means that discussions are focused, time is used efficiently, and the group moves toward consensus, making the session productive and impactful.
