Wednesday, November 26, 2014

What are the various methods for macro-environmental analysis?

One method for macro-environmental analysis is called the "PESTLE" method. This is essentially a framework through which to explore the broad environment surrounding an organization. PESTLE stands for Political, Economic, Socio-cultural, Technological, Legal, and Environmental. It's a relatively simple method: you analyze each of these individual areas and how they relate to the organization, and come up with a broader plan that incorporates these various factors. 
For example:
1) Political: What political factors might affect your organization? What are the government's beliefs and policies?
2) Economic: What are the current economic conditions in the area? Is the economy growing or shrinking? What are interest rates like?
3) Socio-cultural: What is the social climate like? What are some demographics that might affect the organization?
4) Technological: What technology is available and how can it be used? This means not only digital/ internet tools but also manufacturing and distribution tools.
5) Legal: The laws in any country are constantly changing. What are the legal factors that might help or hinder the organization? Are there new or changing laws that might have an effect?
6) Environmental: An organization's physical location and its relationship to the environment can also affect the organization. What is the climate like? What are the local waste disposal practices?
Another method, called STEEPLE, integrates the components of PESTLE with one additional factor: Ethics. Ethics can be complex, since something that is legal is not always ethical and something that is ethical is not always legal. In today's world, it is much easier for people to align with companies they ethically support, and it is important for organizations to consider their ethical profile.
All of these can be run through a SWOT analysis, which refers to an organization's Strengths, Weaknesses, Opportunities, and Threats. Any one finding from a PESTLE/ STEEPLE analysis can fall into any of these four categories. A new legal ruling might be an opportunity or a threat; a piece of technology might be a strength or a weakness.
https://pestleanalysis.com/difference-swot-pest-steep-steeple-analysis/

https://pestleanalysis.com/pestle-analysis-business-environmental-analysis/

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