PESTLE Analysis

• What does PESTEL stand for in PEST analysis?

  Political, Economic, Social, Technological, Environmental, Legal
• What is the purpose of PEST analysis?

  To identify external factors impacting a business
• What is an example of a political factor in PEST analysis?

  Fiscal policy
• How does government spending affect businesses?

  It influences market conditions and opportunities
• What impact does a reduction in corporation tax have on businesses?

  It increases profits available for reinvestment
• What is government intervention in markets?

  When governments regulate or influence market activities
• Why do governments intervene in monopolies?

  To prevent price increases and protect consumers
• What are price caps in regulation?

  Limits on how much prices can increase
• What is a windfall tax?

  A one-off tax on certain industries
• What economic cycle phases can affect businesses?

  Boom, recession, and bust
• What is the current trend of interest rates in the UK?

  They are at historically low levels
• How does unemployment affect businesses?

  High unemployment increases available skilled workers
• What does a strong currency imply for exports?

  It makes exports more expensive
• How does consumer income affect business spending?

  Higher income levels increase spending on products
• What is consumer confidence?

  It reflects consumers' willingness to spend
• What demographic change is noted in the UK?

  An aging population and increased immigration
• How do lifestyle changes affect businesses?

  They create new demands for products and services
• What is e-commerce?

  Buying and selling goods online
• How has the health crisis affected working patterns?

  It accelerated the shift to flexible working
• What is the impact of automation on businesses?

  It reduces operational costs and increases efficiency
• What is the role of disruptive businesses?

  They challenge and change existing market dynamics
• What is a minimum wage?

  The lowest legal wage that can be paid
• How do environmental changes affect businesses?

  They require adaptation to new regulations and consumer preferences
• What is fair trade?

  A movement to ensure fair prices for producers
• What are the key components of PESTEL analysis?

  • Political factors
  • Economic factors
  • Social factors
  • Technological factors
  • Environmental factors
  • Legal factors
• What are the strengths and weaknesses of government intervention in markets?

  Strengths:

  • Protects consumers from monopolies
  • Ensures fair pricing

  
  

  Weaknesses:

  • Can stifle competition
  • May lead to inefficiencies
• What are the implications of economic factors in PEST analysis?

  • Economic cycle (boom or recession)
  • Interest rates (high or low)
  • Unemployment levels (high or low)
  • Exchange rates (strong or weak)
  • Consumer income levels (increasing or decreasing)
  • Consumer confidence
• What are the technological factors affecting businesses?

  • Growth of e-commerce and m-commerce
  • Demand for automation and robotics
  • Changes in consumer expectations
• What are the environmental and ethical considerations in PESTEL analysis?

  • Green technology and carbon emission taxes
  • Fair trade practices and their impact on supply chains