PESTLE Analysis

 PESTLE Analysis

   For a business, how to achieve an excellent management? This question often turns up in businessmen’s minds. Management tool is quite useful and practicable. In my last blog, I have told about Porter’s five forces which are aimed for micro environment. This week, I’ d like to share my understanding on PESTLE Analysis.

     Firstly, what is PESTLE Analysis? PESTLE Analysis provides a quick and visual representation of the external pressures facing an organization and their possible constraints on strategy. Actually PESTLE makes an attempt to predict how external factors may affect the organization. PESTLE Analysis includes six factors (Political, Economic, Sociocultural, Technological, Environmental, Legal)

   I’d like to take easyJet as a example for PESTLE Analysis

PESTLE Analysis for easyJet

Political-legal factors

l   A EU east-enlargement may provide access to viable, new markets

l   The Air Miles scheme is not considered as a taxable perk by the government in the way that company cars are taxed which may change to allow easyJet to compete on more equal grounds with the likes of BA

l   Changes in Employment laws and Environmental laws also will have a effect on easyJet

Economic factors

l   The introduction of the single currency in Europe is likely to bring more business to easyJet as Europe becomes more integrated.

l   Likelihood of increasing fuel costs, congestion and other environmental restrictions, as well as the prospect of higher security and insurance costs to reflect the risk of terrorism.

l   Inflation rates and interest rates also affect easyJet , travellers will pay more attention to their travel expenses.

Socio-cultural factors

l   Changes in lifestyle. In the past, people think travelling by plane is expensive and unsafe, but now sometimes air tickets are even cheaper than railway tickets and time-saving

l   Distribution of income. With the increasing income , people prefer to spend time and money to leisure which also affects easyJet

l   Changes in attitudes to work and leisure. Nowadays people want to have a more balanced life about relaxing and work

Technological factors

l   EasyJet has to keep track of technological developments in the field of e-commerce and aircraft manufacture in order to gain a competitive advantage.

l   Technological advancements – such as the use of the Internet on distribution and cost synergies from industry consolidation – can offset upward pressures on prices and costs.

    I have use PESTLE to analysis easyJet, by doing this analysis, we could see that what strengths and weakness easyJet has, it helps us to predict easyJet future and then take some measures to improve. It will take you little time to conduct a PESTLE Analysis,however it play a vital role in your business management.