Tools in PM
A PESTEL analysis or PESTLE analysis (formerly known as PEST analysis) is a framework or tool for strategic analysis and negotiations used to analyse and monitor the macro-environmental factors that may have a profound impact on an organization’s performance. This tool is especially useful when starting a new business or entering a foreign market. It is often used in collaboration with other analytical business tools such as the Porter’s five forces analysis or SWOT analysis to give a clear understanding of a situation and related internal and external factors. PESTEL is an acronym that stands for political, economic, social, technological, environmental and legal factors. However, throughout the years people have expanded the framework with factors such as demographics, intercultural, ethical and ecological resulting in variants such as STEEPLED, DESTEP and SLEPIT. In this article, we will stick simply to PESTEL since it encompasses the most relevant factors in general business. Each factor will be part of the negotiation analysis as shown in Fig. 8.1 (Helmold, Dathe, & Hummel, Erfolgreiche Verhandlungen. Best-in-Class Empfehlungen für den Verhandlungsdurchbruch. Springer Gabler, Wiesbaden, 2019; Johnson & Scholes, Exploring corporate strategy. Text and cases. Prentice Hall London, 1997).
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