How to Write a PESTLE Analysis (With Example)
Key takeaways
- PESTLE examines six external factors: Political, Economic, Social, Technological, Legal and Environmental.
- Focus on factors that actually affect the organization, and explain the impact of each one.
- PESTLE findings feed directly into the Opportunities and Threats of a SWOT analysis.
What each letter means (and questions to ask)
| Factor | What to look at | Questions to ask |
|---|---|---|
| Political | Government policy, stability, trade, tax policy | Are tariffs or subsidies changing? Is there political risk? |
| Economic | Inflation, interest rates, exchange rates, unemployment, consumer spending | Can customers afford the product? What do rates do to borrowing costs? |
| Social | Demographics, culture, lifestyle trends, health consciousness | How are customer values or behaviors shifting? |
| Technological | Automation, AI, digital adoption, R&D | Which technologies could disrupt or improve the business? |
| Legal | Employment law, consumer protection, data privacy (e.g., GDPR), health and safety | What laws raise costs or limit activities? |
| Environmental | Climate change, sustainability regulation, weather, resource scarcity | How do environmental pressures affect operations and reputation? |
How to write a PESTLE analysis step by step
- Choose the organization and market. PESTLE depends on the country and industry.
- Research each factor. Use government statistics, industry reports, reputable news and academic sources.
- Explain the impact. Don't just list "inflation is 4%". Explain what it means for the company: higher input costs and weaker consumer spending.
- Rate importance. Label each factor high, medium or low impact, and say whether it is an opportunity or a threat.
- Draw conclusions. Summarize the most important external factors and link them to strategy or a SWOT.
Short example: an electric scooter startup in the UK
- Political: government support for low-emission transport (opportunity)
- Economic: high interest rates make consumer financing more expensive (threat)
- Social: young urban commuters prefer flexible, green transport (opportunity)
- Technological: longer-lasting batteries lower operating costs (opportunity)
- Legal: changing rules on where e-scooters can be ridden (threat or opportunity)
- Environmental: net-zero targets increase demand for micromobility (opportunity)
Frequently asked questions
Is it PESTLE or PESTEL?
Both are correct. They contain the same six factors in a different order. Some courses use the shorter PEST analysis, which leaves out Legal and Environmental.
How long should a PESTLE analysis be?
Typically 800–1,500 words for an assignment, often with a summary table.
What's the difference between PESTLE and Porter's Five Forces?
PESTLE looks at the broad macro-environment. Porter's Five Forces looks at competition within an industry: rivalry, new entrants, substitutes, and buyer and supplier power.
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