An external analysis of a company is another indicator for making strategic decisions. External factors are the general environment of an industry that strategic leaders most likely will not be able to influence. There are six external factors for a PESTEL analysis that influence all firms in a given industry. The PESTEL model groups these segments as: political, economic, sociocultural, technological, ecological and legal.
Review the following article:
- Scanning the Environment: PESTEL AnalysisÂ (link below)
Explore the six PESTEL external factors: political, economic, sociocultural, technological, ecological, and legal.
Choose one industry (automotive, hospitality, manufacturing, high tech, etc.) and discuss the following with your peers:
- Examine one of the six PESTEL factors in relation to your chosen industry. In your opinion, why do you believe this PESTEL factor is the most important to your chosen industry?
- Describe one advantage and disadvantage of the PESTEL analysis for strategic planning.
- If you were a manager in a global organization, how would you use the technological factor of innovation to gain a competitive advantage?
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