PESTPESTEL

PESTPESTEL is a mnemonic device used to remember the eight key external factors that can influence an organization's performance. It is an expansion of the more common PESTEL analysis, adding two additional categories. The original PESTEL framework includes Political, Economic, Social, Technological, Environmental, and Legal factors. PESTPESTEL builds upon this by adding the dimensions of Physical and Personal.

The Political factor relates to government policies, regulations, and political stability that might impact business operations. Economic factors consider the broader economic environment, such as inflation rates, interest rates, economic growth, and exchange rates. Social factors encompass demographic trends, cultural norms, consumer attitudes, and lifestyle changes. Technological factors include advancements in science and innovation that can affect production, distribution, and product development. Environmental factors concern issues related to the natural world, such as climate change, pollution, and sustainability. Legal factors involve laws and regulations that businesses must adhere to, including employment law, consumer protection, and health and safety.

The additional 'P' factors in PESTPESTEL provide further depth. Physical factors consider the availability and impact of physical resources, infrastructure, and geographical considerations. Personal factors, sometimes referred to as Ethical or Philosophical, delve into the values, ethics, and personal beliefs that shape consumer behavior and organizational culture. By examining these eight interconnected areas, organizations can gain a comprehensive understanding of their external operating environment, enabling better strategic planning and risk management.