PESTLE analysis is one of the most essential tools used in the business environment, and it was invented almost 63 years ago. It is an external environment analysis tool. The 1960s was the time of the booming of knowledge on strategic planning.
Francis J. Aguilar became a professor at Harvard Business School in 1964. And like other scholars, he was also on the same journey of exploring knowledge in strategic planning.
In 1967, Aguilar wrote the book Scanning the Business Environment, and he mentioned ETPS in the book, which is an acronym for Economic, Technological, Political, and Social Factors. Later, it was named PEST, an easy acronym to remember.
There were still many scholars and professionals who were exploring the knowledge of strategic planning. With time, other factors, such as environmental and legal factors, were added, and the PEST became PESTLE. Along the way, factors such as ethics and demographics were added, and it became PESTLEED.
PESTLE is the starting point of the analysis, and another form of analysis is carried out after the completion of it. It is helpful for corporations for strategic planning, but an entrepreneur can also use it to analyze the market and launch their product and service.
How often does the company need to do PESTLE analysis? Well, it depends. If a company is in the tech industry, it might have to do the analysis regularly, but if it is a transportation business, it might have to analyze in a year or two.
PESTLE analysis is entirely different from a SWOT analysis; SWOT analyzes the internal factors impacting the business, whereas PESTLE is used for external factors.
References:
Who Invented PEST Analysis And Why It Matters (pestleanalysis.com)
PESTEL analysis for strategic planning | BDC.ca
What Is a PESTLE Analysis? Factors, Examples, and Uses | Indeed.com
