1. PESTLE analysis
Project Cycle Management
-----
A short training course in project cycle management for
subdivisions of MFAR in Sri Lanka
MFAR, ICEIDA and UNU-FTP
Ministry of Fisheries and Icelandic International United Nations University Fisheries
Aquatic Resources (DFAR) Development Agency (ICEIDA) Training Programme (UNU-FTP)
Sri Lanka Iceland Iceland
2. Content
• What is PESTLE analysis?
• What does PESTLE analysis include?
• Case study on post harvest losses.
4. PESTLE analysis
• PESTLE is an analytical tool which
considers external factors and helps
you to think about their impacts
5. PESTLE analysis
• Is a useful tool for understanding the “big
picture” of the environment in which you are
operating
• By understanding your environment, you can
take advantage of the opportunities and
minimize the threats.
• This provides the context within which more
detailed planning can take place to take full
advantage of the opportunities that present
themselves.
6. The factors in PESTLE analysis
• P – Political
– The current and potential influences from political pressures
• E - Economic
– The local, national and world economic impact
• S - Sociological
– The ways in which changes in society affect the project
• T - Technological
– How new and emerging technology affects our project / organization
• L - Legal
– How local, national and global legislation affects the project
• E - Environmental
– Local, national and global environmental issues
7. PESTLE vs. SWOT
• In contrast to a SWOT, PESTLE encourages
you to think about the wider environment and
what might be happening now and in the future
which will either benefit or be of disadvantage to
the organization, individual etc
– a kind of radar which picks up trends and
developments in the external environment which
can be used to inform longer term planning and
strategy making
8. PESTLE
• Political:
– Government type and stability
– Freedom of the press, rule of law and levels of bureaucracy and corruption
– Regulation and de-regulation trends
– Social and employment legislation
– Tax policy, and trade and tariff controls
– Environmental and consumer-protection legislation
– Likely changes in the political environment
• Economic:
– Stage of a business cycle
– Current and projected economic growth, inflation and interest rates
– Unemployment and supply of labor
– Labor costs
– Levels of disposable income and income distribution
– Impact of globalization
– Likely impact of technological or other changes on the economy
– Likely changes in the economic environment
9. PESTLE
• Sociological:
– Cultural aspects, health consciousness, population growth rate, age distribution,
– Organizational culture, attitudes to work, management style, staff attitudes
– Education, occupations, earning capacity, living standards
– Ethical issues, diversity, immigration/emigration, ethnic/religious factors
– Media views, law changes affecting social factors, trends, advertisements,
publicity
– Demographics: age, gender, race, family size
• Technological:
– Maturity of technology, competing technological developments, research funding,
technology legislation, new discoveries
– Information technology, internet, global and local communications
– Technology access, licensing, patents, potential innovation, replacement
technology/solutions, inventions, research, intellectual property issues, advances
in manufacturing
– Transportation, energy uses/sources/fuels, associated/dependent technologies,
rates of obsolescence, waste removal/recycling
11. PESTLE analysis and projects
• It is possible to use the PESTLE analysis on projects
as well for organizations
• It is not always needed, especially if the projects are
small
• If PESTLE analysis is used for a project, then the
focus should be on solving the “focal problem” and
analyze how the external environment is affecting the
process of solving the “focal problem”
– e.g. the guidelines from the European Commission do not
include PESTLE in their logical framework approach
12. Issues of concern
• The main problem with these external PESTLE factors is
that they are continuously changing
• Therefore PESTLE analysis should include a thorough
analysis of what is affecting the organization or a project
Now, and what is likely to affect it in the Future
• The result of a PESTLE analysis is usually a list of
positive and negative factors that are likely to affect a
project
– However, by themselves, theses factors they mean very little
– It is important to bear in mind, that PESTLE analysis requires
careful Application of results
13. Similar analysis
• Other forms of PEST - PESTLE, PESTLIED, STEEPLE and
SLEPT:
Some people prefer to use different flavors of PEST analysis, using
other factors for different situations. The variants are:
• PESTLE/PESTEL: Political, Economic, Sociological, Technological,
Legal, Environmental;
• PESTLIED: Political, Economic, Social, Technological, Legal,
International, Environmental, Demographic;
• STEEPLE: Social/Demographic, Technological, Economic,
Environmental, Political, Legal, Ethical; and
• SLEPT: Social, Legal, Economic, Political, Technological
14. PESTLE analysis
post harvest losses
• Following is a case study of PESTLE analysis
on post harvest losses (PHL)
15. Importance
Political factors - PHL Increasing >
Unchanged =
Decreasing <
• Low political interest among the general public and therefore >
little or no pressure on government
• Low political pressure from fishermen and boat owners >
• Low interest among politicians
=
• High interest among government to improve the situation on
>
post harvest losses
• Frequent changes in policy due to rapid changes in politically
elected authorities within the government affecting stability of =
practical resolutions
• Possibilities for fishermen- and vessel owner associations to
influence future policy making and contributing to political >
decisions
• International agreements e.g. IOTC >
PESTLE
16. Importance
Economical factors - PHL Increasing >
Unchanged =
Decreasing <
•Low average catches affect fishermen’s incomes and availability >
of capital to invest in improvements
• Low purchasing power among a large group of customers in the =
domestic market
• Limited knowledge in financial accounting affects operation of >
small and medium sized fishermen’s businesses
• The ongoing conflict in Sri Lanka affects governmental >
expenditures and decreases the possible funding of development
in the fisheries sector
• The tsunami disaster had severe effect on the Sri Lankan <
fisheries sector e.g. on development and capacity
PESTLE
17. Importance
Sociological factors - PHL Increasing >
Unchanged =
Decreasing <
.
• Acceptance of low quality fish >
• Lack of awareness >
• Food safety and health problems due to low fish quality =
• The attitude of fishermen
>
• Lack of specialized education among fishermen >
• Religious sentiments affecting industrial practices <
PESTLE
19. Importance
Legal factors - PHL Increasing >
Unchanged =
Decreasing <
• Lack of regulations, monitoring and enforcement on: >
– Quality standards >
– Food safety >
– Hygiene standards >
– Fish handling
>
– Illegal inland fishing
>
• Regulations in foreign export markets (e.g. EU, USA and Japan)
>
• General trade agreements and tariffs
=
PESTLE
20. Importance
Environmental factors - PHL Increasing >
Unchanged =
Decreasing <
• Insufficient availability of clean water >
• Tropical weather conditions =
• Pollution in harbor basin water >
• Lack of adequate sewage management >
• Oil spills in harbors =
• Hygienic conditions onboard boats and in harbors >
• Sustainability of fish stocks =
• Stock size. When stocks are large and catches good, PHL tends =
to increase
PESTLE
21. References
• Renewal Associates (2003). PESTEL Analysis.
Downloaded 18. mars 2007 from:
www.renwal.eu.com
• Rapidbi (2007). The PESTLE Analysis Tool and
Template. Downloaded the 2nd of June 2007 from:
http://www.rapidbi.com/created/the-PESTLE-
analysis-tool.html
Hinweis der Redaktion
The factors in a PESTLE analysis are: Political Environmental Social Technological Legal Economic
Here we have examples - the list can change depending on the project or focal problem (We should not read out every items on this list, the participants can take a better look at it themselves, because we will focus on our case study)
Here we have to mention that we used PESTLE when we analysed the case study for Post Harvest Losses. It proved to be very helpful for us, especially when we had to analyse factors that were NOT included in the SWOT (Internal - External factors) The PESTLE analysis helped us as well when we had to define the most serious problems in the problem analysis and risks or assumptions in the logframe By doing PESTLE we are scoping through many important factors that can affected our subject/program/program or institution (??? I do not understand this sentence). This might prove to be very important when you sit down with team-members in international groups or teams, then the local counterparts will become more conscious of factors that are so normal for them that they can be overlooked, an very important for the external partners to analyse and get introduced (critically) to the environment that they are going to work in. By doing both PESTLE and SWOT you will increase the overview of the dynamics of you project
If you take a look at the Case Study on Post Harvest Losses you can see that there is a column which describes the importance in time “ Importance” - Increasing > - Unchanged = - Decreasing <
