What Is a PESTEL Analysis For, and How Do You Actually Do It?

When the war in Ukraine broke out, all the companies that had a significant part of their business in Russia went through a very difficult situation. But unfortunately, what happened was “unpredictable,” and the only thing they could do was respond to the emergency.

But is that really true?

Absolutely NOT — or rather, not for all companies.

Why were some companies able to manage the situation better than others, reacting more quickly, limiting their losses, and recovering sales in other markets?

The reason is simple: they had a better understanding of the external environment — what happens outside the company — which allowed them to detect danger earlier than others and implement preventive actions.

To identify and evaluate information from the external environment — elements not directly connected to your business but which may have a significant impact on it — there is a very important but underused model: the PESTEL model,

PESTEL is an acronym formed from the initial letters of the areas you need to analyze to understand the external environment in which your company operates: Political, Economic, Social, Technological, Environmental, Legal..

Due to space limitations, I won’t go into detail about each of these areas here — a quick Google search will give you many articles explaining what a PESTEL analysis is.

What you’ll have a harder time finding is the answer to this question: How do you actually DO a PESTEL analysis?

That’s what I want to talk about in this newsletter.

To develop a PESTEL analysis for the key foreign markets in your internationalization strategy, follow these 6 steps:

1. Define, for each PESTEL category, the indicators that could impact your business.
2. Identify the sources where you can find information for each indicator.
3. Periodically assess — at least once a year — situazione attuale the current situation for each indicator.
4. Hypothesize how each indicator might evolve over time relative to the current situation. evolvere nel tempo ciascun indicatore rispetto alla situazione attuale
5. Evaluate the likelihood that this evolution will occur. probabilità che questa evoluzione si verifichi
6. Assess what impact this development could have on your business in that country. impatto potrà avere il verificarsi dell’evento sul tuo business in quel paese

Keeping an updated database with this information will allow you to build possible scenarios to make more informed decisions and prepare contingency plans that will help if adverse events occur. contingency plan che ti saranno utili nel caso in cui si avverassero gli eventi avversi.

If you’d like to learn more about PESTEL analysis or receive the Excel file for ChannelMarketing’s PESTEL database, write to me at: pierantonio.gallu@channelmarketing.it

Click here http://bit.ly/4envRnO and download the GOABROAD Blueprint canvas, a one-page tool that will guide you in applying the GOABROAD©^© method to take control of your internationalization strategy!

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