Pestel Analysis

PESTEL Analysis

Political

Economical

Sociological

Technological

Environmental

Legal



A PESTEL analysis allows a business to look at the external factors that impact or may impact the business. Each sector of the PESTEL analysis applies to different businesses in different ways, for example, a packaging manufacturer may look more at environmental factors for their business. whereas, a supermarket would look more at the technological and economic factors.



Brexit may affect creative businesses, this is because a lot of small creative business use companies from abroad to buy supplies, this is because it is sometimes cheaper to do this than to order from a company in the UK. However, prices may go up when the UK leaves the EU meaning that the smaller businesses may be forced to put their prices up, this has a knock-on effect because they then lose customers who don’t want to pay higher prices.

Cultural policy- what is currently happening in the UK

Political- Brexit is an issue that will affect a lot of businesses in the UK, especially creative businesses. This is because there will be a lot more issues with travelling to European countries which could affect filming industries who may travel for short amount of time because it is currently hassle free.

Economical- An economical issue that could affect creative businesses could be funding, because some projects may seem like they won’t make any money back, it may be more difficult to get funding from banks.

Sociological- social media will have a huge impact on creative industries, this is because small businesses can use it to advertise and receive feedback on their products or services. However, because the site is so widely used, it can mean that there is more competition and some reviews can be very detrimental to small businesses.

Technological- Technology can have many great advantages to businesses and can mean that they can produce faster, and more accurate work. However, a bigger company will be able to afford better technology meaning that they can sell each product or service cheaper. This will badly affect smaller businesses because they won’t be able to keep up with larger businesses or sell their products or services any cheaper or they won’t make any money. This in turn can put them out of business. The way the consumer communicates to the business has also changed, communication used to be very formal and done by the use of email, letter or phone call. Whereas, social media is becoming more popular to use to communicate such as leaving comments on pictures, or messaging the company directly, or even facetiming in some businesses. These can also be done as an way to make the customer feel more special because they feel like the company is listening to them, and also because it takes less time to send a quick message than sending an email which can be quite formal.

Environmental- There are many environmental issues currently affecting the UK, climate change is one of them. There are many protesters in and around main cities in the UK targeting different businesses who may not be doing their best to help the environment. This can make for a lot of bad publicity and possibly put some businesses in a very vulnerable position because they are being directly targeted. Some businesses may not be able to afford to put measures in place to combat these issues and therefore they may lose customers.

Legal- Many legal issues affect all businesses, this can be policies that protect consumers or employees. Some measures that are put in place take away certain ways that a business may have been able to take a shortcut in order to save money. This is good for the consumer or the employees because it means that they will be safer. However, these cost businesses money, and the upkeep of certain things such as safety measures continuously cost money. For large businesses this will mostly go unnoticed. But for smaller businesses these implements would cost a lot of money.