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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

Icelandic InternationalDevelopment Agency (ICEIDA)

Iceland

United Nations University FisheriesTraining Programme (UNU-FTP)

Iceland

Ministry of Fisheries andAquatic Resources (DFAR)

Sri Lanka

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Content

What is PESTLE analysis? What does PESTLE analysis include?

CasPestle summary: USA This is the preliminary data collection for a

Pestle analysis of the United States, drawn

from publicly available information onWikipedia, the CIA World Factbook andNationmaster. The United States has thelargest GDP in the world, $14.3 trillion. That's

almost as much as the next four on the list

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Learning objectives

After this lecture participants will be able toidentify and undertake PESTLE analysis

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PESTLE analysis

PESTLE is an analytical tool whichconsiders external factors and helpsyou to think about their impacts

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PESTLE analysis

Is a useful tool for understanding the bigpicture of the environment in which you areoperating

By understanding your environment, you cantake advantage of the opportunities andminimize the threats.

This provides the context within which moredetailed planning can take place to take fulladvantage of the opportunities that presentthemselves.

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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

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In contrast to a SWOT, PESTLE encouragesyou to think about the wider environment andwhat might be happening now and in the futurewhich will either benefit or be of disadvantage tothe organization, individual etc

a kind of radar which picks up trends anddevelopments in the external environment whichcan be used to inform longer term planning andstrategy making

PESTLE vs. SWOT

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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

PESTLE

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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, replacementtechnology/solutions, inventions, research, intellectual property issues, advancesin manufacturing

Transportation, energy uses/sources/fuels, associated/dependent technologies,rates of obsolescence, waste removal/recycling

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PESTLE Legal:

current home market legislation, future legislation European/international legislation regulatory bodies and processes environmental regulations, employment law, consumer protection

industry-specific regulations, competitive regulations

Environmental: Ecological environmental issues, environmental regulations customer values, market values, stakeholder/ investor values management style, staff attitudes, organizational culture, staff engagement

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It is possible to use the PESTLE analysis on projectsas well for organizations

It is not always needed, especially if the projects aresmall

If PESTLE analysis is used for a project, then thefocus should be on solving the focal problem andanalyze how the external environment is affecting the

process of solving the focal problem

e.g. the guidelines from the European Commission do notinclude PESTLE in their logical framework approach

PESTLE analysis and projects

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The main problem with these external PESTLE factors isthat they are continuously changing

Therefore PESTLE analysis should include a thoroughanalysis of what is affecting the organization or a projectNow , 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 aproject However, by themselves, theses factors they mean very little It is important to bear in mind, that PESTLE analysis requires

careful Application of results

Issues of concern

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Other forms of PEST - PESTLE, PESTLIED, STEEPLE and

SLEPT:Some people prefer to use different flavors of PEST analysis, usingother 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

Similar analysis

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PESTLE analysis

post harvest losses

Following is a case study of PESTLE analysison post harvest losses (PHL)

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P ESTLE

Political factors - PHLImportanceIncreasing >Unchanged =Decreasing <

Low political interest among the general public and thereforelittle 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 onpost harvest losses Frequent changes in policy due to rapid changes in politicallyelected authorities within the government affecting stability of practical resolutions Possibilities for fishermen- and vessel owner associations to

influence future policy making and contributing to politicaldecisions

International agreements e.g. IOTC

>

>

=

>

=

>

>

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P ESTLE

Economical factors - PHLImportanceIncreasing >Unchanged =Decreasing <

Low average catches affect fishermens incomes and availabilityof capital to invest in improvements Low purchasing power among a large group of customers in thedomestic market Limited knowledge in financial accounting affects operation of small and medium sized fishermens businesses

The ongoing conflict in Sri Lanka affects governmentalexpenditures and decreases the possible funding of developmentin the fisheries sector The tsunami disaster had severe effect on the Sri Lankanfisheries sector e.g. on development and capacity

>

=

>

>

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

.

>

>

=

>

>

Unchanged =Decreasing <

Lack of infrastructure (e.g. facility, machinery, tools, practices) Inferior boat design Inferior harbor design

Insufficient availability of freezing facilities Inadequate processing facilities Selectivity of fishing gear (i.e. gillnets) Lack of technological improvements (e.g. freezers, insulatingboxes etc.)

Lack of proper hygienic practices

Inadequate transport facilities

>

>

>

>>

=

>

>=

PES T LE

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Legal factors - PHLImportanceIncreasing >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

>

>

>

>>

>

>

=

PEST LE

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Environmental factors - PHLImportanceIncreasing >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 tendsto increase

>

=

>

>=

>

=

=

PESTL E

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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 2 nd of June 2007 from:http://www.rapidbi.com/created/the-PESTLE-analysis-tool.html