At some point in either your student or professional career you may and probably will have to make a P.E.S.T.E.L. (or any variation of the acronym) analysis in order to understand very important information pertaining to your business, either in a realistic situation or in an educational scenario.
First of all, what does P.E.S.T.E.L.I. stand for?
P, stands for political.
Why do we care?
[[ Whether you are deciding on opening a business at home or abroad, you must be aware of the political situation. For example, you may have a paper to write for one of your classes. The topic is to decide which country you would like to expand your business to. You don't do a P.E.S.T.E.L. You choose Cuba as your country. You then look like an ass. Why? Because if you had done your P.E.S.T.E.L., you would see that Cuba is a communist state. It may be hard to enter into a market that has a communist regime, don't you think?
This is a very basic example for a very important aspect of the P.E.S.T.E.L. Remember that when you are focusing on the P., of the P.E.S.T.E.L., you focus on the political regime and its regulators in relation to your particular business. You see how stable the situation is in the particular country as well as whether or not the information in the political aspects has relevance to your business. Don't focus on information that is useless! Not so hard so far, right?
E, stands for Economic.
Why do we care?
We study business right? Well, people having money to spend may, just may, be important to us. If we are going to open a business, realistically or hypothetically, we need to see whether the area, city, state, or country has the ability to give you money. Here we focus on G.D,P's, average household incomes, value of currency, industry trends, anything that has to do with $$$.
Example, (because we all love examples) if I want to open a branch in the real estate market in the United States today, it may be a bad idea. I might have to do a P.E.S.T.E.L. to realize that interest rates are terribly high, people are losing their homes, and the country is about to go into a recession. This information, once again, may be important to us. So far, so good!
S, stands for social.
Isn't this a fluffy aspect to look at. Social sounds cute doesn't it. Cute, it may be, but also very important when deciding to open a business. When we look at the social situation in a country we see whether or not our product or service would be accepted and successful in a particular area.
Example, If I decide to sell guns in Massachusetts, I may not be very successful. The second ammendment isn't really focused upon there. If I decide to sell guns in Texas though, I probably will have a much more successful outcome. This is one small aspect of the Social section of a P.E.S.T.E.L. Here we focus on culture, demographics, change, etc. It is very important to relate this area to your specific product or service. If you want to introduce a new car in a particular area, it is irrelevant whether the national passtime is playing football. Stick to the relevant ideas and you'll be fine.
T, means Technology
Why do we care?
Maybe it's just me, but this day and age technology seems to play an important role in every day life. The level of technology that is available to an area of your choice should be taken into consideration. You should already know I'm going to give you an example.
If you want to sell cell phones in China with the technology that is available in Europe, you may run into some problems. You see, Chinas technology, in reguards to cell phones, is far beyond the technology that has been developed in Europe. In the technology aspect of a P.E.S.T.E.L., you focus on the level of technology that is present in your area, meaning, how advanced is the area you are choosing? Do they send letters through the mail or do they email? Do they hand write or do they type? These are are few suggestions in determining what to focus on in this section. As always, you add information relevent to your product or service!
E, means Environment
Why do we care?
Are we talking about bunnies and bears? No! We are talking about things like clean water and air. Can I build a factory there without having Greenpeace up my butt? You understand where I'm going with this, right?
In the Environment section of the P.E.S.T.E.L. you focus on environmental issues relevant to your business. As stated before, having clean air and water might help my employees while they are working. Once again, if the manatee is endangered there, it probably isn't important, unless I decide to open a factory that dispenses toxins into the water where manatees live. This isn't that hard, I'm sure you'll do fine understanding what to put in this section.
L, stands for legal or legistative.
Why do we care?
This is the section that keeps the police out of our backyard and ourselves out of court proceedings. Depending on what business you are in and where, you must be fully aware of the legal situation there. You must know all the legislation in order to keep yourself from breaking the law.
Example, If you are doing business in a muslim nation, and you are not aware of the laws pertaining to Sharia, you just might run into problems. As in every other section of the P.E.S.T.E.L. you focus on legislation that pertains to you or your business.
Under normal circumstances you would be done with this analysis, but I have had the joy of an instructor who added another letter. Just in case you also run into an instructor who also feels this letter to be important, or if you would like to be more in depth for your business this letter is for you!
I, stands for Infrastructure.
What is Infrustructure? Picture a city. The roads, the water and sewer pipes, the telephone, cable, and electric wires, on and on and on, is the infrustructure.
Why do we care?
Here is a beloved example. If I want to introduce cable television and internet to Greece, I will, not may be, run into a problem. You see, Greece's infrustructure does not contain cable lines suitable to withstand full cable television and internet.
This is a small example of many that could be given that makes the infrustructure section of the P.E.S.T.E.L. very important. If your business requires trucks to deliver you supplies, make sure the area has roads! If you want a call center, make sure there are telephone lines!
This my friends, is a full P.E.S.T.E.L.I. analyis and how it is applied. I pray, nobody still has questions and hopefully this helped some of you. ]]
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First of all, what does P.E.S.T.E.L.I. stand for?
P, stands for political.
Why do we care?
[[ Whether you are deciding on opening a business at home or abroad, you must be aware of the political situation. For example, you may have a paper to write for one of your classes. The topic is to decide which country you would like to expand your business to. You don't do a P.E.S.T.E.L. You choose Cuba as your country. You then look like an ass. Why? Because if you had done your P.E.S.T.E.L., you would see that Cuba is a communist state. It may be hard to enter into a market that has a communist regime, don't you think?
This is a very basic example for a very important aspect of the P.E.S.T.E.L. Remember that when you are focusing on the P., of the P.E.S.T.E.L., you focus on the political regime and its regulators in relation to your particular business. You see how stable the situation is in the particular country as well as whether or not the information in the political aspects has relevance to your business. Don't focus on information that is useless! Not so hard so far, right?
E, stands for Economic.
Why do we care?
We study business right? Well, people having money to spend may, just may, be important to us. If we are going to open a business, realistically or hypothetically, we need to see whether the area, city, state, or country has the ability to give you money. Here we focus on G.D,P's, average household incomes, value of currency, industry trends, anything that has to do with $$$.
Example, (because we all love examples) if I want to open a branch in the real estate market in the United States today, it may be a bad idea. I might have to do a P.E.S.T.E.L. to realize that interest rates are terribly high, people are losing their homes, and the country is about to go into a recession. This information, once again, may be important to us. So far, so good!
S, stands for social.
Isn't this a fluffy aspect to look at. Social sounds cute doesn't it. Cute, it may be, but also very important when deciding to open a business. When we look at the social situation in a country we see whether or not our product or service would be accepted and successful in a particular area.
Example, If I decide to sell guns in Massachusetts, I may not be very successful. The second ammendment isn't really focused upon there. If I decide to sell guns in Texas though, I probably will have a much more successful outcome. This is one small aspect of the Social section of a P.E.S.T.E.L. Here we focus on culture, demographics, change, etc. It is very important to relate this area to your specific product or service. If you want to introduce a new car in a particular area, it is irrelevant whether the national passtime is playing football. Stick to the relevant ideas and you'll be fine.
T, means Technology
Why do we care?
Maybe it's just me, but this day and age technology seems to play an important role in every day life. The level of technology that is available to an area of your choice should be taken into consideration. You should already know I'm going to give you an example.
If you want to sell cell phones in China with the technology that is available in Europe, you may run into some problems. You see, Chinas technology, in reguards to cell phones, is far beyond the technology that has been developed in Europe. In the technology aspect of a P.E.S.T.E.L., you focus on the level of technology that is present in your area, meaning, how advanced is the area you are choosing? Do they send letters through the mail or do they email? Do they hand write or do they type? These are are few suggestions in determining what to focus on in this section. As always, you add information relevent to your product or service!
E, means Environment
Why do we care?
Are we talking about bunnies and bears? No! We are talking about things like clean water and air. Can I build a factory there without having Greenpeace up my butt? You understand where I'm going with this, right?
In the Environment section of the P.E.S.T.E.L. you focus on environmental issues relevant to your business. As stated before, having clean air and water might help my employees while they are working. Once again, if the manatee is endangered there, it probably isn't important, unless I decide to open a factory that dispenses toxins into the water where manatees live. This isn't that hard, I'm sure you'll do fine understanding what to put in this section.
L, stands for legal or legistative.
Why do we care?
This is the section that keeps the police out of our backyard and ourselves out of court proceedings. Depending on what business you are in and where, you must be fully aware of the legal situation there. You must know all the legislation in order to keep yourself from breaking the law.
Example, If you are doing business in a muslim nation, and you are not aware of the laws pertaining to Sharia, you just might run into problems. As in every other section of the P.E.S.T.E.L. you focus on legislation that pertains to you or your business.
Under normal circumstances you would be done with this analysis, but I have had the joy of an instructor who added another letter. Just in case you also run into an instructor who also feels this letter to be important, or if you would like to be more in depth for your business this letter is for you!
I, stands for Infrastructure.
What is Infrustructure? Picture a city. The roads, the water and sewer pipes, the telephone, cable, and electric wires, on and on and on, is the infrustructure.
Why do we care?
Here is a beloved example. If I want to introduce cable television and internet to Greece, I will, not may be, run into a problem. You see, Greece's infrustructure does not contain cable lines suitable to withstand full cable television and internet.
This is a small example of many that could be given that makes the infrustructure section of the P.E.S.T.E.L. very important. If your business requires trucks to deliver you supplies, make sure the area has roads! If you want a call center, make sure there are telephone lines!
This my friends, is a full P.E.S.T.E.L.I. analyis and how it is applied. I pray, nobody still has questions and hopefully this helped some of you. ]]
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By Maria
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