Introduction
Environmental Scanning is one of the tools and phases used in the strategic planning of an organization. There are many tools such as the PESTLE analysis, SWOT analysis, Porters Five Forces analysis and others. This paper provides an interview and discussion on PESTLE analysis.
Interview for PESTLE Analysis
The interview was conducted with John Doe who is a business analyst for my organization. John is responsible for the strategic planning and looks after the planning, research, business intelligence and implementation.
Myself: Hello John, can you please tell me about Strategic Planning.
John: Strategic planning is very important for an organization to achieve its short term and long term business goals. Marx. (2006) has suggested that the strategic planning process is made up of different phases such as Mission, Objectives, Environmental Scanning, Strategy Formulation, Implementation and Control. These activities have to run one by one and results from one phase are taken as inputs for the next phase.
Myself: Can you please tell about Environmental Scanning.
John: Cook (1990) has suggested that Environmental Scanning is the process of getting an understanding of the business environment in which the company operates. What we attempt in this phase is to define and understand the internal and external forces like market size, political situation, technology impacts, weakness that our company faces, etc. Identifying these forces helps to understand how our company is placed, what are the market forces that it must overcome.
Myself: Can you tell about PESTLE analysis.
John: PESTLE analysis is a tool that gives an understanding and scanning of the macro environmental forces in which the company operates. There are six factors in this tool and they are: Political, Economic, Social, Technological, Legal and Environmental.
Myself: Can you please elaborate on each.
John: In PESTLE analysis, the Political factor relate to factors such as government rules and regulations, tax policies, employment and labour laws, trade restrictions and tariffs, political stability, etc. of a region. Economic factors refer to the purchasing power of the target customers and include factors such as the economic growth, interest rates and exchange rates, rate of inflation, etc. Social factors are the demographic factors and the cultural factors that may impact the organization. These include health consciousness, population growth rate, ethnic distribution, career attitudes, etc. Technology factors include factors such as the technology of competing products and companies, how quickly the technology changes, R&D facilities required, etc.
There are two other factors that are optional and these are the Legal and the Environmental factors. Legal factors include the legal hurdles that organizations may face such as lawsuits, litigation, legal liability, etc. Environmental factor includes the impact of the organizations activity on the environment.
Myself: How exactly does PESTLE analysis help.
John: PESTLE analysis is very helpful so if an organization wants to introduce a new car model, it has to see what are the political restrictions or encouragement in the form of tax and other liabilities. The economic factor would let us know if people have the money to buy the product, Social would let us know if cars are regarded as a utility vehicle or as a status symbol. Technology factors would help us to know the technology that other car manufacturers provide. Legal factors help us to know of any legal hurdles that we have to cross while environmental factors would help to understand factors such as pollution, emission norms required, etc.
Myself: Thanks John for your help.
References
Cook, William J. 1990. Strategic Planning for America’s Schools. American Association of School Administrators. ISBN: 0876521324.
Marx. 2006. Future Focused Leadership. ASCD Publications. ISBN: 1416602194.