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PESTEL analysis is the mechanism used by the sellers to evaluate the macro-economic elements which immediately affect the business. PESTEL evaluation is made of political, economical, social, technological, environmental and legal elements. PESTEL evaluation explains the macro-economic elements consumed in detailed examination of environment which are the units of strategic management. It is utilized to learn about the market development, control, capacity of operation, and business reputation in the market.
Political elements are connected to the government intervention in the economy which has a direct influence on the organization. Examples of political elements are environmental law, labor law, tariffs, Trade restrictions and tax policy. Economic elements are expressed by interest rate, inflation rate, exchange rate, and economic development. Modifications in such rates have the huge influence on the functions of organization and decision-making authority. Social element is made of culture, population growth rate, age distribution, health consciousness and career attitudes. Technological elements include automation, the rate of technological, technological incentives, and Research and development tasks. Environmental elements include environmental features for example weather, climatic change and ecological balance which can impact few particular industries like tourism, insurance, and farming. Legal elements are made of consumer law, employment law, discrimination law, antitrust law and health and safety law.
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