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Edexcel ·Business·Cambridge AS & A Level Business

The External Environment

14 min read

PESTLE analysis, the impact of economic, political-legal, social, technological and environmental factors, and the difference between controllable and uncontrollable influences.

The external environment

Businesses operate within an external environment they cannot control. The PESTLE framework organises these influences:

    Political — government stability, trade policy, taxation, subsidies.
    Economic — growth, inflation, interest rates, exchange rates, unemployment.
    Social — demographics, tastes, lifestyle, attitudes.
    Technological — automation, e-commerce, new products and processes.
    Legal — employment, consumer protection, competition and health & safety law.
    Environmental — climate change, sustainability, waste and emissions.
BUSINESS Political Economic Social Technological Legal Environmental
PESTLE: six external forces acting on the business, each largely uncontrollable.

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