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Edexcel IAL·Business·IAL Business

The External Environment

12 min read

PESTLE analysis, competition and how external factors beyond the firm's control affect business decisions.

Businesses operate within an external environment they cannot control but must respond to.

PESTLE analysis

  • Political: government policy, stability, trade rules.
  • Economic: growth, interest rates, inflation, unemployment, exchange rates.
  • Social: demographics, tastes, lifestyle changes.
  • Technological: automation, e-commerce, innovation.
  • Legal: employment, consumer and health-and-safety law.
  • Environmental: sustainability, climate, waste regulation.

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