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We recommend Emotional branding, or the Lovemarks theory Why do companies nee PESTEL analysis? Changes that are constantly taking place in the external environment of the company are associate with the emergence of opportunities as well as threats. The PESTEL analysis allows you to see them. For example, opportunities may come from new technologies that will help the company reach new customers – a new target audience means more profits. An opportunity for the company may be the emergence of new sources of financing that allow it to invest in better equipment.

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Another is a change government policy that opens up new markets. Threats, on the other hand, may include deregulation, which exposes the company to increase competition. A shrinking market or interest rate hikes can cause problems if a company is phone number list burdene with debt or struggling with cash flow. PESTEL analysis is a simple and widely use tool that helps to analyze political, economic, socio-cultural, technological, environmental and legal changes in the business environment. Because it takes a broader perspective, it helps you understand the power of change a company is expose to.

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Thanks to this, the company can take advantage of the opportunities create by changes and prepare for possible threats. Community blog Keeping your finger on the pulse is also an appropriate communication strategy that can be implemente at EU Phone Number the right moment if the next steps are foreseen. PESTEL analysis is often linke to SWOT analysis, however the two tools have different areas of focus. The former looks “from a broad perspective” on those factors that may influence a company’s decisions, the market or a potential new business. In turn, the SWOT analysis examines these factors at the business, product line or product level.