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PESTLE Analysis, Porter’s Five Forces Model, and Product Life Cycle

Home Articles PESTLE Analysis, Porter’s Five Forces Model, and Product Life Cycle

There are several tools and frameworks are present in order to monitor and evaluate the macro-environmental factors effectively. Some of the frameworks such as PESTEL analysis, Porter’s Five Forces Model, and product life cycle are discussed in this article.

PESTEL Analysiss

Political Factors:

These factors are related to how and to what extent the government can act as an intermediary in the economy or in a specific industry. This may include a government approach, political stability, tax policy, environmental law, corruption, trade restrictions, foreign trade policy etc.

Economic Factors:

The Economic factors are the exposure of a specific economy. These factors include financial development, commercial rates, expansion rates, interest rates, additional cash buyers, and unemployment rates. These elements can have an immediate or lasting impact on the organization, as it affects the intensity of buyers' powers and can change the supply / demand models in the economy.

Social Factors:

This applies to population patterns, such as the rate of population, the dispersion of age, health consciousness, the way of life and social limits. These elements are particularly important for advertisers, who focus on specific customers.

Technological Factors:

These factors are related to the progress in innovations that can have a positive or negative impact on the tasks of the company and the market. It refers to the technology innovations, the dimension of progress, mechanization, research and development (R & D), mechanical changes and the measurement of technological attention that the market has. These variables can affect the options to enter or not to enter in certain industries.

Environmental Factors:       

The Environmental factors have recently moved to the front line. These factors include natural and ecological points of view such as the climate, the atmosphere, the ecological environmental offset, and the environmental changes that can particularly affect industries such agriculture, tourism, farming, and insurance.

Legal Factors:

Despite the fact that these factors may have some overlap with the political factors, it includes specific laws, such as segregation rules, antitrust laws, commercial laws, and buyer safety rules, rights of author and patents, and welfare and safety provisions. Apparently, organizations must recognize what is and is not legal to trade effectively.

Porter’s Five Forces Model

Competitive Rivalry:

This looks at the quantity and quality of your rivals. What number of opponents do the organizations have? Who are they and how do they contrast their nature and management with theirs?

Supplier Power:

It determines the ease by which suppliers can increase their prices. In this, organizations determine the number of potential suppliers they have and how unique their products are?

Buyer Power:

At this point, it focuses on how easy it is for buyers to reduce costs. What is the number of buyers and how large are their demands? How much would it cost them to move from their affairs and administration to the opponent's services?

Threats of Substitution:

This refers to the likelihood that customers will find an alternative method to do what you do.

Threats of New Entry:

Your position may depend on the ability of individuals to enter your market. In this way, think about how this should be possible and how simple is it to get a solid foundation in your industry or market.

Product Life Cycle

Stages of Product Life Cycle:

Research and Development: Research and development of the product is required before it is made and available into the market.

Introduction: Launch the product into the market.

Growth: Sales are gaining higher growth at fastest rate.

Maturity: Sales are on highest but growth rate slows down.

Decline: Final stage where sales will began fall.


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