Pestel for Estee Lauder

PESTEL Analysis for Estee Lauder:
PESTEL analysis is the external analysis of the different macro-environmental factors that a business must consider. Kotler (1998)The PEST analysis is a useful tool for understanding the position, potential and direction for a business as well as the market growth or decline.

“The radical and ongoing changes occurring in society create an uncertain environment and have an impact on the function of the whole organization” Tsiakkiros, (2002). Hence the analysis of the macro-environment is very important to identify factors which could affect various variables and arrangements within the organisation.

Macro-environmental analysis assist Estee Lauder management to increase its attentiveness of appropriate environmental changes thus improve strategic planning by enriching its industrial and market analysis. The PESTEL analysis in addition to Porter’s Five Force model and SWOT can be applied by an organization to review its strategic direction. These have been discussed below.

Political factors
The political environment within which an organisation exists has far reaching consequences. The political environment most obviously operates at National level, but may also be significant at local and international levels. Estee Lauder gives direction to countries through the way they exert control over the economy. Estee Lauder should not only be cognisant with the politics of a country, but also with the media, industry and labour leaders. The following political factors can affect the business environment:

Level of government involvement in business




Co-operation and integration, e.g. EU

Economical factors
This is concerned with the nature and direction of the economy in which a firm operates. Estee Lauder looks at the interplay of market forces that dictate the state of the economy and implications on both commercial and non-commercial organisations. Prices vary from brand to...