We’re going very macro on this one. PESTLE analysis will help you make sense of the business context surrounding your product. SWOT works on product level, while PESTLE goes to the bird eye’s view.
As in SWOT, each letter of this acronym stands for one area of the macro environment that might affect your product. Here’s a list of those areas you should research. Once you have the insights, you can tag them as favorable (+), neutral (0) and negative (-) for you product.
PESTLE can also inform the external factors of your SWOT analysis.
Elements of PESTLE analysis:
- Political Factors: Consider the political landscape and government policies that may affect your product or industry. Analyze factors such as regulations, trade policies, tax laws, government stability, and political ideologies. Understand how these factors can influence market entry, product distribution, or business operations.
- Economic Factors: Assess the economic factors that can impact your product's success. Evaluate elements such as economic growth, inflation rates, exchange rates, consumer spending power, and employment levels. Understand how economic trends and fluctuations can affect demand, pricing, and market opportunities.
- Social Factors: Examine the social and cultural aspects that shape customer behavior and preferences. Consider factors like demographics, lifestyle trends, consumer attitudes, social values, and cultural norms. Identify shifts in societal attitudes or emerging consumer needs that may present opportunities or challenges for your product.
- Technological Factors: Evaluate the technological advancements and innovations that impact your industry. Look at factors such as emerging technologies, automation, digitalization, infrastructure, intellectual property rights, and data security. Understand how technology can disrupt or enhance your product and industry.
- Legal Factors: Assess the legal and regulatory factors that affect your product or industry. Consider laws, regulations, compliance requirements, intellectual property rights, product safety standards, and labor laws. Understand how these factors can influence product development, marketing, distribution, or any legal constraints on your business.
- Environmental Factors: Examine the environmental factors that can impact your product and industry. Consider factors such as climate change, sustainability, natural resource availability, environmental regulations, and consumer demand for eco-friendly products. Understand how environmental trends and concerns can shape consumer preferences and business practices.
If this sounds more like a management consultant’s work than product strategist’s, you’re 100% right. Still, this framework should guide your desktop research efforts. Instead of googling around hoping to stumble upon something, you know know what to look for.
And regarding management consultants, use their content as a source. Big Four and MBB provide valuable resources for free that can help you speed up this process.