TOPIC: Topic 1: Business Organization and Environment LESSON TITLE: PESTLE Analysis COMPETENCY FOCUS: Entrepreneurship (S4): To develop your entrepreneurial skills in preparing a realistic proposal for a new business start-up. You will understand the process a business will have to go through when starting up, including the underlying principles of starting a business.   [IB Learner Profile Development: Inquirer] Learning Objectives By the end of the lesson, you should be able to… LO1) Identify the external factors that affect a business LO2) Explain how each of the external factors has an effect on your focus business LO3) Evaluate how future changes in economic political, legal and social factors, may impact on the strategy of a business organisation. SMSC: You will assess the organisational culture of businesses in terms of fundamental structure, purpose and strategy development. CRITICAL THINKING KEY: Knowledge Application Analysis Evaluation

ANALYSIS OF EXTERNAL ENVIRONMENT PESTLE Analysis an acronym that stands for Political, Economic, Social, Technological, Legal and Environmental analysis. PESTLE analysis is a framework for systematically reviewing the main external influences on a business enterprise that may help or hinder its ability to meet its business objectives. =5

RESEARCH TASK By using secondary research methods, identify what each letter of the PESTLE Framework stands for and an explanation of what it involves. P E S T L E

P= POLITICAL Changes in government policy at both local, national and European level Local = council National= Prime Minister/Parliament Europe= European Parliament Political decisions affect people/business Taxes, interest rates, new laws, grants

E= Economic State of the economy affects business plans. I.e. unemployment, interest rates, recession, tax, exchange rates, inflation, GDP

S= Social Many changes take place in society over time: - Demographic - Changes in structure of population - Education - Household/families - Attitudes to work - Ethics - Religions

T= Technological Changes in innovation and technology that is available to businesses. If businesses offer a product that is technological, this may lead to shorter life cycles.

L= Legal Business must operate within the law. Failure to do this may lead to fines. Business need to keep on top of the changes to legislation. Examples?????

E= Evironmental Environmental factors are playing an increasing role in the operation of businesses. Legislation on emissions and pollution may influence production. The expectations of consumers about packaging and ingredients might affect marketing. Pressure groups can affect business decisions.

Mini-Task Independently, watch video and complete case study and activity at: http://preview.channel4learning.com/espresso/clipbank/html/lp_business_pest_ws1.html

Activity Prepare a PESTLE analysis for a foreign fashion retailer planning to set up a chain of shops for the first time in your country. [10] [30mins incl. research time]

Activity Prepare a PESTLE analysis for a foreign fashion retailer planning to set up a chain of shops for the first time in your country. [10] [30mins incl. research time]

Now, continue to write your business plan Contents of a Business Plan: Executive summary Description of the business Aims and objectives of the business The business opportunity The market Personnel/Staffing Buying/Production Premises/equipment Financial Forecasts/Accounts (including start-up finance)

Reflection Reflect on what you have learnt this lesson. What do you need to know more about?