pestel-analysis

Purpose

Conduct a systematic analysis of macro-environmental factors—Political, Economic, Social, Technological, Environmental, and Legal—that could impact your product or project. Use this to identify external opportunities and threats, inform strategic planning, assess market entry risks, and make data-driven decisions about product direction in the context of broader forces beyond your control.

This is not internal analysis—it's outward-facing assessment of the big-picture forces shaping your product's environment.

Input

Works best with: The product, market, or strategic decision the analysis should serve. Also useful: Geography, time horizon, and which forces you already suspect matter most.

Anything supplied with the invocation itself — text after the skill name, a pasted context dump, or an appended ARGUMENTS: line — counts as answers already given. Use it and skip whatever it covers; don't re-ask.

Arriving empty-handed? That works too. The skill asks what product/market and geography to analyze before scanning the six forces — an unanchored PESTEL is a trivia exercise.

Example invocation: PESTEL for launching our telehealth platform in Germany over the next 18 months.

Key Concepts

The PESTEL Framework

Originating from Francis Joseph Aguilar's 1967 PEST analysis, PESTEL extends the framework to six categories:

1. Political: Government policies, stability, trade regulations, taxation
2. Economic: Growth rates, inflation, exchange rates, consumer spending
3. Social: Demographics, cultural trends, lifestyle changes, consumer attitudes
4. Technological: Advancements, R&D, automation, digital transformation
5. Environmental: Climate change, sustainability, resource scarcity, regulations
6. Legal: Compliance, IP rights, employment laws, health/safety regulations

Why This Works

• Comprehensive: Covers all major external forces affecting your product
• Proactive: Identifies threats and opportunities before they become critical
• Strategic: Informs long-term planning, not just tactical decisions
• Risk management: Highlights vulnerabilities in your product strategy

Anti-Patterns (What This Is NOT)

• Not competitive analysis: PESTEL looks at macro factors, not competitors
• Not internal analysis: Focuses on external environment, not your company's strengths/weaknesses
• Not static: Macro environment changes—reassess regularly

When to Use This

• Entering a new market or geography
• Strategic planning (annual roadmapping, 3-5 year planning)
• Assessing product viability in a changing environment
• Risk assessment for new product initiatives
• Pitching to execs or investors (shows environmental awareness)

When NOT to Use This

• For tactical, short-term decisions (use competitive analysis instead)
• When external factors are stable and well-understood
• As a substitute for customer research (PESTEL is macro, not micro)

Application

Use template.md for the full fill-in structure.

Step 1: Define the Scope

Clarify what you're analyzing:

## Overview
 
- **Project/Product Name:** [e.g., "AI-Powered Invoice Automation for SMBs"]
- **Analysis Purpose:** [e.g., "Assess viability of launching in EU market"]
- **Analyst:**

Quality checks:

• Specific: Not "analyze market" but "assess viability of EU launch"
• Time-bound: PESTEL factors change—state your horizon

Step 2: Analyze Political Factors

Examine government and regulatory influences:

Quality checks:

• Specific to your product: Don't list generic policies—explain the impact
• Actionable: Can you adjust strategy based on this insight?

Step 3: Analyze Economic Factors

Examine economic conditions:

Quality checks:

• Data-driven: Use real economic indicators (GDP growth, inflation rates, etc.)
• Product-specific: How do these trends affect your product?

Step 4: Analyze Social Factors

Examine societal and cultural trends:

Quality checks:

• Trend-based: Reference actual cultural shifts, not assumptions
• Validated: Use survey data, research reports, or demographic studies

Step 5: Analyze Technological Factors

Examine technology landscape:

Quality checks:

• Competitive context: How does the tech landscape affect your position?
• Actionable: What R&D or partnerships do you need?

Step 6: Analyze Environmental Factors

Examine environmental and sustainability issues:

Quality checks:

• Honest assessment: If impact is minimal, say so (don't force relevance)
• Market positioning: Can environmental factors be a differentiator?

Step 7: Analyze Legal Factors

Examine legal and compliance landscape:

Quality checks:

• Legal risk assessment: What could block or delay your product?
• Compliance costs: Budget for legal, data residency, certifications?

Step 8: Synthesize Insights

After analyzing all six factors, summarize:

Step 9: Update Regularly

• Annual review: Reassess PESTEL factors during strategic planning
• Trigger events: Update when major external events occur (new regulations, economic shifts, etc.)
• Track changes: Document how factors evolve over time

Examples

See examples/sample.md for a full PESTEL analysis example.

Mini example excerpt:

Common Pitfalls

Pitfall 1: Generic Analysis

Symptom: "Political: Regulations exist. Economic: Economy affects spending."

Consequence: No actionable insights.

Fix: Be specific: "EU AI Act requires explainable AI → Need transparency features by Q3 2026."

Pitfall 2: Ignoring Low-Impact Factors

Symptom: Forcing relevance where none exists (e.g., "Climate change affects our SaaS product...")

Consequence: Wastes time, dilutes focus.

Fix: If a factor has low impact, say so. Focus effort on high-impact areas.

Pitfall 3: No Data Sources

Symptom: "Economic growth is strong" (no citation)

Consequence: Unverifiable claims, low credibility.

Fix: Cite sources: "SMB sector growing 5% annually (US Census Bureau, 2025)."

Pitfall 4: Analysis Without Action

Symptom: Long list of factors, no strategic recommendations

Consequence: Insights don't inform decisions.

Fix: Synthesize into "Top Opportunities," "Top Threats," and "Strategic Recommendations."

Pitfall 5: One-Time Exercise

Symptom: PESTEL analysis done once, never revisited

Consequence: Stale insights as macro environment shifts.

Fix: Review annually or when major external events occur (new regulations, economic shifts, etc.).

References

Related Skills

• skills/recommendation-canvas/SKILL.md — PESTEL factors inform risk assessment in canvas
• skills/positioning-statement/SKILL.md — PESTEL insights shape competitive positioning
• skills/problem-statement/SKILL.md — Social/economic factors influence customer problems

External Frameworks

• Francis Joseph Aguilar, Scanning the Business Environment (1967) — Origin of PEST analysis
• PESTEL (extension of PEST to include Environmental and Legal)
• Michael Porter, Competitive Strategy (1980) — Complements PESTEL with industry-level analysis

Dean's Work

• PESTEL Analysis Prompt Template (adapted from Aguilar's framework)

Provenance

• Adapted from prompts/pestel-analysis-prompt-template.md in the https://github.com/deanpeters/product-manager-prompts repo.

Skill type: Component Suggested filename: pestel-analysis.md Suggested placement: /skills/components/ Dependencies: References skills/recommendation-canvas/SKILL.md, skills/positioning-statement/SKILL.md