Table of contentsSummaryIntroductionPESTEL modelConclusionSummaryThis is a comparative article based on strategic management models. The research begins with an explanation of why the PESTEL model receives more weight compared to other SWOT analysis approaches. The article takes into account the PESTEL model, which is part of the different managerial approaches to SWOT analysis. The advantages of the model over other approaches are also analyzed in the paper. The PESTEL approach to environmental analysis is also discussed in the document. Various factors that affect any business operation are categorically analyzed and discussed in detail. A clearer connection between PESTEL and SWOT analyzes is also part of the discussion. The benefits of specializing in analyzing the external environment versus the internal environment are discussed as the main elements that give the PESTEL model more weight compared to others. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essayIntroductionAccording to Gillespie (2007, pp.26), the success of any business is determined by its environment. The business environment ranges from internal to external factors. In order to effectively manage a business without being compromised by its environments, a strategic management system is necessary. Various models have been used by various companies in order to establish the company's strengths, weaknesses, opportunities and threats (SWOT analysis). SWOT analysis helps in predetermining the environments that thwart the business and therefore helps in strategic management. In this article, the PESTEL model is considered. The PESTEL, also called the PEST model, is most preferred for use alongside SWOT analysis in strategic management. Indeed, the model takes into consideration the macro environment, also called external environment. The internal environment is easily controllable by any business manager. However, greater failure in most cases results from the external environment, which ranges from political, economic, social, technological, environmental and legal factors that revolve around the business. There is much interest in the PESTEL model because it attempts to manage most of the factors influencing business organizations (Gillespie 2007, pp. 45). PESTEL Model The term PESTEL is an abbreviation of the key elements that make up the PESTEL model. The term PESTEL refers to political, economic, socio-cultural, technological, environmental and legal factors. All these elements constitute the macro environment that affects the functioning of any business organization. Jurevicius (2013, pp.25-39) considers the PESTEL model as a strategic approach that takes into account a combination of all these factors in order to establish the strengths, weaknesses, opportunities and threats that encounter or are likely to arise. affect the business in the near future. The macroeconomic environment is unpredictable and most of its factors are beyond the control of any business manager. Take, for example, the management of the company which can control the workers and its resources, which constitute the internal environment of the company. However, the company's management cannot control the political situation or technological trends within its country, even though these may affect the company. This explains why the PESTEL model is of great importance since the macro environment cannot be controlled from inside the company. The overall benefit of this model is that management will employ measureswhich will counteract these political, environmental or technological factors, among others (Jurevicius 2013, pp.25-39). Any business organization operates in an environment surrounded by competitors and political, economic, socio-cultural, technological, environmental and legal factors. All of these elements constitute the economic forces that the company must counteract. This requires strategic management which requires in-depth analysis, particularly on environmental factors. Strategic management shapes the business to fit the industry and gain competitive advantage over competitors. This brings us to the application of the PESTEL analysis model. The elements of the PESTEL model also determine Porter's five forces found in the business environment. These forces include threat of entry, threat of substitution, bargaining power of buyers, bargaining power of suppliers, and rivalry among business competitors. Taking, for example, threat of entry and threat of substitution, these can be caused by technological factors, political situation and legal factors. The purchasing power and bargaining power of buyers and suppliers can be influenced by economic factors, which can also lead to a threat of substitution. Legal factors, which are part of the components of the PESTEL model, can influence rivalry between competitors. In general, business forces revolve around the external factors elaborated in the PESTEL model (Peng, GCA and Nunes. (2007, pp.34). The PESTEL model stands out as the most effective tool for business analysis (Kaplan, RS and Norton 2008, pp. 20).The PESTEL model takes into account the political factors that can impact the business. political stability or instability, government policy, labor laws, taxation, foreign trade, among other policies influenced by the government Taking, for example, political stability, this is a factor. external which streamlines the flow of business activities and hence attracts foreign investors Expansion of business activities beyond national borders is the modern trend in business It attracts more customers and creates larger markets for them. commercial products or services. However, all this will depend on the political situation and national governance. While government has a role to play in enabling business prosperity, strategic management and analysis of policy factors that in some way may help or harm business operations is necessary. Using the PESTEL model in any organization will prioritize the analysis of political factors that may affect the business (Peng, GCA and Nunes 2007, pp.54). Rothaermel (2015, pp.35) explains how using the PESTEL model in business analysis, will follow the political trend. In the event of political instability, it is the role of the company to plan and take precautions. Using the PESTEL model will also enable the company to obtain new opportunities outside the country, where international markets are being opened by the government. Although the business cannot control the political trend, a thorough study of the political and governance situation will help businesses discover new market opportunities, upcoming threats and necessary precautions. Through this, organizations will be able to respond to current and expected business legislation, thus adapting accordingly to the policies that apply to them.are favorable (Yüksel 2012, pp. 23). Another element of the PESTEL model is economic analysis. company factor. The economics of the business operations industry is a key element that must be considered by the business. The economic situation determines the company's income. The PESTEL analysis model takes into account certain economic aspects such as interest rates, economic growth and exchange rates. Unlike other approaches, the model relies on an in-depth study of capital flows. Although it has no control over aspects of economic growth, tax rates, customer income and tax policies, it is important for the company to carry out analyzes because they determine the company's income. business. Such economic factors such as taxation and customer income will directly determine the purchasing power of customers. Less income will result in low purchasing power, thus resulting in low business income. Tax rates and economic growth directly determine company revenue and capital. For example, low economic growth and high taxes will result in low revenues for businesses. It is therefore necessary for companies to develop a strategy that will help them survive in such situations (Valentin 2001, pp. 54-69). Certain factors influence product costs, prices and company investments. The PESTEL model gives an analysis of the economic situation of the company. This may vary from the current situation to the future situation. After analyzing the economic factors, the company employs strategies to curb the situation and improve its survival. For example, the likelihood of economic decline and low customer income that may result in low sales may motivate the company to venture into other markets elsewhere. The company may also consider adjusting its prices based on the customer's purchasing power, thereby gaining a competitive advantage or not. Capital is a key part of a business and the aspect of sales and profit is the steering wheel towards business prosperity. The PESTEL model is important in managing the economic situation of any business to ensure prolonged survival and competitive advantage over its rivalries. Social factors are part of the elements of the macro-environment that affect every business. The PESTEL model analyzes them as sociocultural beliefs, practices and attitudes found in the society in which the business is carried out. In order for the company to understand its customers and suppliers, PESTEL analysis is used. This helps understand the age distribution within the population, a factor that determines the type of products the population is likely to purchase. Population growth and health consciousness are some of the social factors that a company can leverage to gain a competitive advantage over its rivals. Considering the aspect of beliefs and altitudes, the company is likely to understand the preferred products that customers in that region can purchase. This takes into account that certain cultural beliefs and practices trickle down to make up the society's way of life, what they eat, and their general lifestyle. This analysis should be used before product introduction to determine the prosperity of a particular market segment. Modernization brought technology. All sectors of the economy, including businesses, have used the technological aspect. This ranges from production, packaging, distribution and promotion of commercial products and services. The technology has also.