Usually, you are always treated to a SWOT analysis. But do you understand how the factors in SWOT are formed? The answer is in the analysis of the PESTEL business model.

The SWOT and PESTEL models are like two things that cannot be released. If you want to do a SWOT analysis, then you need to also analyze it with the PESTEL model. So what exactly is the PESTEL model?

Pestel Model

The PESTEL model stands for politics, economics, social culture, ecology, and legality (law) where the five factors are used to analyze external factors that affect the growth and running of your business at a macro level.

Well, the results of the analysis is then a reference to draft SWOT analysis, especially in terms of opportunities ( opportunity ) and threats.

1. Political Factors

In developing a business, of course, you must pay attention to the political factors where you do business. The political factor here covers all government policies as a whole.

Political factors include export-import policies, tax policies, labor policies, environmental responsibility policies, to regulations that are more specific and made under certain conditions such as a prohibition on selling certain goods at certain times. Or it could also be an unstable political situation such as the existence of intention in overthrowing the government or during elections.

Therefore many conflict countries whose economic growth rates are slowing down or even recessive due to unstable political conditions. Political conditions like this cause the government policies in it to be grayed out so that there are policies that can be violated.

In addition, political factors also determine the direction of investor behavior. So you need to note that the business you are running is in line with government policy.

2. Economic Factors

Economic factors in determining the direction of your business policies become very fundamental. Economic factors include demand and supply conditions, inflation, exchange rates, and also economic growth.

For example, simply when the exchange rate is going up, this will certainly affect your decision in setting prices and other business strategies.

3. Socio-Cultural Factors

This factor actually looks at how consumers behave in a certain area. For example, trends that are being held by the consumer community that affects consumer behavior in shopping or living. For example, at the end of 2015 Indonesian people began to pay attention to healthy living.

But not only that, but socio-cultural factors can also be seen from demographics such as population growth, age, and sex distribution, and also the level of economic capacity.

4. Technological Factors

Starting from the discovery of conveyor belts in the first industrial revolution, technology and business are like two things that cannot be released. Entering the fourth industrial revolution where digital technology or the internet is the cornerstone of business tools, you also have to be able to adapt to it.

Business people must at least utilize these three things with technology, namely; production process, distribution process, and marketing process. These three things become important requirements for you to be able to adapt to business competition.

Later, the use of internal technology actually also becomes important for your business, for example, HR management technology, archiving, or accounting technology.

5. Ecological Factors

Whatever business it is, the responsibility for the true environment must be obeyed. Although this factor is relatively new because in the last 15 years the environment has become a special concern. Therefore for your business people, start by using environmentally friendly materials, ranging from product materials and supplementary materials such as packaging.

6. Legality Factor

In contrast to government policies, the legality factor is more directed to standard legal rules that are not only made by the government such as standards on the quality of food products that are standardized by BPOM and MUI, or the rules of billboard placement, or consumer rights.

Once you understand the PESTEL model, you can apply it to a SWOT analysis which then becomes your strategic basis for developing business plans from what products you will sell, marketing strategies, to other processes.