PESTEL analysis

Developed from Francis J. Aguilar’s scanning work · 1967

A checklist of the outside forces a business does not control: political, economic, social, technological, environmental, legal.

Its place in the frameworkMarket Core›Market Opportunities

What it does

Its whole function is coverage. Left to themselves, teams scan the two categories they are already worried about, and the change that eventually matters arrives from the one nobody was watching. The letters have accumulated over the decades; the discipline of going through all of them has not changed.

Reach for it when: At the start of opportunity work, and once a year regardless of whether anything seems to be happening.
Where it stops: It produces a list, not a judgement. Without a second step that asks how likely and how consequential each item is, it is a wall of observations.

Developed from Francis J. Aguilar, Scanning the Business Environment, Macmillan, 1967.

Why it sits at Market Opportunities

Where demand exists that the organisation is not yet serving — sized honestly, judged on fit as well as attractiveness, and narrowed to a list short enough to act on.

A model is only useful when you reach for it at the right moment. This one answers a question that arises here — so it is filed here, and nowhere else. These are the working areas it serves:

SizingThe addressable-market distinction between total, serviceable and obtainable market, and bottom-up sizing as the check on top-down figures.
Growth and directionDiffusion-of-innovation work on adoption curves, and the industry-lifecycle literature on how attractiveness changes by stage.
Opportunity assessmentAnsoff’s product-market matrix for the fit question, and the market-attractiveness screens used in portfolio planning.
The shortlistStrategic-choice literature on the discipline of deciding what not to do as the substance of a strategy.

All of Market Opportunities

What it touches elsewhere

Nothing in a business is decided on its own. A conclusion reached with this model at Market Opportunities lands in these other cores, whether or not anyone follows it there.

Business CoreAn opportunity requires a value proposition and the capacity to serve it, which is where fit is actually settled.
Goal CoreA pursued opportunity becomes a long term goal or it remains an observation.
CompetitorsAn unserved opportunity is unusual; establishing why nobody is serving it is part of the assessment.
Time CoreWhether the opportunity is available now is a separate question from whether it exists.

Filed at the same place

These answer questions that arise at Market Opportunities too. Where they disagree with this one, the disagreement is the useful part.

SWOT analysisInternal strengths and weaknesses set against external opportunities and threats.
TAM, SAM and SOMThe whole market, the part your model can serve, and the part you could realistically win.
The product life cycleProducts pass through introduction, growth, maturity and decline, and what to do about one depends entirely on where it is.

Elsewhere in Market Core

These are other people’s models, named here so you can go to the source and use them properly. The Omnigoal is not affiliated with their authors and is not endorsed by them; nothing of theirs is reproduced here — no canvas, no diagram, no wording. Each is described in our own words, with the originator credited, because the framework is a place to put thinking, not a replacement for the people who did it. Model names and trademarks belong to their respective owners and are used here only to refer to the work itself.

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