Businesses typically use several methods to analyze environmental factors:
PESTEL Analysis PESTEL analysis is a strategic tool used to identify and analyze the Political, Economic, Social, Technological, Environmental, and Legal factors that could impact a business. This comprehensive approach helps companies understand the broader external environment and make informed strategic decisions.
SWOT Analysis SWOT analysis evaluates a company's internal Strengths and Weaknesses, as well as external Opportunities and Threats. Environmental factors are often considered in the opportunities and threats sections, helping businesses identify external challenges and prospects.
Scenario Planning Scenario planning involves creating hypothetical scenarios based on different environmental factors. This method helps businesses anticipate potential future events and develop strategies to address them. Scenario planning can be particularly useful in uncertain and rapidly changing environments.