SMEs - Step 5 in the business planning process

The last step in the corporate strategy is the environmental analysis, more commonly known as the PESTEL analysis.

This could arguably be done earlier in the corporate strategy process, and in fact should best be done as part of each and every step of the corporate strategy process. This environmental analysis is crucial to success, as these external factors are outside the control of management and consequently it is imperative that management are aware of their possibly impact on the corporate strategy.

Too often businesses become introspective and consequently fail to take cognisance of the external factors that surround their businesses, and then they later wonder what caused their businesses to fail.

For the uninitiated it is Political, Economic, Social/Cultural, Technological, Environmental and Legal environments which are to be monitored.