PESTEL
Test how political, economic, social, technological, environmental and legal factors affect a market entry or investment decision.
Use the idea inside a branch. Never say the name.
- Political
- Economic
- Social
- Technological
- Environmental
- Legal
Watch out: Keep only the forces that matter for this market; six generic lines is filler.
On a case
Launching e-scooter rentals in Bengaluru.
- Political: city permits
- Social: last-mile commuting habits
- Technological: battery swapping
- Environmental: monsoon downtime
- Legal: helmet and licence rules
Illustrative case. Figures and conditions below are assumptions for practice, not market data.
For Bengaluru scooter rentals, political support is different from legal permission. Ask which permits and operating conditions actually apply before assuming a launch is allowed. Economic factors include utilisation and charging costs; social factors include whether commuters will rent for the last mile.
Technological reliability affects battery availability. Environmental conditions such as heavy rain may reduce usable days. Legal requirements must be checked against current official rules; this example supplies no permit or licence advice.
Assume a scooter needs eight paid trips per day to cover its costs. If rain lowers expected trips from ten to six, the economics change even with strong interest from commuters. Test a small launch across weather conditions, with expansion conditional on permissions, reliability and contribution per scooter.
Sources and further reading
- US Small Business Administration: market research
Questions for testing customer demand, market size, location, saturation and competing prices.