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What is a PESTEL Analysis?

Resources for a pestel analysis.

• General U.S. and International Industry Reports and Trends

A PESTEL analysis is a framework or tool used by marketers to analyze and monitor the macro-environmental (external marketing environment) factors that have an impact on an organization, company, or industry.  It examines the Political, Economic, Social, Technological, Environmental, and Legal factors in the external environment.  A PESTEL analysis is used to identify threats and weaknesses  which are used in a SWOT analysis.

Political factors include government policies, leadership, and change; foreign trade policies; internal political issues and trends; tax policy; regulation and de-regulation trends.

Economic factors include current and projected economic growth; inflation and interest rates; job growth and unemployment; labor costs; impact of globalization; disposable income of consumers and businesses; likely changes in the economic environment.

Social factors include demographics (age, gender, race, family size); consumer attitudes, opinions, and buying patterns; population growth rate and employment patterns; socio-cultural changes; ethnic and religious trends; living standards.

Technological factors affect marketing in (1) new ways of producing goods and services; (2) new ways of distributing goods and services; (3) new ways of communicating with target markets.

Environmental factors are important due to the increasing scarcity of raw materials; pollution targets; doing business as an ethical and sustainable company; carbon footprint targets.

Legal factors include health and safety; equal opportunities; advertising standards; consumer rights and laws; product labeling and product safety.

Public Company Websites.  Google search the company name and "investor relations."  This will often provide links to Annual Reports; financial reports such as 10-K, 10-Q, and 8-K; and corporate social responsibility reports.

• Business Source Complete (EBSCO) Country Reports, on the right side tool bar, links to extensive current reports providing information on the PESTEL factors in a country. Also, search for articles in periodicals and journals on individual PESTEL factors in the country, articles on a company and the industry it operates in.
• Nexis Uni (Replaced Lexis Nexis Academic) PESTEL factor information is provided for countries. At the landing page, select Publication and enter "United States" and date > 07/01/2016, for example, in the search box. Begin typing PRS Group Political in the Publication box and then select PRS Group Political Risk Service that appears below the box and click Search.

Select News instead of Publication to search for articles on companies, industries, and individual PESTEL factors. 

Open the Business section and select Company Dossier to search for information on a specific company.  The company report will include its brands and competitors, with links to current news articles, court cases, and intellectual property.

• IBISWorld Provides relevant industry reports; find the industry your company operates in. Economic information can be found in the Products & Market - Demand Determinants section. Technology and regulatory information can be found in the Operating Conditions section.
• Wall Street Journal Available from 1984-present in ProQuest Global Newsstream.
• New York Times Available from 1980-present in ProQuest Global Newsstream.
• US Newsstream ProQuest. Full text of 300+ U.S. and international news sources.
• Pew Research Center A nonpartisan fact tank that studies "U.S. politics and policy; journalism and media; internet, science and technology; religion and public life; Hispanic trends; global attitudes and trends; and U.S. social and demographic trends."
• Pew Research Center Global Indicators Database Pew Research Center conducts public opinion surveys around the world on a broad array of subjects ranging from people's assessments of their own lives to their views about the current state of the world and important issues of the day.
• CQ Researcher Online (CQ Press) A collection of reports covering political and social issues, with regular reports on topics in health, international affairs, education, the environment, technology and the U.S. economy from 1991 to the present.
• data.census.gov U.S. Census Bureau platform that provides data on the U.S. people and economy: population, education, business, employment, health, housing, income and poverty, economy, families and living arrangements, and international trade.
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PESTLE Analysis

• Getting Started
• Technological
• Environmental

Business Librarian

PEST analysis (political, economic, socio-cultural and technological) describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. It is part of an external analysis when conducting a strategic analysis or doing market research and summarizes the different macro-environmental factors to be taken into consideration. It is a strategic tool for understanding market growth or decline, business position, potential and direction for operations. Source: Wikipedia https://en.wikipedia.org/wiki/PEST_analysis

For a comprehensive overview of how to create a PESTLE analysis, see the PESTLE Strategy Guide.

Here are several templates you can use to document your research.

• PEST Market Analysis Tool (.doc)
• PESTLE Template
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• Last Updated: Sep 27, 2022 11:51 AM
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PESTEL Analysis as a Baseline to Support Decision-Making in the Local Textile Industry

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• Erik Sigcha   ORCID: orcid.org/0000-0003-3205-6271 19 ,
• Andrés Martinez-Moscoso   ORCID: orcid.org/0000-0002-8952-0680 20 , 21 ,
• Lorena Siguenza-Guzman   ORCID: orcid.org/0000-0003-1367-5288 19 , 22 &
• Diana Jadan   ORCID: orcid.org/0000-0002-7264-5188 23  

Part of the book series: Advances in Intelligent Systems and Computing ((AISC,volume 1273))

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• International Conference on Systems and Information Sciences

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The concept of sustainability has several possible meanings in the Ecuadorian context. This is especially true when it comes to the business sector because of the complexity related to implementing the Good Living concept and honoring the constitutional Rights of Nature. In Ecuador, most of the business sector is represented by micro, small, and medium-sized enterprises (MSMEs). Thus, their role in the development of national economies is crucial. This sector has difficulty adapting its organizations to the way of sustainable development. In fact, the decision to incorporate the principle of sustainability in this transition period is a big challenge for MSMEs due to their limited resources and the competitive environment they face. This work studies the contextual aspects influencing the regular operations of the Ecuadorian MSMEs, with particular emphasis on the textile industry. To do so, a comprehensive literature review was performed by applying a political, economic, social, technological, environmental, and legal (PESTEL) analysis. As a result, factors and implications were identified and explained in context, comprehensively, not individually. The information gathered yielded an overview of the sector, which serves as a baseline for the definition of the required models and tools for supporting sustainable decision-making in the local context.

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Acknowledgments

This study is part of the research project “Incorporating Sustainability concepts to management models of textile Micro, Small and Medium Enterprises (SUMA)”, supported by the Flemish Interuniversity Council (VLIR) and the Research Department of the University of Cuenca (DIUC).

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Authors and affiliations.

Department of Computer Sciences, Faculty of Engineering, Universidad de Cuenca, Cuenca, Ecuador

Erik Sigcha & Lorena Siguenza-Guzman

Faculty of Economics and Business Administration, Universidad de Cuenca, Cuenca, Ecuador

Andrés Martinez-Moscoso

School of Law, Universidad de Cuenca, Cuenca, Ecuador

Research Centre Accountancy, Faculty of Economics and Business, KU Leuven, Louvain, Belgium

Lorena Siguenza-Guzman

Department of Applied Chemistry and Systems of Production, Faculty of Chemical Sciences, Universidad de Cuenca, Cuenca, Ecuador

Diana Jadan

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Correspondence to Diana Jadan .

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Eindhoven University of Technology, Eindhoven, Noord-Brabant, The Netherlands

Miguel Botto-Tobar

Universidad Laica Eloy Alfaro de Manabí, Manta - Manabí, Ecuador

Willian Zamora

Johnny Larrea Plúa

José Bazurto Roldan

Alex Santamaría Philco

Appendix A - List of References on ICT Levels of Use

The list of works reviewed to determine the levels of use of ICT tools can be found at https://imagineresearch.org/wp-content/uploads/2020/05/PESTEL-Appendix-A.pdf .

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Sigcha, E., Martinez-Moscoso, A., Siguenza-Guzman, L., Jadan, D. (2021). PESTEL Analysis as a Baseline to Support Decision-Making in the Local Textile Industry. In: Botto-Tobar, M., Zamora, W., Larrea Plúa, J., Bazurto Roldan, J., Santamaría Philco, A. (eds) Systems and Information Sciences. ICCIS 2020. Advances in Intelligent Systems and Computing, vol 1273. Springer, Cham. https://doi.org/10.1007/978-3-030-59194-6_13

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What is a PESTLE Analysis?

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PESTLE (sometimes PEST) is a framework for analyzing the external macro environment of a business or industry, usually specific to a particular country. PESTLE stands for:

• P – Political
• E – Economic
• S – Social
• T – Technological
• L – Legal
• E – Environmental

Use the resources listed on this page for conducting a PESTLE analysis, including:

• analyzing a country's economic, business, political, legal and security risk
• investigating the ease of doing business
• assessing commercial opportunities and challenges
• examining social, cultural and environmental issues

Recommended reports:

COUNTRY/TERRITORY REPORTS Search tip: To select a county, hover over the [Country Intelligence] link and then either:

• click on the [Country Intelligence: Overview] link and use the drop down option at the top of the page to select a country or
• use the research a geography search box  to enter a country name and then select "Overview"

On the country's Overview page , explore the headlines, special reports, risk scores (political, economic, legal, tax operational and security), and economic data. In the  Country/Territory Report box click Read Full Report to view the the full country report.

Euromonitor Passport provides business intelligence on selected Industries, Countries & Consumers, Companies, and Geographies, and comprehensive tools for analysis across datasets. Each category includes in-depth reports, analyst comments, statistics and external sources. New reports, analyses and comments are added daily, while industry reports are updated annually. Historical and forecasted date coverage varies by country, within a broad range of 1977 to five-year projections. Users will have to fill out a short registration form the first time they access Euromonitor. Faculty & Staff members please list your department under "Course".

Recommended reports: 

• PEST ANALYSIS Search tip:  In the search box, type Pest Analysis [name of country] . For example:  PEST Analysis USA
• COUNTRY PROFILES Search tip: In the search box, type [ name of country ]  country profile.   For example: Australia Country Profile
• BUSINESS DYNAMICS REPORTS Search tip: Click on   [Economies] in the top navigation bar, then select  [Business Dynamics]. In the [ Explore Analysis ] section, select Country Report from the Analysis Type list, Business Dynamics from the Category list, and then choose a country from the Geography list.

Search tip:  Look for the Browse menu on the right side of the page and select   [Country Reports] . Enter the name of a country in the All Countries search box. The results list may include:

• Country Reviews from CountryWatch (which include social and environmental overviews)
• Country Profiles from MarketLine (which include In-depth PESTLE Insights)
• Country Risk Reports from Business Monitor International (BMI). 

Search tip: Click on [Reports] in the top navigation bar, then select [Country Reports] . Search for a country or region. Results will usually include Country Reports and Dossiers.

These resources provide information on the ease of doing business and commercial opportunities, regulations, and business customs in a country:

Country Commercial Guides (also referred to as "doing business" guides) are published annually by U.S. embassies with the assistance of several U.S. government agencies. These reports present a comprehensive look at countries' commercial environments, using economic, political and market analysis. Free resource.

• PwC: WorldWide Tax Summaries From PwC: "this useful online tool will help you make informed decisions with the most up-to-date and relevant details about tax systems in more than 150 territories worldwide." Free resource.

Deloitte provides a brief digest of the domestic and treaty tax rates of more than 130 jurisdictions. Each International Tax Guide provides an overview of the general investment landscape, corporate taxation and compliance, individual taxation and compliance, withholding rates, anti-avoidance rules, value-added tax (VAT; where applicable) and other types of taxes, and tax treaty information. Includes Quick Links to current news and other relevant resources. Free resource.

Need some more background information? These are good resources for country profiles.

Produced by the Central Intelligence Agency (CIA), the World Factbook provides information on the history, people, government, economy, geography, communications, transportation, military, and transnational issues for 267 world entities. Free resource.

OECD (Organisation for Economic Co-operation and Development) publishes economic surveys, comparative statistics, regular outlooks and annual overviews for its 34 member countries and some major additional countries. Free resource.

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PESTEL Analysis

PESTEL is a strategic analytical tool used to assess external factors affecting businesses. PESTEL acronym stands for political, economic, social, technological, environmental and legal factors impacting companies. PESTEL has recently evolved from PEST analysis once intensifying forces of globalization and intensifying forces of competition in the marketplace coupled with other set of factors increased the importance and potential impact of environmental and legal factors on businesses.

The majority of resources explain the application of PESTEL assuming their audience is business owners. This article adopts an alternative approach and below is the explanation of the framework for business students who have been assigned by their educational institution to conduct PESTEL analysis.

Application of PESTEL as a part of your assignment can be facilitated via the following steps:

Step 1: Data Collection

If you have a choice, you should select a multinational corporation as a case study company to conduct PESTEL analysis due to the availability of relevant data about famous multinational enterprises. Company annual report along with official website of the company is the most comprehensive source of data needed to conduct PESTEL analysis. Additionally, you can purchase a company report on this portal. The portal offers reports about the most famous multinational enterprises and repots contain PESTEL analysis of respective companies. Online versions of the most popular business journals and magazines such as Wall Street Journal, The Economist and Inc. are also effective sources data to be used for your analysis.

Step 2: Deciding which factors to discuss

There is a vast range of political, economic, social, technological, environmental and legal factors that effect the company you have chosen as a case study. You do not have the space to discuss all of these factors in your paper; therefore, you will have to choose the most significant factors for your analysis. Unfortunately, there is no general rule or a universal recipe as to what factors to discuss.

The table below illustrates the most significant factors that affect business organizations listed in order of importance:

It is important to note that although in the table above factors affecting businesses are listed in order of importance, the patterns of data collected during the previous step may indicate that certain factors have the most significant impact compared to other factors on your chosen company for each category of factors. Your task is to determine specific factors under each category that proved to have the biggest impact on the business, appreciate the nature of the impact and understand the consequences.

Step 3: Writing

Depending on the total word count requirement specified in your assignment instructions, you will need to discuss about 4-5 factors under each category. The knowledge about the total word count requirement is important in a way that you need to discuss each category of factors and each specific factor with more or less equal numbers of words. One of the common and effective ways of conducting PESTEL analysis is to present the list of factors with the most significant impact on the form of table, similar to the table above, followed by discussion of each individual factor listed in the table.

To assist with your assignment, you can find samples of PESTEL analysis here .

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Original research article, a pestel and swot impact analysis on renewable energy development in togo.

• 1 School of Engineering, Robert Gordon University, Aberdeen, United Kingdom
• 2 National Subsea Centre, Dyce, United Kingdom
• 3 School of Applied Social Studies, Robert Gordon University, Aberdeen, United Kingdom

Similar to most developing countries, Togo continues to rely on the use of traditional forms of biomass energy which causes tremendous socio-economic, environmental, and health hazards. In addition, the imbalanced distribution and use of electricity, petroleum, and liquid gas reflect the disproportion in income and quality of life. This paper plans to highlight the development that renewable energy had in the past decade and the challenges facing the Togolese government, using a framework approach that will best address them. Framework approaches such as PESTEL and SWOT analyses are utilized to access both the internal and external factors in relation to renewable energy development and its impact on Togo. This will provide a better understanding of the sustainability issues facing Togo and provide solutions on the best methods that will lead to greater impact and development. The result shows that renewable energy development in Togo has improved in the past decade and had some impact on socio-economic development. However, better development will be achieved if approaches are introduced to provide a long-term solution to the high capital costs of the technologies, institutional sustainability is incorporated, the number of trained personnel/technical expertise is increased and the Government engagement with funding bodies to secure funds that will favor off-grid and poorest communities is increased. There is also a need to include local participation in the design and operation of projects and introduce a cross-subsidization tariff scheme that covers the operation and maintenance costs of off-grid solar PV users that will favor poor households. Finally, liberalization of the energy sector is needed as well as the government's support to help private investment in rural electrification via Build-Own-Operate arrangements.

1. Introduction

Several frameworks in the literature such as the Environmental Impact Assessment (EIA), the International Organization for Standardization (ISO) regulations, the political, economic, social, technological, legal and environmental (PESTEL) analysis, and the SWOT analysis have been considered to analyze the current impact that renewable energy has had in Togo and to illustrate the issues facing the country as well as provide recommendations on the best way to move forward. To develop this further, our research is focused on better understanding renewable energy development in Togo to analyze the impact and find new opportunities and identify potential threats regarding its development ( Kansongue et al., 2018 , 2022 ). Looking at the different frameworks listed, the EIA would have been the best suit if the focus of their research was based on environmental impact assessment which is not the case as there are many of other factors that need to be considered. ISO regulations ( ISO, 2018 ) are more of quality management standards that help work to be more efficient and reduce product failures. This is a good framework that is used in energy management practices, energy efficiency analysis, and reduction in green gas emission analysis among others. This research does not only look at quality management standards that could improve the efficiency of renewable energy products but have more broad areas to be considered in discussing the impact of renewable energy development in Togo. This includes economic, social, environmental, political, and technology among others which ISO framework if chosen will not allow an in-depth look into these various factors thereby will not be the best framework to use in such research. Looking further, PESTEL stands for Political, Economic, Social, Technological, Legal, and Environmental ( Achinas et al., 2019 ). It is a framework used to analyze the key factors influencing an organization from the outside and was at first designed as an assessment tool of the external macro environment in which an industry or business operates ( Iacovidou et al., 2017 ). It is useful in identifying and understanding the key political parameters that are likely to affect the industry; the key environmental and economic considerations and associated societal aspects; the technological innovations that are likely to occur; as well as the current and impending legislation that may affect the industry ( Kralj, 2009 ). PESTEL offers people professionals insight into the external factors impacting their organization. Its analysis has been used in many studies to identify and overcome a variety of obstacles to development. For example, to identify and overcome obstacles relating to the development of the waste-to-energy incineration industry in China, Song et al. (2017) used the PESTEL framework to analyze the macro-environment of the waste-to-energy (WTE) incineration industry in China. They concluded that MSW management in China is controlled by many administrative departments that lack coordination. They also found that by including comprehensive references and suggestions, such as policy changes, application of the Public Private Partnerships (PPP) mode, and guidance on encouraging efficient project operations, the study is also expected to facilitate investment, operation, and management in WTE incineration projects and pave the way for potential private investors who intend to enter the Chinese market. This has also been used in Zalengera et al.'s (2014) study for outlining a novel thinking for addressing the political (P), economic (E), social (S), technological (T), legal (L), and environmental (E) challenges that constrain the development of renewable energy technologies in Malawi. They observed that although the Malawi National Energy Policy clearly lays out the steps toward improving the country's energy situation; unreliable financing mechanisms for large scale energy projects, shortage of trained human resources, lack of coordination among local institutions; unclear regulation framework and sometimes political governance impede the sustainable execution of energy projects and concluded that it is evident from that holistic approaches are crucial for strengthening Malawi's energy sector, and it requires radical political and governance decisions. PESTEL can provide more detailed guidance to decision-makers on issues that are likely to impact the success of their initiatives ( Bell and Rochford, 2016 ). Despite its relative strength in describing multi-dimensional aspects, the use of PESTEL analysis is necessarily narrative; restricted to the identification and conceptual evaluation of the relative importance of contextual issues to determine those that should be subject to a more detailed analysis. Such issues include, for example, political drivers of change, social values that must be protected, environmental systems sensitive to adverse impacts, and legal or regulatory requirements ( Iacovidou et al., 2017 ).

Furthermore, the SWOT analysis is also used to identify the strength, weaknesses opportunities, and threats. However, while PESTEL analysis only concentrates on the external factors, SWOT analysis looks at the internal and external strengths and weaknesses factors that are affecting the development of renewable energy in Togo as well as broader opportunities and threats. It can be used to explore possibilities for new efforts or solutions to problems, make decisions about the best path for your initiative, determine where change is possible, and help to adjust and refine plans mid-course ( The University of Kansas, 2022 ). SWOT and PESTEL analysis are used to make a systematic and thorough evaluation of a new business or project. They are decision-making tools where PESTLE analysis helps the investors to take the decision about the investment and SWOT analysis supports the policymaker for further development. Using both frameworks approach gives decision-makers a better awareness and understanding of the changes that may occur and the impact that these changes may have on their business ( Woodruff, 2019 ). While PESTEL analysis gives a thorough concept of the external environment where an organization operates; SWOT analysis identifies the internal environment of the organization. The combination of both in this study which has not been done in previous research within the context of renewable energy development in Togo will help to understand what is being done well and derive a better strategy for better development as well as provide a better impact on socio economic development. This is because there is a strong belief that the current issues facing the energy sector can be improved and the introduction of the use of renewable energy with a focus on rural areas can make a significant impact in solving Togo's energy issue and provide sustainable development of the country.

2. Methodology

The data collection method is based on a mixed methodology method that includes three groups of data namely primary, secondary, and tertiary data collection. The primary source of data includes interview notes, field notes, and illustrations which were collected through face-to-face interviews, questionnaires, field notes, and observations. Secondary data collection is based on the use of journal publications, conference proceedings, national, international, governmental, and non-governmental reports. These are collected through a combination of desktop studies, literature reviews, workshops, and conferences. Tertiary data made use of database resources from archival review. A three-round method was used to evaluate the potential of renewable energy technologies and the impact of their development on the energy mix of Togo. Workshops were conducted with five rural communities namely Mansouri and Mango located in the north, Kamboli in the central region, Notse and Agome Glozou in the south. The participants were composed of farmers, fishermans, and artisans. In total, 80 participants took part. In addition, interviews were done with stakeholders from RE Private organizations, NGOs, Financial organizations, Policy makers, international organizations, and Academic institutions to get their viewpoint in relation to the current energy situation in Togo while accounting for the planned development actions to increase energy access using renewable energy. These stakeholders had more knowledge of renewable energy, and contribute to decision-making whether financially, with their expertise, or politically. The reason for this engagement was to incorporate the bottom-up approach in this research that considers the integration of the community with policy makers to capture all views to include in the analysis as well as encourage cross-sector cooperation. The discussion with the rural community helped better identify available resources, the type of activities or businesses, and existing energy needs that will help in finding possible solutions and recommendations that will best suit the need of the people. However, without talking to the policy makers to find out what their stake is, what could be done, what is available and what is needed, and ways to achieve required results will be useless. Overall, 31 stakeholders took part in the first data collection, 17 in the second data collection, and 16 in the third data collection. The first process of data collection confirmed that most people do not have access to energy for their daily lives and the majority rely on the use of biomass such as firewood, charcoal, and vegetable waste most of which is unclean and highly polluted when burned. The most affected people live in rural areas. Results also showed that there is little production while population growth is on the ascendency. It also revealed people's interest in developing other forms of energy such as Solar PV, biogas, hydropower, and wind energy to increase energy autonomy and provide socio-economic benefits. Achieving this will require an increase in political will, housing capability by training personnel, raising awareness, and more studies being done to determine suitability for best results. Finally, actors within the energy sector were identified as CEB, CEET, Ministry of Mines and Energy, DGE, Contour Global, Privates RE Companies, Government, NIOTO, ARSE, and ABREC.

The second process of data collection revealed that there has been the installation of solar mini plants in four villages across the country which serve as lighting and water pumps. It also revealed that previous solar installations in 22 villages resulting from the West African Economic and Monetary Union project are being used for lighting, charging of electrical equipment such as laptops, radio, TV, refrigeration system, and fans for cooling. In addition, the results showed that mainly policy makers are engaged in decision-making with contributions from top professors in academia. Private Renewable Energy companies and NGOs contributions are seen as proposals and not necessary considered in the final decision. Furthermore, the data revealed that Law No. 2018-010 relating to the promotion of the production of electricity based on renewable energy sources has been introduced and favors organizations with the public interest. Data also showed that few regulations exist that need to be improved and put into application plus public interest in prioritizing RE, diversification of RE as well as promoting it and raising awareness.

The third data collection was organized in 2020 for the purpose of validating information from previous data collection. This was necessary due to a time interval between the interviews considering development that could have occurred. It revealed an increase in the rate of access to electricity which went from 80% of the population not having access to electricity at the start of the research in 2014 to 50% during data validation and currently 47%. However, significant discrepancies exist between urban and rural access. This also revealed plans for several projects in line with reducing the share of biomass energy and increasing the share of alternative RE amongst others.

The Figure 1 gives an overview of the research approach conducted, the process and included participant.

Figure 1 . Overview of the research approach conducted, the process, and included participants.

The validation of the questionnaire was done in three steps to identify if the questionnaire were the right questions, clear enough, understandable, consistent, and minimal ambiguousness. Comparing the research topic to the literature served as a first reference step to designing the research questions and validating them. A thorough search of numerous databases for journal papers in the same field of renewable energy development was carried out to identify similarities and guidance on how best to frame these research questions. A systematic review investigated how other researchers tackled their studies and what could be the key component of discussions in this study as suggested in previous studies ( Oppenheim, 1992 ; Bell, 1999 ). This included looking at some feasibility studies done and using credible published studies, looking at various case studies and their results. Various reports were reviewed, key points noted, and recommendations investigated to ensure transparency and replicability of the use method. The following questions were used to derive the impact of renewable energy development in Togo:

1) Would you advise the use of renewable energy in Togo?

2) Can the use of renewable energy contribute to your daily life and activities?

3) How can the use of renewable energy improve any health issues?

4) What impact can the use of renewable energy have on the:

• Community level.

• Regional level.

• National level.

5) Do you think the use of renewable energy can reduce energy costs in the future?

6) What other impacts can the use of renewable energy produce on sustainable development (environment, socio-economic development)?

7) Solar energy was installed in 22 villages from 2013 to 2016 with the aid of the West African Economic and Monetary Union (WAEMU) project named “PRODERE” (“Programme regional de Developpement des Energies Renouvellables et d'Efficacite Energetique”). Do you know how those villages use the installed solar energy?

The questions above were addressed to different groups of stakeholders from rural communities, Renewable energy private organizations, NGOs, Financial organizations, Policy makers, international organizations, and Academic institutions. This was via organizing interviews with respondents from each group of stakeholders during the first and third rounds of the data collection and getting participants to complete the questionnaire that was sent to them during the second round of the data collection. In addition, findings from observation, field work, workshops with rural communities, and documents from field work also served as input in finding the impact. Table 1 below gives a detailed breakdown of the aim, methods used, and the task at hand and provides framework approaches for better development.

Table 1 . Summary of the process used for impact analysis.

Below is a breakdown of how the different methods listed in Table 1 will be used to derive the impact of renewable energy development in Togo. A framework for addressing the sustainability challenges facing Togo is provided based on the analysis. The method here is based on:

• Interviews: The steps and process of the interview are explained in Section 2 above. Based on these interviews, key points resulted from the responses of the participants per questions 1–7 listed above. Some of these answers enlivened the impact renewable energy has had in Togo based on recent development while others indicated the potential impact renewable energy could have in Togo and provided recommendations on ways for better development.

• Observations, field work, and workshops with questions based around finding out available resources produce, the stages involved, the current needs, and the available skills with communities helped in understanding the needs, practices, and problems of each chosen community. In addition, the observations on the ground based on various sites visit during the first data collection showed proof of some of the highlighted resources and issues and examples of things to document while taking observations. The analysis of these served as informational facts in identifying potential issues and solutions.

• Literature review: Several pieces of literature are used to represent the existing facts and current state ( Zovio, 2021 ; The Writing Centre and University of North Carolina, 2022 ) of renewable energy development in general and provide guidance on ways to change or adopt processes that open a flexible mind of thinking to comprehend other researcher's views and allowed us to apply a range of knowledge to the research matter. The literature used in this section served as guidance or learning lessons that are applicable to this research and allowed us to derive impact or best solutions and recommendations for better development. In addition, correspondence with participants yielded further literature information such as promotional materials, annual reports, company reports, and concept notes. Some of the field note documents are qualitative notes recorded during the research which formed evidence that helped in understanding the research subject and derived answers. The other documentation explained various activities and plans that some of the companies have made or plan. The findings in this section are used to discuss renewable energy's impact and future potential.

2.1. PESTEL analysis

PESTEL analysis is used to identify the strength, weaknesses opportunities, and threats. It looks at external factors and is primary used for market research. This research focuses on the use of renewable energy development in Togo and its impact on socio economic development. Based on the findings of the interview, observations, field work, workshops, and various documents used, several impacts have been listed including economic, social, environmental, and technological among others. To better look at these in detail, a PESTEL approach is considered because it helps provide a better understanding of current external influences that affect the development of renewable energy basing on instead assumptions, helps identify factors that could change, mitigate the risks, and take advantage of opportunities that need to remain competitive and develop a better long-term strategy. Besides, the use of this framework allow to closely look at the impact of renewable energy development based on social, economic, factors, political, legal, technological, and political affecting and provides a comprehensive framework for addressing the sustainability challenges facing the Togolese energy sector. Based on the result of the data collection, there are important factors that affect the development of renewable energy such as economic factors, technology, social, and environmental among others.

2.2. SWOT analysis

Similar to PESTEL analysis, SWOT analysis is also used to identify the strength, weaknesses opportunities, and threats. However, while PESTEL analysis only concentrates on the external factors, SWOT analysis in this study look at the internal and external strengths and weaknesses factors that are affecting the development of renewable energy in Togo. This helps to understand what is being done well and derive a better strategy for better development of renewable energy thereby providing a better impact on socio economic development. The use of the SWOT analysis help in this research to answer the questions summarized in Table 2 .

Table 2 . SWOT analysis matrix.

2.3. Data analysis

To analyze the results, data triangulation was used to increase the credibility and validity of the research findings. This was to cross check the finding and results obtained from the research as well as capture different dimensions of the same fact. It involved interviewing different groups of people and the use of multiple data sources such as qualitative and quantitative data sources to develop a comprehensive understanding of the facts in relation to renewable energy development. In addition, questionnaires were used in different rounds to cross check the data collected and to capture any differences. Furthermore, the use of different data collection methods that includes primary, secondary, and tertiary data collection as discussed in Section 2 above serves to minimize the risk of errors and avoid uninformed decisions. The data sample involved using results from 31 respondents from the first data collection, 17 respondents from the second data collection, and 16 respondents from the third data collection. All the participants were from different groups of expertise as detailed in Section 2. In addition, the results from interactions with 80 participants from rural communities were also used to conduct the analysis.

3.1. Impact analysis based on PESTEL factors and SWOT analysis

This section discusses the impact of renewable based on political, economic, social, technological, environmental, and legal factors. It also discusses the results based on the SWOT analysis highlighting factors (strengths, weaknesses, opportunities, and threats) that are affecting the development of renewable energy in Togo. Table 3 below provides details of key items discussed for each PESTEL factor and Table 4 provides details of key items discussed for the SWOT analysis. The sources for the information provided in both Tables 3 , 4 are from the data collection results which came from primary, secondary, and tertiary sources of data as well as the analysis and recommendations derived from it. The status is decided based on the outcome and how each factor of improvement or development in renewable energy affected the people and communities involved. Tables 3 , 4 provided a summary of the key items described in the PESTEL and SWOT results. The sections below provide comprehensive details with regard to the impact of renewable energy per each factor.

Table 3 . PESTEL analysis factors.

Table 4 . Summary of the SWOT results.

3.1.1. Political

To reduce the rural energy deficit, the Togolese government put in place a separate entity called AT2ER within the Ministry of Energy that will specifically take care of renewable energy projects and the rural electrification program; an electrification strategy with the goal to achieve 100% access to electricity by 2030. In addition, it launched a solar electrification project in 2017 supported by the African Development Bank (AfDB) in partnership with a private company called BBOXX. The aim of the project is to bring light to 2 million Togolese (~300,000 households) by 2022. Based on this the government put a policy in place for tax exoneration on solar products to help companies like BBOXX distribute renewable energy technologies at a subsided price to households as part of the electrification program. These subsidies have been introduced as part of the political framework by the party in power to get more people on board to sign up. As part of this program, BBOXX installs individual household solar kits for rural households and each household in turn pays $8.23 per kit for Basic, $11.32 per kit for Basic plus, and $19.29 per kit for Premium depending on their needs, all three are of 50 W to facilitate the upgrade. The government since 2019 subsidizes the cost by 2,000 F CFA (~$3.80) per month for each household holding a solar kit and plans to do that for a period of 36 months from the start date of household conditional on payment of the monthly household fee by the latter itself.

It is worth noting that while this practice can lead to improved adoption and diffusion of renewable energy technologies, it makes it extremely difficult for the registered individual to sustain it due to a lack of funds. Based on data collected, only 4% of rural off grid households subscribe of which 40% of them go for the Basic Plus. If the farmer cannot pay after registration, the kits are repossessed after 120 days of grace period in a year. It should be noted that these subsidies financing of renewable energy systems impairs sustainability challenges by creating beneficial dependence on subsidy when in a real sense they do not have the means to sustain it and keep on with their payment as it should be for a long time. This results in the repossession of the kits which makes development or changes temporarily and not sustainable. This approach fails to provide a long-term solution to the high capital costs of the technologies involved as an average farmer will not be able to sustain payment of even $5 per month and most beneficiaries would not be able to purchase the systems for a long period of time due to their economic situation. These could be remediated if the kits are not imported at high cost and made locally at cheap prices that can be afforded by the community. However, more research needs to be done to implement this.

Institutional sustainability is a key reason for the development of renewable energy. This has been shown in Chile where the rural electricity rate is nearly 100%. The key reason for this success owes to the Ministry of Energy recognizing that renewable energy is much cheaper compared to diesel generators for the life cycle of the project ( Feron et al., 2016 , 2017 ). This shows the importance of institutional sustainability when it comes to the sustainability of rural electrification programs ( Feron et al., 2017 ). Besides, receiving support from their government helped private investment in rural electrification via Build-Own-Operate arrangements which is another key to their success. Furthermore, Chileans took into consideration local participation in the design and operation of projects. Looking at the current issues in Togo, there is a need for government intervention, engagement, and complete support toward renewable energy projects and implementations. Furthermore, Togo could also learn from Kenya whose electricity increased from 23% in 2013 to about 50% in 2016 ( Lee et al., 2016 ). This success owes to the formation of the Rural Electrification Authority (REA) in 2006 which played a key role in this development. There have been huge investments through subsidies and adequate planning. A GIS based special least-cost analysis ( Lee et al., 2016 ) has been adopted in implementing a rural electrification planning framework that first evaluates and assesses the cost-effectiveness of undertaking an off-grid project, compared to grid extension ( The World Bank, 2008 ). In addition, the government of Kenya engaged with the World Bank which influenced its recent policy that favors mini grids as the least-cost off-grid electricity. This was done with the support of the Energy Sector Management Assistance Program (ESMAP). They also assisted the government to initiate an electricity access plan focusing on the most marginalized and poorest counties ( ESMAP, 2017 ). Just as Kenya's Government did, the Togolese Government needs to engage with different funding bodies that could assist in putting up in place policies that favor off-grid and poorest communities.

3.1.2. Economics

There have been few benefits with the installation of solar kits based on the Rural Electrification Programme called CIZO. A total of 40,199 solar kits have been installed by BBOXX within the country. The ARSE (2019) shows that 24 601 customers installed solar kits since 2017. It also showed that 20 shops were opened, and 10,225 customers had the Basic solar Kits installed (comprising of solar panels, batteries, and three bulbs) in 2019. In addition, ~6,511 customers had installed the Basic Plus Kit (comprising of solar panels, batteries, 4 bulbs, one loadable torch, and a radio). There was no Premium solar Kit installed (comprising of solar panel, batteries, 1 television of 24″, 4 bulbs, 1 loadable torch, and a radio). A total of 1,158 solar kits were withdrawn for a default payment. Findings from the data collection showed that these installations have mostly been used for electrification and some basic needs. The same goes for the SOLEVA solar kits which had a total of 1,003 customers installation by December 2019 and 1,385 by April 2020. According to the interview results, beneficiaries mentioned these coupled with the installed CEET streetlights and the solar photovoltaic mini grids have helped children study reducing the amount of money spent on buying kerosene for the lamps. In some cases, public lighting has helped women have a prolonged sale for their products instead of having to stop selling once it becomes dark. This helped provide additional income to the users thus improving the economic situation of the households. Furthermore, from the data collection result, participants mentioned that some of the installed solar kits have encouraged professional activities, and helped the small business increase their income in rural areas as more time is spent to continue their activities and improve productivity. Another tangible example of renewable energy development's impact highlighted by one of the private's sector participants during the interview was to do with bill reduction. Discussions with an owner of a clinic with 30–40 rooms that used to pay 1.2 million F CFA to CEET every year for bills showed that he was able to lower his expenses to 800,000 F CFA per year in < 3 years once he got solar installed. Besides these, based on responses received from participants during the interview, the majority believe the use of renewable energy will add value to produce where farmers can take the opportunity to grow their products even in dry seasons thereby generating more revenue.

Besides these few benefits resulting from the recent installation of solar kits in Togo, it is worth noting that the estimated population according to United Nations WFP (2021) is 8,478,250 and Togo has a per capita gross domestic product (GPD) of 672.50 US dollars according to 2019 Trading Economics. In addition, Togo is classified as a Least Developed Country (LCD) and Low-Income Food Deficit Country (LIFDC) ( United Nations WFP, 2021 ) and remains among the poorest countries in sub-Saharan Africa. Over 50% of the population lives below the poverty line (under USD 1, 25 per day). Findings from the interviews with various stakeholders, workshops conducted in rural areas, and observations during the field visit showed that the most affected by the lack of energy in Togo are those living in rural areas of Togo and are the least developed. The poverty level is twice as high in rural areas (68.9%) than in urban areas (37.9%) and 34.8% in Lome in 2015 ( PND, 2018 ). In 2021, the poverty level is estimated to be 58.8% in rural areas and 26.5% in urban areas according to the The World Bank (2021) . This is due in large measure to an annual population growth rate of 2.5% that is outpacing development progress, concentrated economic growth in the modern sectors, and limited access to quality services.

Based on gender, the poverty level is higher in households headed by women than in men-headed households. This figure was estimated to be 57.5% for women and 54.6% for men in 2015 ( PND, 2018 ). The Poverty level has since decreased and is now estimated at (45.7%) in women-headed households and (45.2%) in men-headed households ( The World Bank, 2021 ). Women remain more vulnerable, as they have less access to economic opportunities, education, health, and other basic socioeconomic facilities ( The World Bank, 2021 ). Social records indicate that self-employed farmers have the highest poverty rate despite the decrease in the level of poverty. The decline is mainly due to the significant investments made in the agriculture sector by the Government. Employees in the public sector recorded the lowest poverty rate in 2015 (28.1%) according to PND (2018) . Employees in the private sector and other self-employed are the socio-economic groups within which poverty rates have increased between 2011 and 2015 (44.1–49% and from 39.7–46.2% respectively) ( PND, 2018 ). Besides the poverty level being high in rural areas, the lack of access to the electricity grid is another issue. To improve the electrification rate, the government's policy put in place subsidized solar products to help companies like BBOXX distribute renewable energy technologies at a subsided price which presents a significant barrier to sustainability. This is because, looking at the financing capability of people, subsidizing the price is a plus, however, it is worth noting that majority of the population could not afford to pay over $5/month. Furthermore, renewable energy technologies kits in Togo are imported and are mostly expensive. Based on findings from the interview, the disposable income of people is relatively low to afford goods due to inflation issues within the country due to expensive imported solar kits ( CEET, 2018 , CEET, 2019 ). Table 5 shows the inflation evolution between 2009 and 2020 as also shown in Figure 2 .

Table 5 . Inflation rate between 2009 and 2020.

Figure 2 . Togo inflation rate between 2009 and 2020 ( World Data, 2021 ).

The inflation rate according to World Data (2021) was ~4.3% per year between 1979 and 2020. An item that cost 100 Francs in 1979 is now charged 510.91 Francs at the beginning of 2021, an increase of 410.91. Between 2013 and 2016 Inflation was brought under control by 1.4% on average due to the decline in food prices, which generally benefited from good weather conditions over the period and a decrease in petroleum products ( PND, 2018 ). Since 2019, inflation began rising again from 0.69% in 2019 to 1.83% in 2020, due to higher food and oil prices ( The World Bank, 2021 ; World Data, 2021 ). Besides all these, the COVID-19 pandemic has halted growth that fell to 1.8% in 2020 compared to 5.5% in 2019, following a decline in investments and consumption. Travel restrictions have adversely affected the tourism and services sector, while the agriculture sector has remained resilient. A rebound in capital goods imports to combat COVID-19 and a reduction in exports widened the current account deficit from 0.8% of GDP in 2019 to 1.5% in 2019. Grants and concessional loans helped finance the current account deficit. Debt rose from 52.4% in 2019 to 60.3% in 2020, owing to the significant increase in the fiscal deficit from 0.9% in 2019 to 6.9% in 2020 and a slowdown in economic activity.

Thus, without innovative financing mechanisms, the adoption of renewable energy technologies will remain low. This is because there is a need to come out with ideas that will foster income generating activities that will facilitate paying for good quality systems capable to meet people's energy needs. For example, Eco Tourism could be created by constructing a traditionally built and locally resourced base structure (including the use of renewable energy power) that will provide accommodation and leisure facilities for tourism which could increase local employment, establish stronger retail for hotel need supplies, and highlights Togo's importance in wildlife conservation. In addition, the design and construction of a multifunction dam for managing water supply and providing a suitable facility for fish production could be helpful in developing assets of this city.

3.1.3. Social

Renewable Energy development has had a few advantages on the society in Togo so far. Based on findings from the interview questionnaires 3.1–3.6 of the first data collection and research question i.e., ‘What impact can the use of renewable energy have on the: Community level, Regional level, National level.' of the second and third data collection questionnaires, the installed solar panel at some locations provide lighting for health centers which assist in products storage such as vaccines and medications for the best functionality of the hospitals. In addition, some of the respondents mentioned that solar installation has helped with food storage in some houses and the progress of work at offices during a power outage.

Another benefit includes the reduction of the use of firewood for lighting and cooking which lowers the number of people affected by respiratory diseases due to inhaling smoke produced using burning wood for cooking. There has also been an improvement in water availability and access to potable water due to solar pumping for the communities. Besides, the data collection findings showed that the use of renewable energy is helping students in their studies have a better opportunity to study. Furthermore, the results showed that a few socializing events such as TV projection shows, and dance events have been organized allowing people to socialize due to the electrification access. Overall, the use of renewable energy has helped several public facilities that have light and has added substantial social benefits in increasing small business activities thereby reducing the level of unemployment and contributing to better overall health.

Despite the benefits offered by the installation of renewable energy, the population growth rate in Togo is on the ascendency with an average of 2.84% annually which increases the demand for energy needs as well. For example, between 1981 and 2010 the total population rose from 2,719,567 to 6,191,155 ( International Monetary Fund, 2014 ) and it is currently estimated at 8,478,250 ( United Nations WFP, 2021 ). The population is unevenly distributed: 42% live in the Maritime region, which covers only 23.2% of Togo's total area. The disparity in population distribution and growth complicates development plans according to the International Monetary Fund (2014) . Togo's population is also highly mobile; a lot of people migrate in search of economic opportunities with some moving from rural to urban areas and others leaving the country. Most urbanization has occurred in the Greater Lomé Metropolitan Area, where 23.9% of the population resides. However, urbanization is poorly regulated, with no urban planning or environmental policies. Rapid and uncontrolled urbanization causes housing and infrastructure problems. According to the latest census data on the age and sex of the population, the proportion of young people remains high ( International Monetary Fund, 2014 ). This proves that fertility and mortality are still high, and 42% of the population is under age 15, and 60% is under age 25. The youth based on the lack of decent jobs are exposed to social scourges such as banditry, prostitution, delinquency, and alcoholism among others. Togo experiences migratory movements which are reflected by a rural exodus (especially to the capital Lome) and long-standing and significant international migration ( PND, 2018 ).

According to the interview results respondent believe that if there were better living standards in rural areas, less migration will be registered. Based on the literature ( Ayenagbo et al., 2011 ), field visit, workshops, and interview questionnaires, Togo is endowed with lots of potential for renewable energy among which solar and hydropower have been recommended based on the results of the data collection. Respondents believed that developing solar and hydropower in rural communities will help solve energy issues and socio-economic issues forcing the youth to migrate to urban cities.

Currently, several developmental projects are taking place in the country such as the installation of solar kits to provide lighting and water pumps to help the communities. Results from the non-governmental participants suggested that some of the issues associated with these installations are the lack of inclusion of local communities in developing their future energy needs. They recommended that proper planning for sustainability before implementation of each project and adequate monitoring after implementation are carried out to ensure the good functionality of projects for success. The inclusion of local communities in developing their future energy needs has been emphasized by Feron et al. (2016) . Their research findings prove that for a project to be accurate, it must meet the specific local needs and consider the socio-cultural reality of each community. Moreover, major progress on cultural justice, equity, and environmental awareness is needed for ensuring the sustainability of rural electrification efforts in Chile. In addition, Zalengera et al. (2014) in their research also stated technologies and their development methodologies including financing mechanisms should be adapted to contexts in which they would operate. They added this requires in-depth knowledge of several aspects such as energy needs and requirements; prioritization of energy services; purchasing power; satisfaction of energy services and experiences with prevailing energy technologies; social practices and social set-up of communities; and available technical skills. Furthermore, Kolios and Read (2013) in their approach to Risk Identification of the Tidal Industry in the United Kingdom emphasized the communication issues within the industry and its external stakeholders. They found local fishing communities must be considered at an early stage in marine energy development as well as the general public and local communities to better plan for the future.

It is worth noting that the lack of energy in Togo especially in rural areas remains a big issue impacting the lives of people. Most of these areas are endowed with resources such as solar potentials, presence of a lot of rivers, that could be developed, thus, permitting the installation of solar power technologies and small-scale hydro power that could bring a lot of benefits. For example, based on the response from data collection, participants in rural areas illustrated that the installation of solar in some hospitals has helped with the storage of vaccines, drugs, accessing vaccines, and anti-venom, thus, helping availability in these localities and saving many lives. Recommendations from the respondent suggested that the use of renewable energy could improve health issues because this will help reduce the use of a fire hood thereby a decrease in the amount of smoke which could lead to a reduction in respiratory diseases. For these, aside from the government subsidizing prices for a household with per solar kit per month, financing is needed to develop community installed solar plants for hospitals, schools, and solar water pumping for example to provide clean water to the communities amongst others.

Another key aspect of society is the need for education. This could be a powerful force for advancing opportunity, prosperity, and growth. There have been few trained personnel: 50 engineers, 100 experts, and 3,000 technicians that could help with a future project plan in the development of renewable energy. However, in general, the domestic financing of education in Togo has steadily increased, in nominal terms, while the share of education spending has, for its part, fluctuated, representing on average 17.3% of Total public expenditure. The total operating expenses absorb the largest part of the public education budget, this limits the government's ability to invest in education sector reform. Indeed, from 2014–2017, on average 98.4% of expenditure on education were devoted to the spending of operation, i.e., essentially the wages.

International funding has increased slightly between 2009 and 2017. The share of the funding sector of development partners by the ratio of total sector investments increased from 71% between 2009 and 2011 to 89% between 2014 and 2017. The proportion of bilateral aid was on average at 92% and that of multilateral aid at 8%. France and Germany are by far the two main funders of education in Togo. The volume predictability and quality of aid to the education sector have not changed much over the period examined. Partners' investment only materializes in the form of projects, which limits the predictability of aid and has probably contributed, at least in part, to restrict the capacity of the government of Togo to plan, properly implement and monitor and consistent with the Education Sector plan (PSE) 2014–2025 ( Universalia, 2019 ). Should the level of education improve this could impact people positively in a way that will help renewable energy development.

3.1.4. Technological

From Research question on ‘Solar energy was installed in 22 villages from 2013 to 2016 with the aid of the West African Economic and Monetary Union (WAEMU) project named “PRODERE” (“Programme regional de Developpement des Energies Renouvellables et d'Efficacite Energetique”). Do you know how those villages use the installed solar energy?' findings show that Law no. 2018-010 of 8 August 2018 relating to the promotion of the production of electricity based on renewable energy sources was introduced and based on participants from the Ministry of energy stated this law regulates the renewable energy sector and exempt taxes and customs duties on renewable energy equipment. Based on conversations with participants from a private organization, this law gives priority to renewable energy development and allows an increase in the national electrification rate by opening to the private's sector under state supervision while guaranteeing the quality of the installations. This is an advantage that encourages organizations to purchase equipment. However, findings from the interview showed some restrictions depending on the number of kWh consumed. Participants mentioned that tax exoneration benefits more companies with public interest that have some project and there is no benefit for individual or private companies that want to do business. Responses from participants showed that for consumption above 100 kWh, authorization and a license are needed by each actor in the private sector from the Ministerial decree which discourages SMIs and SMEs that are starting up.

With the constant growing of the population and increase in energy needs, efforts must be made to increase energy production to solve basic energy needs like cooking and heating. As Kolios and Read (2013) stated, firewood is becoming scarcer, and renewable energy technologies for cooking and heating such as solar cookers, solar water heaters, biomass briquettes, and biogas could be more important than small scale solar PV and/or wind energy technologies designed only for lighting, particularly for households. Policy makers must bear in mind sustainable development when deciding on priorities in terms of development. For now, the Togolese government is focused on increasing energy access to most Togolese and making plans to build a mini solar grid and increase hydropower capacity through the development of three projects namely Sarakawa (24 MW hydroelectric dam on the Kara River), Tetetou (use of the Mono River to construct a hydroelectric dam of capacity 50 MW), and Titira (plans to develop the hydroelectric project with capacity 24 MW) amongst others to achieve their set target of 100% electricity for all in 2030. To date, the most common technologies put in place are solar Panels for streetlights. This is a step forward which, however, will not resolve the energy issues facing the communities with regards to having energy for their basics needs for cooking, business, etc. For instance, making sure water pumping is installed in rural areas would be suitable for community water supply. Based on findings from the interview and field visit observations, the North of Togo has rivers that could potentially be used with solar powered plants to develop irrigation. This could be of big help to the farmers to continue their farming activities even in dry seasons and not only have to wait for raining seasons to grow their produce thereby producing goods and services in all seasons. In the same way, a solar powered value-added crop processing unit could also be put in place to help farmers grow, process, and store more agricultural products during all seasons of the year, thus, reducing poverty. These could be based on an example such as the one shown in Reza and Sarkar (2015) where the idea of solar irrigation in real practice was implemented and showed the economic and technical viability of a directly coupled solar photovoltaic irrigation pump system operating at Gaibandha, Bangladesh. Singh et al. (2012) also developed a solar powered pump controller, using a fuzzy logic control strategy to feed water for cultivation. This was tested with the growth of vegetables like a tomato plant that resulted in saving 50–60% in water consumption and the cost of energy generation.

Another important factor to consider is the production of technologies that are suitable for the environment in which they are being used for good functionality and reliability. It is, therefore, essential to increase training to use available equipment and develop expertise that will help have people capable of producing components and systems in house that are techno-economically viable. Doing this will reduce the risk of getting inappropriate technologies like that of the broken-down water pumps supplied by a previous project in Southern Togo. It is worth noting that this technological analysis mainly focused on solar energy application and development because other sources of renewable energy such as wind and biogas are not really in use thereby the lack of in country data to access the impact these have had. Biomass such as firewood, charcoal, and vegetable waste is mostly unclean and highly pollutant when burnt as discussed above which can create health problems ( Awopeju, 2020 ; Kyayesimira and Muheirwe, 2021 ).

3.1.5. Legal

Most renewable energy technologies used in Togo are imported. In 2018, Togo approved another IPP for a 65 MW Thermal power generation plant and has taken significant strides to reform its legal framework to attract private-sector investment ( USAID, 2021 ). The government put in place the following laws ( LSE, 2022 ):

• Finance laws 2020 and 2021: This law notably provides for exemptions or relief from the tax burden (customs duties and VAT) on the import of new electric and hybrid vehicles. It applies for a duration of a maximum of 5 years.

• Law on the promotion of electricity generation from a renewable source (2018): This law aims at enabling the country to enjoy 50% of renewable sources in its mix of electricity supply by 2030, in line with its electrification strategy spanning the period 2018–2030 (Horizon 2030).

• Law 2008-005—Framework law on the environment: This law sets the general legal framework for environmental management in Togo. It aims to:

- Preserve and sustainably manage the environment.

- Guarantee to all citizens an ecologically sound living environment and balanced.

- Create conditions for rational and sustainable management of resources natural for present and future generations.

- Establish the basic principles for managing, preserving the environment against all forms of degradation in order to develop natural resources, and fight against all kinds of pollution and nuisances, and

- Sustainably improve the living conditions of the population while respecting the balance with the surrounding environment.

The 2018 renewable energy law also applies to the safety, operation, storage, marketing, and security of renewable energy sources. Based on interviews with stakeholders, taxation is still expensive on imported solar kits as well as batteries causing high cost of energy. In addition, based on discussions, tax exemption is considered in some cases such as in the case of companies with the public interest and does not benefit private's organizations. This is because the government wants to be selective about the type of companies that starts. It was also revealed from data collected, that heavy consumers are charged 18% for tax. Lowering taxes on renewable energy technologies equipment without being too selective on a certain category of companies or consumers will enhance the affordability of renewable energy systems and lead to better adoption and diffusion. It is therefore, necessary for a more transparent and equality legal framework to be put in place to regulate and offer clear coordination among the Togolese tax service staff that oversee importation activities.

Another issue affecting most of the Togolese communities is health issues resulting from the lack of clean water and the use of firewood. Wood for instance is used for cooking exposing villagers to smoke pollution (causing respiratory disease), cold, and wind during Harmattan (because of the excess in cutting trees that are being used for firewood). If favorable policies are put in place to encourage communities to obtain part of their energy for cooking and water heating from renewable energy sources, this could reduce the use of firewood, thus, reducing health issues and saving lives. Similar policies have been key drivers of renewable energy technologies in Western countries whereby energy suppliers are obliged to source part of their energy from renewables ( Zalengera et al., 2014 ).

3.1.6. Environmental

Most of the renewable energy development outlined above is being used for electrification, water pumping, and basic needs based on the findings from the data collection. The majority of households in rural areas continue to rely on the use of firewood for cooking causing women to inhale a lot of smoke while taking home cores. This continues to cause respiratory issues amongst other health issues. There is a need for Governments to identify energy technologies that will be appropriate based on the local concept and communities, and affordable. Currently, an important barrier is the high cost of solar equipment which discourage its wide adoption. It is essential that instead of importing renewable energy technologies, a critical evaluation and research is done in house to identify the best technology that will be most appropriate to Togo and build appropriate knowledge to help manufacture these technologies in house at reduced prices. Besides, if strong policy regulations are put in places such as the introduction of laws that protect air quality, water, and the environment this will encourage people to switch to best practices for better results.

Togo is aware of the major environmental risks it faces especially issues with coastal erosion, deforestation, desertification, and climate change ( PND, 2018 ). Currently, the energy sector set a high potential to reduce greenhouse gas emissions by 2030. On the national level, for instance, Togo is committed to reducing its emissions by 11.14% by 2030 and 20% afterward ( PND, 2018 ). From the discussion with some participants from the electricity company, there is major pollution from the thermal power stations coupled with damage to the soils. All these issues could be solved by increasing the share of renewable energy and reducing the amount of pollution from thermal power stations, reducing pollution resulting from cooking with firewood, deforestation, desertification, and climate change by switching to the use of solar cookers and water heaters. If all these are investigated carefully and environmental and legislation policies are put in place, a better impact could be achieved. This is supported by Kolios and Read (2013) who stated that developers must consider the bigger picture and how their actions may have detrimental effects on the environment at any stage of the project.

4. Discussion

The energy sector does not contribute effectively to economic development, in particular to the improvement of agriculture, industrial, and mining productivity. Togo is weakly endowed with modern energy resources and still depends largely on traditional energies mainly wood energy which constraint population growth and climate change. In addition, the monopoly of the electricity sub-sector hinders the development of mini grids in rural areas ( PND, 2018 ).

To date, petroleum products are still the main modern energy accessible to rural areas. Togo's dependence on these energies is more worrying as domestic and industrial demand is growing steadily. The following are noted ( PND, 2018 ):

• Instability of the prices of petroleum products due to insufficient security stock of petroleum products.

• The weak national capacity to cover national gas needs.

• The country's 100% dependence on oil-producing countries particularly on fluctuations in the price of a barrel of oil.

• Low capacity and dilapidated hydrocarbon storage infrastructure.

The PESTEL and SWOT analysis above provided detail with regard to the benefits, motivation, barriers, and possible solutions for each factor. To summarize, in the past decade, the following development keys point could be noted:

4.1. Increase in energy production and a decrease in the importation

The total energy production purchased in 2009 was estimated at 713.01 GWh according to the electricity company of Togo report ( CEET, 2010 ) with a percentage of only 3.2% production. This amount increased to a total of 1,094.0 GWh in 2015 ( ARSE, 2015 ); 1,258.25 GWh in 2018 (Energy purchased was 872.63 GWh, and energy produced by CEET was estimated at 12.23 GWh and that of Contour Global 373.39 GWh, therefore, a total of 385.62 GWh ( CEET, 2018 ). Energy purchase plus production further increased to a total of 1,350.35 GWh in 2019 with 64.52 and 35.48% of energy purchased and energy produced in the country, respectively. This breakdown is shown in Table 6 . This variation shows some positive development as mentioned by the PESTEL and SWOT factors.

Table 6 . Estimation of energy purchased and production for the years 2009, 2018, and 2019.

4.2. Increase in total customers or number of subscribers and an increase in energy access rate

In 2009, the total number of customers was 1,61,654 ( CEET, 2010 ), and the access rate in 2010 was estimated at 25% according to Sustainable Energy for All (2012) . This increased to 27.62% in 2013 with an estimate of 2,33,036 electricity subscribers which further increased to 4,38,911 clients in 2018 ( CEET, 2018 ). The national electrification rate increased to 45.09% in 2018 and 50.3% at the end of 2019. This increase is due to the continued investment in the extension of the distribution network, which favored more access of the population to connect to electricity ( ARSE, 2019 ). Table 7 shows the access rate per region in the years 2010, 2011, 2018 and 2019.

Table 7 . Breakdown by region of the electrification rate.

4.3. Increase in the share of renewable energy

Renewable energy development in Togo has increased in the past decade. Details of the recent development of Renewable Energy in Togo are presented in section 4. As discussed in section 5.3.1.2, based on the CIZO project discussed in section 4, the total number of recorded customers that have active solar kits installed by December 2019 were 40,199 and 1,003 for BBOXX and SOLEVA respectfully. These installations were done between 2017 to 2019. It is worth noting that the national capacity supply for the various energy needs in 2019 increased by 317.59–339.56 MW, an increase of 6.92%. The share of renewable energy in 2019 was 11.65% against 11.83% in 2018 ( ARSE, 2019 ).

In 2008–2010, the share of renewable energies (excluding biomass) was essentially made up of hydroelectricity of national origin which represents 0.3% of the total supply or 1.57% of conventional energy supplies (electricity and petroleum products) ( Sustainable Energy for All, 2012 ; World Bank, 2013 ). The share of renewable energy in the mix increased to 7.27% in 2019 ( ARSE, 2019 ). This shows progress in the development of renewable energy within the country. A summary of the estimation of the electric power generation based on renewable energy sources in 2019 is shown in Table 8 .

Table 8 . National estimation of renewable energy in 2019.

4.4. Introduction of renewable energy law

With regards to Law No. 2018-010 of 8 August 2018 relating to the promotion of the production of electricity based on renewable energy sources, the legal arsenal in Togo was strengthened in December 2019. As shown in the PESTEL discussion, this is an advantage and a good starting point for development. This law establishes the general legal framework for the implementation of electricity generation projects based on renewable energy sources, either for own consumption or commercialization. It defines the legal regulation of the installations, equipment, materials, and movable and immovable goods necessary for the production, storage, transport, distribution, marketing, and consumption of electricity from renewable energy sources ( Energypedia, 2020 ). This law also applies to the safety, operation, storage, marketing, and security of renewable energy sources ( Loi Energie Republique Togolaise, 2018 ). There are various decrees that specify the Renewable Energy Sources Act for individual measures. The decrees serve:

• To determine the performance thresholds of the various legal regulations for electricity generation projects based on renewable energy sources (Decret No. 2019-019, 2019).

• To determine the conditions for concluding and terminating concession agreements for the generation and marketing of electricity from renewable energy sources (Decret No. 2019-018, 2019).

• To determine the conditions for granting and withdrawing the license for the generation, distribution, and marketing of electricity from renewable energy sources (Decret No. 2019-021, 2019) or

• For the creation, allocation, organization and functioning of the Togolese “ageance d'électriffication rurale et des énergies renouvelables” (AT2ER) (Decret No. 2016-064, 2016).

5. Conclusion

From the PESTEL analysis the following key results were noted:

Subsidizing the price of equipment acquired by each individual or household for couple of years does not guarantee long term affordability and use but a long-term solution to the high capital costs of the technologies is to be investigated for better adoption. Thus, institutional sustainability is a key reason for the development of renewable energy.

The few installed solar kits and power plants have contributed to helping children study and lowering the cost spent in buying kerosene for the lamps. It also helped women/small business owners have extended time to continue their activities and improve productivity, encouraged professional activities thereby providing additional income to the users, thus, improving the economic situation of the households. In addition, social records indicated that self-employed farmers were found to have the highest poverty rate with higher poverty rates found in rural areas. Besides most of these areas are not connected to the electricity grid.

Other benefits of the installed solar included providing lighting for health centers that helped store vaccines and medications, food storage, provided improvement in water availability, and access to potable water due to installed solar water pumping for the communities. Besides, these provided light to a few facilities and added substantial social benefits in increasing small business activities thereby reducing the level of unemployment and contributing to better overall health. This is an advantage that will go a long way in allowing youth to concentrate on small businesses instead of devoting their time to social scourges such as banditry, prostitution, delinquency, and alcoholism among others as well as cut down the rural exodus to the capital town for example.

The results also showed issues associated with installations in previous projects which is due to the lack of inclusion of local communities in developing their future energy needs. It was found out that there is a need for proper planning for sustainability before the implementation of each project and adequate monitoring after implementation is carried out to ensure the good functionality of projects for success. The study also showed that there is a need for education/trained personnel which could be a powerful force for advancing opportunity, prosperity, and growth.

The results also showed that there could be an improvement in terms of tax exoneration so individual or private companies that want to do business can also benefit from it. Besides, the results showed that the North of Togo has rivers that could potentially be used with solar powered plants to develop irrigation that could be of big help to the farmers to continue their farming activities even in dry seasons thus producing goods and services at all seasons.

From the result, most households in rural areas particularly continue to rely on the use of firewood for cooking causing women especially to inhale a lot of smoke which continues to cause respiratory issues amongst other health issues. It also showed that policy regulations are needed such as laws that protect air quality, water, and the environment to encourage people to switch to best practices. Finally, taxation is still very high on imported solar kits and batteries causing the rise in cost of energy.

Altogether, there are many advantages associated with the use of renewable energy technologies that should be critically considered in decision-making toward a pathway to achieve the development of renewable energy technologies. Investors may want a quick return on their investment and if regulations and laws do not help them to invest due to the high cost of equipment and taxes and consumers' interest, it will be difficult for them to invest. In house capacity building to help with the design and manufacture of equipment that are affordable and efficient within Togo could remediate these issues. In addition, it could help reduce the importation of kits at high cost as well as the risk of acquiring technologies that are not appropriate for Togo.

In addition, the Togolese Government needs to engage with different funding bodies that could assist in putting up in place policies that favor off-grid and poorest communities. This is because, without Innovative financing mechanisms, the adoption of renewable energy technologies will remain low.

The community interest for instance will be a focus on achieving socio-economic and environmental impacts to better their living conditions. It is, therefore, important to include the local communities in developing their future energy needs. Furthermore, if proper planning before the implementation of each project is done, the right equipment will be put in place for the benefit of the communities.

Finally, aside from introducing subsidies in prices for households, financing is needed to develop communities installed power plants in a way that will be sustainable for the communities in meeting their own needs without having to always seek the help of experts from outside of their communities. This could be achieved by raising awareness and developing training programs for skills needed by personnel within each community. It is worth mentioning that Togo took steps in providing a 2-week training in collaboration with Kya Energy Group and the University of Lome for 3,000 technicians in 2019 (600 technicians per region in all five regions of Togo) for the CIZO project. The hope is to be able to employ all those trained technicians in the future once the upcoming project is executed. However, the training provided was based on imported equipment and to date, none of the trained staff is employed.

Data availability statement

The data analyzed in this study is subject to the following licenses/restrictions: none. Requests to access these datasets should be directed to JN, j.njuguna@rgu.ac.uk .

Author contributions

Conceptualization, data curation, formal analysis, funding acquisition, investigation, methodology, project administration, resources, software, validation, visualization, and writing—review and editing: NK, JN, and SV. Supervision: JN and SV. Writing—original draft: NK. All authors contributed to the article and approved the submitted version.

Acknowledgments

The authors are thankful for access and support of the Togolese Government including the Ministry of Agriculture, Livestock and Rural Development who helped fund some of the field work. NK acknowledge partial PhD studentship funding by the School of Engineering at Robert Gordon University.

Conflict of interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Publisher's note

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.

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Keywords: sustainable development, renewable energy, impact, solar power, hydropower, PESTEL analysis, SWOT analysis, Togo

Citation: Kansongue N, Njuguna J and Vertigans S (2023) A PESTEL and SWOT impact analysis on renewable energy development in Togo. Front. Sustain. 3:990173. doi: 10.3389/frsus.2022.990173

Received: 09 July 2022; Accepted: 28 November 2022; Published: 07 February 2023.

Reviewed by:

Copyright © 2023 Kansongue, Njuguna and Vertigans. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) . The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

How To Do A Pestle Analysis In 6 Steps

A PESTLE analysis is a tried-and-true approach for identifying macro-environmental factors that might impact an organization.

This type of assessment can help teams with strategic decision-making, business analyses, and navigating periods of change. 

But, if you’re doing strategic planning for a large organization, division, or multiple SBUs, performing a PESTLE analysis quickly, accurately, and consistently can be challenging to get right.

This article will cover everything you need to know to complete a PESTLE analysis for your organization, including when you should do it, and how to combine it with other strategic frameworks.

• PESTLE, PESTEL or PEST analysis is a strategic framework used to identify macroenvironmental influences on an organization of a business.
• The PESTLE framework divides external influences into six sections: Political, Economic, Social, Technological, Legal, and Environmental.
• Pros: PESTLE is simple to understand and use, making it a good framework for businesses of all sizes.
• Cons: The validity of PESTLE assessment largely depends on the quality and amount of information available to an organization.

⚠️ Go beyond the forecast! Understanding external factors is crucial, but strategic advantage comes from action. Cascade Strategy Execution Platform bridges the gap between analysis and execution. Talk to our experts to transform your PESTLE insights into an actionable plan for navigating change and seizing opportunities.

When Should You Do a PESTLE Analysis?

While it may not be needed for all strategy-related activities, every company has multiple use cases for PESTLE analyses. Here are a few common examples:

• Strategic planning: PESTLE is a useful starting point for most strategic decision-makers and it can help lay the groundwork for more in-depth research. 
• Reviewing market position : Companies can use PESTLE to better understand shifts in market position over time and contextualize organizational growth, decline, or stagnation.
• Marketing planning: PESTLE can offer marketing teams valuable insights into external factors that impact marketing, PR, and advertising projects.
• Product development: PESTLE is helpful for understanding consumer sentiment from various angles and can assist organizations that want to know how products should be designed, changed, or marketed.
• Organizational change: Whether an organization is changing direction, restructuring, or expanding, a PESTLE analysis, combined with other strategic frameworks , can provide valuable information about external factors that will impact transformation initiatives.

What Are the 6 Elements Of PESTLE?

A PESTLE or PESTEL analysis divides macroenvironmental elements into six categories, each of which can impact an organization differently. Here are the six PESTLE factors:

Political factors

Political factors relate to the political interactions between governments, countries, and various political actors. 

For example:

• Diplomatic relations between countries
• Political stability and continuity
• How governments operate
• The prevalence of civil society
• The potential for political unrest
• Foreign trade policies

Economic factors

These encompass the key economic elements within the business environment that can impact your organization.

• Exchange rates
• Interest rates
• Economic growth rates
• Corporate taxation rates
• Unemployment rates

Social factors

Social factors or sociocultural factors define group consumer behavior and thinking. They can include quantitative, such as average age, and qualitative data, such as opinions.

• Demographics
• Education levels
• Social views
• Age distribution
• Disposable income
• Cultural stability

Technological factors

Technological factors are tech-related developments, shifts, and patterns that could directly or indirectly impact your business. This can include broader global or regional conditions.

• Internet connectivity
• Specific technologies, like automation
• Advancements in your industry
• Intellectual property
• Rate of technological change
• Research and development lifecycles

Legal factors 

Legal factors are current laws, regulations, and bills that may affect the organization’s operations and future plans. 

• Competitive regulations
• Health and safety regulations
• Government policy
• Tax policies
• Antitrust laws
• Import/export laws

Environmental factors

Environmental or ecological factors look at the impact of businesses on the environment and how the environment might affect the business.  

• Natural disasters
• Weather patterns
• Consumer health
• Climate change
• Resource availability

How Do You Do a PESTLE Analysis Step By Step?

While there is no clearly defined way of doing a PESTLE analysis from start to finish, a systematic planning process and approach can increase efficiency and impact.  

Here are six steps to do a PESTLE analysis the right way.

1. Prepare for your analysis 

Before you begin, lay the groundwork to ensure accuracy, quality, and focus. The saying “measure twice, cut once” will pay dividends down the line.

Create a founding document that answers these questions:

• Why — The reason you’re conducting a PESTLE analysis.
• What — The scope, goals , and initiatives.
• Who — The key people needed in the analysis process. 
• Where —  Where are we going to look for information?
• When — The deadlines for the data and final insights.

Answering these questions will explain how to approach your PESTLE analysis. 

Finally, organize a meeting with involved team members and stakeholders to present the plan, communicate success metrics, and get feedback.

2. Collect data for your PESTLE analysis

Gather the information you need to fill out your PESTLE diagram. This may require primary research and consultation with external industry experts. You will likely need various types of data and information.

But don’t get bogged down in data and research. A PESTLE analysis is meant to speed up traditional research by focusing your efforts.

To streamline the process, concentrate on one area at a time and address them sequentially according to the acronym. That way, team efforts can be focused, and progress tracking can be easier.

3. Complete a PESTLE diagram

It’s time to make sense of your research by putting the collected information into a PESTLE diagram. 

Remember that PESTLE analysis aims to cut through the noise and provide a clear idea of the external environmental influences to consider.

Divide the factors and segment them appropriately, making them easy to understand for the rest of the team. For example, if you are listing social factors, divide this list into sub-sections, such as consumer behavior, cultural norms, and work-related matters.

4. Interpret and evaluate your results

Use this information to interpret the macroenvironmental factors that can impact your organization's future plan and come up with strategies to handle them. 

Remember, not all factors will have the same impact and importance to your organization. You can use tools like a risk matrix to assess the probability of occurrence and impact on your organization. This will help you to focus your efforts and prioritize strategic initiatives . 

Add additional context to your analysis by including data from other strategic frameworks you’re using, such as a 7S Model , Porter’s Five Forces, or GE Matrix . 

Each strategic framework offers a different perspective to help with:

• Understanding how macroenvironmental factors intersect and interact.
• Spotting missed opportunities and threats for your business.
• Determining how your organization is best-equipped to handle potential issues.

5. Put together an action plan

Use insights from your PESTLE diagram and other strategic analyses to create an action plan that addresses identified risks, threats, and opportunities. 

For example, the rising logistical cost (a combination of technological and economic factors) of moving products to particular markets could be handled in a number of ways, such as: 

• Shifting the organization’s growth focus to other markets.
• Insourcing key parts of the logistics chain.
• Revising the organization’s pricing strategy.
• Developing internal capacities to build components.
• Outsourcing production to a third party in another country.
• Lobbying governments to reduce trade tariffs and excise fees.

Once your plan is in place, start executing .

6. Review and monitor external signals

New technology can disrupt an industry, diplomatic relations can sour, and customer sentiment can shift. 

Any strategy that doesn’t evolve and adapt won’t have an actual impact. Make sure that revision and monitoring are fundamental parts of your strategic processes.

You need to treat strategy, execution, and analysis as complementary elements if you want to create an adaptive strategy and successfully manage disruptions.

💡Tip: Use a strategy execution platform like Cascade to speed up and improve strategic business planning and execution. With Cascade, you can plan, measure, and report on strategic initiatives all in one place. By bringing your team in, you can collaborate on shared goals without spending time in meetings to keep everyone aligned.

PESTLE Analysis Example: Starbucks

Starbucks is well known across the world with 32,000 locations in over 80 countries. Here’s an example of how a PESTLE analysis might look for this global coffee brand:

• Political awareness and activism in different countries. 
• Political sentiment towards ethical sourcing strategies and conformance to “Fair Trade” practices.
• The possibility of war or conflict in regions that have Starbucks locations.
• Sanctions and diplomatic relations between the U.S. and other countries.
• Economic recessions or booms in specific countries.
• Fluctuating exchange rates impacting supply chain activities.
• The average income of Starbucks customers.
• Operational costs in different cities, states, and countries.
• Consumer behavior in response to economic conditions.
• Changing consumer preferences and buying habits around coffee.
• Specific preferences based on region, culture, and history.
• Age groups of people who drink Starbucks coffee.
• Changing work patterns (remote vs location-based work).

Technological

• The increased use of at-home coffee brewing equipment.
• The shift towards digital avenues of marketing and interaction.
• The growing use of e-commerce globally.
• Technological innovations in coffee agriculture and processing methods.
• Infringement on the Starbucks logo, color scheme, and other copyrights.
• Varying tax obligations in different regions.
• Customs, tariffs, and import requirements.
• Compliance with specific workplace legislation.
• Health and safety regulations in factories, stores, and other facilities.

Environmental

• Farming and processing impacts, such as water usage and carbon footprint.
• The effect of single-use packaging, such as paper and plastic cups, and straws, on the environment.
• Extreme weather and natural disasters in areas where Starbucks coffee is farmed.

📚 Recommended reading: 

Strategy study: How Starbucks Became Everyone's Cup Of Coffee

What Are PESTLE Advantages?  

• Provides additional context for business direction and strategic planning .
• It helps strategic planners quickly identify external threats and opportunities.
• Organizations can use PESTLE to better understand the impact of different risks on their business strategy.
• It can be combined with other strategic analyses , such as SWOT, to accurately identify an organization's position in the market.

What Are PESTLE Disadvantages?  

• If efforts aren’t focused, research and data collection can become overwhelming.
• PESTLE shouldn’t be considered a one-off task and should be done repeatedly.
• External factors can rapidly change, meaning a PESTLE analysis has a limited validity window. 
• The accuracy of PESTLE relies on the quality and amount of data available to an organization.

PESTLE vs SWOT Analysis: How To Use Both?

Take your strategic analysis further by combining PESTLE with a SWOT analysis . SWOT can help interpret the data from a PESTLE analysis by contextualizing it with your business’s unique strengths and weaknesses.

Both analytical frameworks have their place in strategic planning. However, using both will give a complete picture of your business’s position, potential, and risks.

Turn Insights Into Results With Strategy Execution Software 🚀

A PESTLE analysis can identify macroenvironmental factors that can impact organizations. But strategic planners need more than analytics and insights to execute a business approach that will actually have an impact.

And, if your processes are fragmented, uncoordinated, and stuck in the planning phase, you won’t reap the full benefits of PESTLE or any strategy planning tool .

That’s where Cascade comes in. Cascade’s strategy execution platform is purpose-built to help businesses spend less time planning and more time executing what matters.

Get started for free or schedule a call with a Cascade expert to see how you can hit more goals and deliver business results faster. 

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PESTLE Analysis

Insights and resources on business analysis tools

PESTLE Analysis Examples to Better Explain the Framework

Last Updated: Apr 4, 2024 by Jim Makos Filed Under: PEST Analysis , PEST Examples

Before discussing some PESTLE analysis examples in the next 6 minutes, let’s remind ourselves that PESTLE analysis is an incredibly popular business analysis tool. Not only is it extremely easy to use , but it’s also very effective . PESTLE analysis helps you analyze a chosen organization from six different perspectives: Political, Economic, Social, Technological, Legal, and Environmental . By doing so, you unlock a powerful understanding of how a given business is performing from every angle. Despite its apparent simplicity, many beginners struggle with conducting their own PESTLE analyses. In this article, we want to eliminate any confusion surrounding this unique business analysis tool. Today’s PESTLE analysis examples will demonstrate how you, too, can use it.

What is PESTLE Analysis

As touched on above, PESTLE analysis is a business framework that looks at things from six crucial viewpoints. To conduct a PESTLE analysis, you find as much information as you can about the business, and separate it between the six categories. The key to getting the PESTLE analysis template right is understanding what each category of PESTLE analysis factors stands for. Remember, these are external factors that an organization has no control over. Find more about external factors here , as PESTLE is not the only type of analysis that relies on them ( STEEP is another)!

Now, let’s examine some external forces examples for better comprehension.

Political factors examples

Every organization operates within some kind of political environment. The question is: how does that political environment affect the business itself? In this category, you’ll find information about everything from international relations (which can affect an organization’s ability to do business across borders) to political instability (which can severely thwart an organization). For a complete list of political factors affecting a business or organization, we have a complete guide here .

Economic factors examples

Similarly, every organization is exposed to the economies of the markets in which it operates. The beauty of PESTLE analysis is that you can consider factors as broad or as specific as you like. For the economic factors affecting a business, you can discuss the international economy, national economies, or even regional economies. For a complete list of economic factors affecting a business or organization, click here .

Social factors examples

An important part of any business is the consumer. The sociocultural column of PESTLE analysis allows you to explore how trends in society and culture — which are ultimately trends in the consumer — affect a business. For example, if a business sells just one specific product, how is the consumer approach to that product changing? For a complete list of social factors affecting a business or organization, check out this article .

Technological factors examples

Businesses are becoming increasingly technological, hence the importance of the T in the PESTLE analysis template. This is your chance to explore any of the technological factors affecting a business, including both technological constraints and advancements. This may refer to access to technology within a given region or the development of new technologies within an industry. But there are a lot more in technological factors, as we have seen here .

Legal factors examples

If you’re familiar with PEST analysis , you might have noticed that PESTLE analysis is the same thing — just with an added L and E. Of course, the L in PESTLE analysis refers to legal factors. Often, these legal factors have some overlap with political factors — but not always. Examples of topics that might be discussed in this category include trade laws, labor laws, and intellectual property laws, and how each affects a business. Here is a complete list of legal factors.

Environmental factors examples

A category of growing importance is the environmental one. Many businesses, especially those in primary industry , have some kind of impact on the environment. This part of PESTLE analysis is about knowing what that impact is, what effects that might have, and how businesses can improve in this department. Here is a more detailed explanation and a breakdown of environmental factors.

Simply put, PESTLE analysis is about filling out a brief profile about an organization for each of these categories. As long as you know what to put in each category (which we hope we explained well enough above), then it’s just a question of sourcing your data. For more information about that, we highly recommend our step-by-step guide on how to do a PESTLE analysis .

PESTLE Analysis Examples

If you’re new to PESTLE analysis, some examples are probably what you want to see most. In this section, we’ll introduce you to some PESTLE analysis examples of both countries and businesses.

PESTLE Analysis Examples of a Country

Unlike other business analysis tools, PESTLE analysis works just as well for countries as it does businesses. That’s right: you can analyze the standings of an entire country with the PESTLE model!

When referring to countries, here’s what PESTLE analysis often looks like:

• Political: What are the country’s political relations like with others?
• Economic: How is the country’s economy doing?
• Sociocultural: What impactful societal and cultural customs does the country have?
• Technological: How is the country with regard to adoption and development of tech?
• Legal: What is the legal landscape like in the country?
• Environmental: What is the country’s impact on the environment?

Here are four PESTLE Analysis examples of countries that you can find on our blog. We purposefully picked three completely different countries to give you an idea of how the results differ:

• PEST analysis of Germany
• PEST analysis of China
• PEST analysis of Canada
• PESTLE Analysis of Japan

Between those three PESTLE Analysis examples, you should get a pretty clear idea of what PESTLE analysis of a country should include exactly.

PESTLE Analysis Examples of a Business

Aside from analyzing countries, you can, of course, analyze businesses with the PESTLE analysis framework. Earlier in this post, we detailed how you can interpret each of the six categories of the acronym. If you follow the advice given up there, you shouldn’t have any trouble with knowing what to include!

Here are three PESTLE analysis examples of businesses which you can find on our blog:

• PESTLE analysis of Nike
• PESTLE analysis of Apple
• PESTLE analysis of Tesla

If you read through those three PESTLE analysis examples, we guarantee you’ll be ready to create your own!

PESTLE Analysis Examples of an Industry

Apart from businesses, organizations and countries, PESTLE analysis and other business frameworks can be used on whole industries. We can do a PEST or a STEEPLE analysis for example, on industries to assess the external factors that influence all the companies that are doing business in that niche.

Here are some PESTLE analysis examples on individual industries:

• PESTLE analysis of the Food industry
• PESTLE Analysis of the Real Estate Industry
• PESTLE Analysis of the Logistics Industry
• PESTLE Analysis of the Agriculture Industry
• PEST analysis of the Healthcare industry
• PEST analysis of the Airline industry

More PESTLE Analysis Examples

If you’re looking for more great examples of PESTLE analysis, we highly recommend you take a look around our website here at PESTLEanalysis.com. You can try searching for “PESTLE”, a specific company, or “industry” on the top right, and look around the blog yourself for a complete selection of business analysis information, including PESTLE and many other techniques.

As you can see, PESTLE analysis is a pretty simple business analysis tool. You simply gather up as much information as you can about a business or country, and then spread it across the six PESTLE categories: Political, Economic, Sociocultural, Technological, Legal, and Environmental. You now know how to to a PESTLE Analysis by yourself.

We hope you found our PESTLE analysis examples helpful, and wish you the best of luck with conducting your own analysis!

Guide on How to Write PESTLE Analysis

Nowadays, almost every company can operate in any country, thanks to internationalization and globalization. However, there are certain conditions to consider before opening a branch in a new place. You may have heard few variations of analysis' name: PESTEL, PESTLE and PEST. PESTEL or PESTLE is the same, and this analysis concerns political, economic, social, technological, legal and environmental aspects. A PEST analysis covers all the factors mentioned above, apart from legal and environmental aspects. This article from EssayPro contains an extensive guide on the PESTLE analysis, which is fundamental for understanding the possibilities for entrepreneurship in a country.

Whenever you carry out the PESTLE analysis for business, you automatically get acquainted with the chosen place's peculiarities. If top managers research beforehand, they might face severe consequences like low profits or even the inability to work under certain circumstances.

What Is PESTEL

Everybody would probably agree that interest rates or health and safety laws affect business regardless of its field and other specific characteristics. Also, political instability can cancel out a country's positive aspects of high technological awareness. Moreover, inflation rates and buying trends determine the decisions of a business owner who does strategic planning.

All of the factors mentioned above are a drop in the business environment. To avoid chaos, scientists systematized the determinants of the climate where a business operates. Hence, every PESTLE analysis example becomes a detailed critical analysis of the company’s surroundings that affect its performance.

What Are the Components of the PEST

The more concise version of PESTLE (PESTEL) analysis is PEST. Although it covers fewer internal and external factors, it still gives factual information about the following determinants:

• Political factors

Indeed, political factors are one of the first to consider when entering a new market. If a country can boast its political stability, it instantly becomes attractive to numerous investors worldwide. An entrepreneur wants to be sure that the current government is interested in creating a safe environment for foreigners.

• Economic factors

The second influential segment includes economic factors. Everything from interest rates and exchange rates to the percentage of annual economic growth and trade tariffs has an impact. So, naturally, economic instability scares away potential investors.

• Social factors

Next, a company’s management assesses social factors. Here, aspects like population growth rate, health consciousness, or age distribution determine the appeal of the business environment. The enterprise needs lots of skilled workers and potential buyers to operate successfully.

• Technological factors

Why do technological factors matter for businesses? Let’s say that a company originates from a country where many new technologies, like artificial intelligence, are usual. Adjusting to the new environment could be complicated if the firm chooses a place with fewer technology incentives.

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What Is PESTLE Analysis Used For

PESTLE analysis helps calculate possible risks and profits. First, political factors determine whether the country is open to new ventures. Second, economic factors show how prosperous the place is. Third, the category of social factors reflects the demand for a product or service. Finally, the level of technology and legal factors demonstrate how climate change or global warming might affect your business decisions.

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PEST Analysis Examples

Are you looking for a sample paper on PESTLE factors? Here, you can find a suitable PESTLE analysis template highlighting a business's economic, social, technological, legal, and other factors. Generally, a high-quality PESTLE analysis example includes consumer protection laws, employment laws, or corporate social responsibility. In the current economy, strategic thinking is a good competitive advantage for every specific business. Indeed, all PESTLE components help better understand buying habits, trade restrictions, technological change, etc.

PESTLE Analysis of Apple

Strategic decision-making for a technological giant must include examining political, economic, social, and technological factors. Undeniably, the PESTLE analysis of Apple helps to build a proper business plan for operating in other countries like China.

Political stability is one of the essential components of the external environment. While Apple has zero issues with safety regulations or fiscal policies, it may suffer from international conflicts. The trade war between China and USA perfectly illustrates how governments affect companies’ performance. First, China's decreasing scale of cheap manufacturing leads to higher production costs. Also, both countries raise import taxes, that increase the product cost.

Since Apple products are on the pricey side, determinants like economic growth and purchasing power are important for successful ventures in foreign countries. Nowadays, Asian countries like China demonstrate stable growth of gross domestic product and increasing buying power of their citizens. Consequently, opening new branches in prosperous places might increase profits.

Another component of PESTLE analysis for business are social specifics of the target country. For instance, in places like China, population growth rates exceed expectations. Therefore the enterprise gets enough workers and consumers. Moreover, Apple’s marketing efforts make people perceive their products as luxury. So, the buyers’ desire to show high status can boost the demand among the Asian population. However, the US trade war with China may also negatively affect Apple sales.

The next segment of the PESTLE model covers technological advancements. For Apple, external factors like the level of technological development are critical. Companies like Samsung, Xiaomi, and Lenovo fight for bigger market shares by implementing innovations. At the same time, Apple barely comes up with anything revolutionary in their gadgets, so their target audience often chooses other brands.

• Legal factors

The legal macro environment often includes safety laws or patent laws and other legislation regarding any business activity. Apple has a strong brand, so to maintain a good public image, this company avoids getting into law scandals. Still, this business takes risks by working with music and software that has copyright and patent protection. In case of a lawsuit, the loyalty of Apple customers may suffer drastically.

• Environmental factors

The final segment of the PESTLE analysis studies environmental issues like climate change or environmental regulations. For instance, Apple can generally withstand global warming or other weather changes by placing its factories in safe areas. However, the strict environmental policy of countries like China makes Apple make environmentally friendly choices in its production processes, like ditching lithium batteries. This way, the brand can maintain an even better reputation in the target country.

Overall, the PESTLE analysis has shown the aspects of the macro environment that affect Apple’s performance abroad. In addition, the examination has demonstrated both drawbacks and advantages of the company’s policy. Although Apple has to adjust to the changing environment to stay relevant, it still has multiple strong sides.

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McDonalds PESTLE Analysis

Whenever prominent corporations want to operate in a wider business environment, they study the economic, technological, legal, and environmental state. In other words, a company wants to know what to expect in a new market. The information about  these determinants and even more is available in the Mcdonalds PESTLE analysis:

Since Mcdonald's is the largest and most famous fast food company, most of its concerns connect to food safety. Many countries have stricter safety standards than the US, Mcdonald's place of origin. For this reason, the corporation has to align with the local legislation or avoid opening branches where losses can exceed profits. More risky regions in terms of policy would be Middle Eastern or Asian countries.

If we talk about the economy as the next criterion of the external environment, the circumstances differ from country to country. As an illustration, the recently slowing economic growth in Eastern Europe is a drawback for the local Mcdonald's restaurants. On the contrary, the steady growth of the economy in Western Europe and developing countries is a good sign. Nonetheless, employees rarely use Mcdonald's to satisfy their career attitudes. Therefore, a high employee turnover rate causes losses for the company.

Mcdonald's views cultural preferences as a crucial social factor, so the chain adapts to people’s tastes in different regions. An example of such adaptation is the famous Japanese menu with lots of rice and fish. Likewise, the Indian Mcdonald's branch caters to the mostly vegetarian tastes of citizens, and so on. However, the trend for a healthy lifestyle and weight loss might threaten the company, so it needs to change its strategy.

In recent years, Mcdonald's has tried to keep up with worldwide technology trends. This strategy helps the fast food corporation to boost demand in all countries. One of the greatest high-tech implementations was the sensory screens for ordering food. This decision allowed to attract more customers who wanted more menu positions. In the pandemic period, contactless restaurant options became even more topical. Further automatization would be a winning strategy for Mcdonald's.

One of the biggest legal issues for Mcdonald's branches worldwide would be changing employment laws, especially the increase of minimum wages. In this case, changes are inevitable, so the management should think of redistributing the profits correctly. Next, it’s the company’s priority to follow the changes in laws of every country. Sometimes, governments ban certain ingredients or toys from Happy Meals.

Regarding the ecology, the management of Mcdonald's actively shows their awareness of environmental issues. Becoming more environmentally friendly is the company’s objective. For instance, Mcdonald's tries to switch to only recyclable packaging to decrease pollution. Also, the local restaurants in many regions prefer to use energy-efficient technologies. Yet, there is an even worse ecology issue, global warming. The changing weather conditions might lead to a shortage of food and disruption of supply chains.

The detailed PESTLE analysis for business helps its top managers make proper decisions on both new and usual markets. Foreseeing the dangers and opportunities is essential for a company’s success.

Coca Cola PESTLE Analysis

Managers interested in discovering new markets have to employ PESTLE analysis for business. As an illustration, Coca Cola PESTLE analysis examines political, economic, social, technological, legal, and environmental conditions. 

Like any other food or beverage company, Coca-Cola works under country legislation, specifically consumer protection laws, copyright laws, etc. Governments naturally aim to prevent any harmful products from entering the market. Luckily for Coca-Cola, most countries allow their drinks on the shelves of their shops. But, there are circumstances like sanctions, which make trade and investment impossible in certain regions. For Coca-Cola, such restricted areas are Cuba, North Korea, and Russia.

Indeed, the Coca-Cola brand is the first that comes to mind when you think of sweet beverages. This fact is hardly surprising since the company owns half the market share, leaving only fifty percent for all its competitors. Overall, the demand for this drink is steady in most countries, yet some trends can change the situation. As everybody knows, Coca-Cola drink is far from healthy. Consequently, people who shift to a more nutritious low-sugar diet might stop buying the beverage, causing lower profits.

Because Coca-Cola operates in so many countries, it has to adjust its marketing strategy to the socio-cultural aspects of every nation. But, by far, its attempts were successful and led to the popularization of the brand worldwide. One of the examples is the creation of unusual tastes in certain countries. Japanese consumers, for instance, highly appreciate the green tea taste and lemon Coke. Besides, Coca-Cola sold bottles with names, and people liked them. So, naturally, sales went up in all regions.

A beverage giant like Coca-Cola manages to draw people's attention from all age categories, but it mostly caters to the younger generation. So how does this brand attract more consumers in such a competitive market? Coca Cola uses modern technologies to its advantage. Besides working on the drink, the company heavily invests in social media marketing. The hashtags and online games aim to gain more buyers who want to be cool and trendy.

The Coca-Cola Company is famous for the secret formula of its drink. The brand has zero problems with patents or copyright, but the issues emerge from the other side. Coca-Cola is unfortunately notorious for mistreating its workers, who even protested against its unfair policy. What is more, there were even rumors about racial discrimination. So, the company has to work in this direction to clear its image.

As the biggest soft drinks producer in the world, Coca-Cola faces several accusations from eco-activists. Water shortage is the first problem that arises in places where the company places its factories. Statistically, Coca-Cola is the largest consumer of fresh water, so it drains its supplies everywhere. The issue is especially severe in countries that suffer from droughts, like India. Another problem to work on is plastic pollution due to piles of Coca-Cola bottles. Recyclable materials would be an awesome alternative.

PESTLE analysis for a business like Coca-Cola builds the most efficient strategy. Proper steps help to avoid pitfalls and secure market position.

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PESTLE Analysis for Amazon

Luckily for people who love to shop comfortably, services like Amazon exist to meet their needs. This global leader in e-commerce gains customers’ trust thanks to its smart tactical and strategic plans. The management uses PESTLE analysis for Amazon, which shows the company’s strong and weak sides:

Paving the way into multiple countries' markets means dealing with the local political environment. On the one hand, Amazon thrives in developed regions that can boast political stability. However, on the other hand, unpredictable environments like Eastern Europe or the Middle East threaten the company’s activity. Furthermore, rising foreign trade taxes may affect Amazon, like the cybersecurity failure.

Sometimes, high prices for the products, together with increasing shipping costs, scare away company clients. This issue is topical for Amazon, especially in developing countries. However, automatizing the processes can help this company save costs and set lower prices. A more influential factor for Amazon is competition with Aliexpress or Walmart. They have the potential to take over the market in Asian countries and the USA correspondingly.

Depending on the average income, Amazon sales might differ from country to country. More developed countries generally have a bigger percentage of citizens who use e-commerce. Furthermore, online shopping has become a large cultural phenomenon since the beginning of lockdowns. As a result, people got used to receiving their packages without going outside, which positively affected Amazon’s revenues. At the same time, too many company employees are losing their jobs because of automatization, which is a negative factor.

Technology and innovations are sure something that Amazon implements where it is possible. Since delivery is the company’s main service, the management attempts to make the process more efficient. Everything here revolves around creativity. Customers from developed regions can even receive groceries through drones. Another improvement is the possibility to talk to customer service through live chats or e-mails. Overall, Amazon constantly invests in its R&D department.

Legal matters are one of the most complicated, as every country has different requirements for foreign business activity. Amazon strictly follows consumer and employment laws to avoid tarnishing its reputation and bearing losses. Still, there are controversial situations where this business has to change its strategy. First, the counterfeit accusations can obstruct Amazon’s activity. Selling fake goods is legally punishable in most countries. Also, governments might suspect that Amazon collects consumer data underhandedly.

The examination of Amazon’s ecological strategy proves that this business cares about its effect on the environment. Even though e-commerce produces fewer emissions than shopping in brick-and-mortar shops, the change is still necessary. To become more environmentally friendly, Amazon encourages its clients to choose longer delivery options since quick shipment is bad for the ecology. Such initiatives improve the brand image and strengthen customer loyalty.

Altogether Amazons PESTLE analysis digs out the needed information about the company's activity. The final objective is to assess the effect of the environment on this brand and to find the best solutions for arising issues.

How do PESTLE Factors Affect a Business

Indeed, the lack of market research usually backfires with the sudden obstacles in the company’s way. Our papers writing service recommends using PESTLE analysis for businesses to make efficient decisions. Originally, every PESTLE analysis template contained several factors influencing companies worldwide. Like so, political circumstances might encourage or prohibit a firm from working in a country by enforcing the law, which is another category.

Next, economic strength impacts the demand for products and prices for raw materials. On top of that, socio-cultural specifics determine whether the s and services can be popular. Another subject of analysis is the level of technology, which should be enough for an innovative enterprise. Finally, the state of local ecology affects foreign business too. The company must be responsible for any potential harm to nature.

SWOT and PESTLE: Difference

You could have heard of two equally popular abbreviations, SWOT and PESTLE. In a nutshell, both of them relate to business and marketing. At first, these frameworks might seem a bit similar, but they do differ. For instance, if you look at the PESTLE analysis definition, you can see that it covers only the macro environment where a business operates. At the same time, SWOT examines internal factors like strengths and weaknesses and external determinants like opportunities and threats.

How does our research paper writing services compare the two methods? The thing is, both of them are essential. It is worth mentioning that SWOT analysis suits new brands and products more, while PESTLE analysis works better for expanding businesses.

Why Is PEST Analysis Useful for Business

Granted that company owners think of expansion, they have to consider everything. In such situations, PESTLE analysis for business is an awesome way to study unknown markets. The framework covers every detail that can potentially boost or disrupt business activity. On the contrary, superficial analysis is ineffective as it often misses economic, cultural, or legal specifics. Moreover, changes can happen overnight, so PESTLE analysis should be recurring.

A key goal of the market examination is minimizing dangers for a company. Analyzing the current situation in a country, along with its previous experiences, gives a hint of future events. However, certain circumstances, like natural disasters or international conflicts, are impossible to predict. That is why management should have a backup plan just in case.

In conclusion, any PESTLE analysis template gives companies recommendations regarding their foreign strategy. Furthermore, the study is thorough, so you can find an essay to buy at our service that always finishes work on time. Finally, preparation gives a clear view of the best direction for a company in a world of endless possibilities.

Read also AP Lang argument essay example from our writers. This information will be useful to you for your essay writing.

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