Its very imperative to constantly asses the business environment so as to keep up with competition, be updated on current developments in the industry as well as understanding the external and internal factors that affect the business (Greacen & Chou 2005). Business environment is identified as the external factors influencing the decisions made by a business and they way the business will operate there after. These factors are very critical to development of an industry and any business analyses set to investigated them should be done so in a systematic way so as to ensure the whole process in cost effective and that relevant information is obtained (Leumar 2008). One is able to concentrate on the industry’s environmental factors like the customers, competitors, the government, and suppliers. In general, it’s pertinent to note that the profit that a firm gets comes from the ways in which a market is made to be perfect. The prices that clients are willing to pay for the goods should not actually surpass the cost of producing the goods (Leumar 2008). PESTEL analysis is one of such means by which companies use to assess their performance in relation to the business environment so that changes can be made whenever possible to increase profitability (Capon 2006).
The PESTEL analysis is sometimes extended to include local national and global aspects and hence denoted as LoNGPESTEL analysis. These are some of the factors that are analysed in assessing the business environment particularly the macro environment factors that are likely to affect management’s decisions about the organisation. PESTEL is an acronym of Political, Economic, Social, Technological, Environmental and Legal factors that influence organizations decision process (Greacen & Chou 2005). The changes in taxation policy, introduction of trade barriers, establishment