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PESTEL and the Business Environment

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About This Drill

PESTEL and the Business Environment is a practice drill. It contains 5 original questions created by Brian Stewart, a Barron's test prep author with over 20 years of tutoring experience.

A boutique fitness business classifies six recent external changes using the PESTEL framework; uses an invented company and original factors.

Passage

Brindleford Fitness runs two boutique workout studios. Before its annual planning meeting, the owner lists six recent changes in the world around the business and wants to sort them using the PESTEL framework (Political, Economic, Social, Technological, Environmental, Legal).

External changes Brindleford is tracking

#External change
1Interest rates rise, making the studio's loan payments more expensive
2A new city ordinance requires all gyms to post calorie information on cafe menus
3A popular fitness-tracking app lets members book classes from their phones
4More local adults adopt a health-conscious lifestyle and seek group classes
5A prolonged drought makes water conservation a major operating concern for businesses with showers
6The city council debates a tax on sugary drinks sold at fitness cafes

Questions in This Drill

  1. Reading the list, which numbered change is a Technological factor?
  2. In the PESTEL framework, what do the two letters 'E' stand for?
  3. How many of the six changes are best classified as either Political or Legal factors?
  4. Change 5 is the drought-driven water-conservation concern. Why is this best classified as an Environmental factor rather than an Economic one?
  5. The owner wants to know which single change will most directly raise the studio's near-term costs. Which change is that, and why?