ANSWER

PESTLE analysis extends the original PEST analysis, by analyzing the Legal and Environmental factors that may influence a business.

Legal Environment: refers to laws that are set up to protect individuals.  This may be based on any number of protected classes such as race, religion, gender, age, etc.  It also applies to laws beyond protected classes such as minimum wage laws.  Some confuse the analysis of the legal environment with the political environment since both tend to be based on passed legislation.  But the legal environment specifically focuses on things that impact the people that are employed by the business, not the business as a whole.  You can think of political environment as the laws that govern the macro environment, while the legal environment is those things that affect the business at a much smaller level.

Environmental Factors:  refer to changes in weather, climate, air and water pollution, wildlife conservation etc.  Changes in weather can have a strong impact on many industries including the agricultural industry (drought), gas and oil (hurricanes), commercial fishing (wildlife conservation), and many more.  With greater environmental awareness the environmental factors continue to have broader reaching impacts across industries. However, not all environmental factors create a negative impact.  The greater environmental awareness has also produced opportunities in some industries such as travel and transportation (electric and hybrid cars).

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Chris Adams
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