What analysis reviews external factors such as political, economic, social, technological, legal, and environmental impacts on a business?

Prepare for the Edexcel AS/A‑Level Business Theme 3 Exam. Engage with multiple choice questions and detailed explanations. Enhance your understanding and get exam ready with our comprehensive resources!

The correct answer is PESTLE analysis because it specifically focuses on evaluating and understanding external factors that can influence a business's environment and operations. The acronym PESTLE stands for Political, Economic, Social, Technological, Legal, and Environmental factors. This framework helps businesses identify opportunities and threats in their external environment, enabling strategic planning and informed decision-making.

In contrast, SWOT analysis is more about assessing a company’s internal strengths and weaknesses alongside its external opportunities and threats, but it does not provide a structured approach to analyzing external influences in detail. Market research analysis usually concentrates on understanding the target market, customer preferences, and competition rather than broader external factors. Business impact analysis primarily looks at how internal changes or events could affect business operations, focusing more on internal risk management rather than external influences. Thus, PESTLE analysis is the most suitable answer for the question regarding the review of external factors impacting a business.

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