AEIOU and PESTEL Analysis
Hello, friend.
When conducting research in any field, it can be useful to have a specific framework in mind before starting. Frameworks are generalized observation tools. They help the researcher to give attention to key details and address the objectives of the project/product/problem.
The topic of this article will be AEIOU, PESTEL analysis frameworks. Although professionals use these frameworks in the business world to make detailed and accurate observations, individuals also can try them to get a creative, curious mindset and make a decision.
First and foremost, let’s understand what is an analysis? The analysis is the process of observation, collecting qualitative/quantitative data, and coming to a conclusion with the help of those data.
AEIOU
Origin: The AEIOU framework was originated in 1991 at Doblin by Rick Robinson, Ilya Prokopoff, John Cain, and Julie Pokorny. The purpose was to help understand Ethnomethodology data and Conversation analysis with MECE categories.
AEIOU is a qualitative research method, and it rapidly turns initial notes into categories that can inform research analysis to develop key insights and other findings.
It has two main functions:
- to code data
- to develop building blocks of models.
5 elements of AEIOU to be coded:
Activities:
Actions taking to accomplish a goal — What are the people doing? What is their task? What are the modes people work in, and the specific activities and processes they go through?
Environment:
Places where activities happen — Where do people spend their time? How does their environment look like? How does an environment make people feel?
Interactions:
Interactions are between a person and someone else or something. Interactions are the building blocks of activities. How do they interact with their environment? What are the connections?
Objects:
Objects are building blocks of the environment, key elements sometimes. Who uses which device or object? Which devices and objects are being used? In which environment are the objects and devices being used?
Users:
Users are the people whose behaviors, preferences, and needs are being researched. Who they are? What are the user’s characteristics and values? What’s their role and relationships?
The Process of AEIOU
- Gather materials (photos, notes, videos, interviews, etc) via ethnographic methods
- During fieldwork, use the AEIOU framework to “observe” the environment
- Record observations under appropriate headings
- Review and cluster observations to reveal higher-level themes and patterns.
Pros: Nice for collecting observations and small details; it creates a visual map of activities; can help in uncovering hidden needs, bypasses, behaviors.
Cons: Not appropriate for collecting macro-level social, political, or cultural actions; changes aren’t included over time; focuses on only users.
PESTEL(PESTLE)
PESTEL or PESTLE analysis is a framework used as a tool to explore the main external forces in environments that might affect an organization or individual. These forces can create both opportunities and threats.
Let’s define types of environments.
Internal Environment: The staff, technology, salaries, and finance, etc of the organization.
Micro Environment: The external customers, agents, distributors, suppliers, competitors of the business.
Macro Environment: The macro-environment includes Political, Economic, Social, Technological, Environmental, and Legal factors. These factors are known as PESTEL elements.
The purpose of PESTEL analysis
PESTEL analysis categorizes the environmental factors into six parts. It analyses the impact of each of the factors on the business. A result came out after the analysis. A business uses this result to take advantage of the opportunities and a business also uses the results to make important decisions for threats while preparing for the business and strategic plans. (Byars, 1991; Cooper, 2000).
6 key elements:
POLITICAL:
These factors determine measurements that a government may influence a certain industry:
Government policy, political stability or instability, bureaucracy, corruption, foreign trade policy, tax policy, trade restrictions, labor/environmental/copyright/consumer protection laws, competition regulation, funding grants & initiatives, etc.
ECONOMIC:
Specific economic factors that might affect your work:
Economic trends, growth rates, industry growth, seasonal factors, taxation, inflation, interest rates, international exchange rates, international trade, labor costs, consumer disposable income, unemployment rates, availability of credit, monetary policies, raw material costs, etc.
SOCIAL:
Social aspects, attitudes, and trends:
Health, work, leisure, money, customer service, imports, religion, cultural taboos, the environment; population growth and demographics, family size/structure, immigration/emigration, lifestyle trends, etc.
TECHNOLOGICAL:
A technology that might affect the way you make, distribute, and communicate with products and services, the impact of technology on how people live and work(as an example of remote working):
Technology and communications infrastructure, consumer access to technology, emerging technologies, automation, legislation around technology, research and development, intellectual property regulation, competitor technology and innovation, technology incentives, etc.
ENVIRONMENTAL:
Environmental forces impacting business’s/individual’s geographical location, the surrounding environment, and natural resources:
Weather, climate change, your carbon footprint, environmental regulations, pollution laws and targets, recycling and waste management policies, endangered species, support for renewable energy, etc.
LEGAL:
Current and future legal and regulatory requirements:
Laws regarding consumer protection, labor, health & safety, antitrust, intellectual property, data protection, tax and discrimination; international and domestic trade regulations/restrictions, advertising standards, product labeling, and safety standards, etc.
Pros:
It encourages the development of external and strategic thinking. can enable an organization to anticipate future business threats and take action to avoid or minimize their impact.
Cons:
- The risk of getting too much data may cause ‘paralysis by analysis’.
- To be effective, the process needs to be repeated regularly.
Different forms of PEST
STEP = PEST in a more positive approach.
PESTEL = PEST + Environmental + Legal
PESTELI = PESTEL + Industry analysis
STEEP = PEST + Ethical
SLEPT = PEST + Legal
STEEPLE = PEST + Environmental + Legal + Ethical
STEEPLED = STEEPLE + Demographic
PESTLIED = PEST + Legal + International + Environmental + Demographic
LONGPEST = Local + National + Global factors + PEST
References:
EthnoHub Help. AEIOU Framework.
02.06.2021
