In celebration of World PR Day 2025, EloQ Communications is pleased to reshare this article as a way to promote a spirit of learning and passion for the profession, particularly from the next generation, where fresh perspectives meet real-world experiences in a practice-oriented academic environment. The following piece presents a student’s perspective from the class of Dr. Clāra Ly-Le, Managing Director of EloQ Communications and university lecturer.

In the realm of communications where everything begins with a story and ends with public sentiment, understanding the macro context is no longer a competitive advantage but a prerequisite. The PESTEL framework serves as a strategic compass that enables communicators to deliver the right message, at the right time, to the right audience. This article will take you on a journey to explore the six key elements of this framework and demonstrate their application to the Vinamilk brand.

Note: The content of this article is academic in nature and represents a hypothetical analysis based on the PESTEL model combined with data from secondary sources. All interpretations reflect the author’s personal viewpoint and do not represent the official stance of the brand.

What is the PESTEL Model?

Definition

PESTEL is a strategic analysis model widely used to assess external factors that influence the operations of an organization or business. With its comprehensive analytical capacity, PESTEL helps leaders identify and understand potential impacts from the external environment, thereby supporting effective strategic planning and risk management.

The term “PESTEL” derives from six key external factors: Political, Economic, Social, Technological, Environmental, and Legal.

Origin

In 1967, Professor Francis Aguilar of Harvard University introduced the ETPS model (Economic, Technical, Political, and Social) in his book Scanning the Business Environment. Over time, this model was refined and expanded, forming the foundation of today’s PESTEL model.

Significance for Businesses

The PESTEL framework plays an essential role in strategic planning and comprehensive business management:

• Business planning aligned with market dynamics: In a volatile and competitive marketplace, PESTEL helps businesses identify and adapt to environmental shifts, informing both short- and long-term strategies.
• Identifying opportunities and threats: It offers a top-down view of external influences, such as inflation, natural disasters, or pandemics, allowing businesses to seize opportunities or mitigate risks.
• Product and service development: By providing broad contextual insights, PESTEL helps businesses assess competitive capabilities and develop offerings that align with evolving customer needs.
• Marketing optimization: Market and customer analysis enables more effective marketing strategies, from goal setting and message development to media channel selection.

The Six Components of the PESTEL Framework

6 components of the PESTEL model

Source: BASE.VN

Political Factors

These include government policies and international regulations, such as:

• The nation’s political system and governance structure
• Investment and business support policies, such as tax reductions, interest rate incentives, or R&D funding
• Trade relations and agreements between countries
• Environmental protection and resource conservation regulations
• Political stability, including election cycles or geopolitical conflicts

Economic Factors

These refer to macroeconomic conditions that influence business activities:

• Economic growth rate, exchange rates, fiscal and real estate policies
• Shifts in consumer purchasing behavior
• Supply chain disruptions, such as unstable sourcing or spikes in raw material prices

Social Factors

These encompass cultural, societal, and demographic aspects that impact consumer behavior:

• Changes in tastes, preferences, and consumption trends
• Demographic variables: age, gender, education level, income, etc.
• Local or regional religious and cultural practices

Technological Factors

These refer to scientific and technological advancements affecting business strategy:

• Innovations like AI, IoT, or VR that inspire new product development and enhance customer experience
• High-tech equipment, such as renewable energy tools, that boost productivity and reduce costs
• Competitive technologies adopted by industry peers requiring strategic responses

Environmental Factors

These involve ecological and sustainability considerations:

• Climate change affecting production capacity and supply chains
• Efficient resource and energy use that reduces operational costs and environmental impact
• Regulatory compliance related to emissions, waste, noise, and radiation

Legal Factors
These pertain to the legal environment that governs business operations:

• Consumer protection laws and food safety standards
• Labor regulations ensuring workplace safety and employee rights
• Intellectual property and patent protections
• Competition laws regulating fair business practices

Analytical Process Using the PESTEL Framework

Source: BASE.VN

Step 1: Identify and assess the PESTEL factors

Start by determining the six external factors that influence the business sector or operational domain.

Step 2: Collect and consolidate data

Gather information from sources such as internal reports, news outlets, market research, and credible online data. Objectivity and transparency are essential for a holistic and accurate market landscape.

Step 3: Analyze the impact of each factor 

Evaluate how each factor affects business performance:

• Determine the significance and level of influence each has on operations
• Identify whether each presents an opportunity or risk
• Consider the interdependencies among factors

Step 4: Report the findings

Develop a comprehensive report that includes visuals and data. The findings guide strategic decision-making tailored to the business environment shaped by PESTEL factors.

Case Study: Applying PESTEL to Vinamilk

Let’s apply the PESTEL model to analyze the Vinamilk brand from a hypothetical perspective.

Source: Vinamilk

Political Factors

Vietnam’s political stability plays a critical role in economic growth, employment generation, rising incomes, and consumer demand, favorable conditions for long-term business development.

As one of Vietnam’s largest companies, Vinamilk is expanding into foreign markets such as India, the United States, and Russia. Therefore, the brand is subject to both domestic and international political and legal systems.

For instance, more than 90% of Vinamilk’s export revenue comes from Iraq, where political instability has impacted the brand’s export potential. As a result, the company has diversified into markets like Canada, the US, Thailand, and Australia.

Vietnam’s mixed economy has led to relaxed trade barriers and more investor-friendly policies. The government supports the dairy industry with tax incentives. For example, most dairy and medical products are subject to only 8% VAT.

Economic Factors

Vietnam’s GDP growth is projected to reach 7% annually between 2021 and 2025, with 2024 achieving 7.09%. GDP per capita hit $4,700 in 2024, signaling the country’s movement into the upper-middle-income bracket.

Core inflation in 2024 rose by 2.71%, lower than the general CPI increase of 3.63%. This favorable economic outlook gives Vinamilk confidence to diversify its product range, though it must adopt adaptive pricing and marketing strategies to manage volatility.

Social Factors

As of April 2024, Vietnam’s population reached 101 million, with 61.8% residing in rural areas. This demographic supports the development of the domestic dairy industry, especially in urban areas where consumption is projected to grow by up to 30% annually.

Consumers are increasingly concerned with nutritional value, favoring fresh milk, yogurt, organic products, preservative-free, sugar-free, and lactose-free alternatives. There is also demand for plant-based milk and unique flavors.

Despite growing interest, per capita dairy consumption in Vietnam remains below global averages. Malnutrition and micronutrient deficiencies are still common.

Consumers’ easy access to online information fuels demand for healthier, more tailored products. Vinamilk has leveraged this by launching emotionally driven advertising and new product lines aligned with current needs. Vietnamese consumers tend to be loyal to brands they trust, making consistent quality and strong brand reputation vital for customer retention.

Technological Factors

As a key production input, technology presents both opportunities and challenges that influence marketing strategy. Vinamilk’s production systems meet international standards, incorporating advanced packaging and dairy farming technologies from global suppliers such as Tetra Pak (Sweden) and APV (Denmark).

Automation technologies like RFID tagging, biological sensors, camera systems, and wireless networks enhance farm productivity. Other innovations include:

• UHT sterilization for bacterial control
• High-tech packaging diversification equipment
• ISO-certified quality management systems
• Lely Juno robotic feeders that play music to calm cattle

Environmental Factors

Vietnam’s tropical monsoon climate is suboptimal for dairy cows, which produce best between 5°C and 21°C. Nonetheless, areas like Tuyên Quang, Lâm Đồng, Ba Vì, Nghệ An, and Sơn La are suitable for dairy farming.

Natural disasters like floods remain a challenge. On the upside, local sourcing of fresh materials like yogurt and sugar reduces costs compared to imports.

Environmental factors influencing Vinamilk’s marketing include raw material scarcity, rising energy costs, pollution, and state regulations promoting sustainability and responsible resource use. Since dairy products are perishable, strict handling and preservation standards are necessary.

Legal Factors

Vinamilk complies with food safety regulations and prioritizes health and product quality through advanced systems. International certifications and modern supply chains strengthen the brand’s competitive edge.

However, small-scale distributors often lack adequate technology to preserve and transport dairy products, which may impact product quality and, by extension, the brand’s reputation. Additionally, inconsistent tax structures pose pricing strategy challenges.

Conclusion

In a complex and ever-changing market, analyzing macro factors through the PESTEL framework is essential for building resilient and adaptive communication strategies. This perspective pushes communicators to think holistically—from politics, law, and economics to society, technology, and the environment—each element represents a subtle but powerful force that can reshape a brand’s trajectory.

By applying the PESTEL model to Vinamilk, we see how it enables brands to identify macro-environmental forces that influence their operations and to develop sustainable strategies in response. Assessing these six pillars allows businesses to stay agile, capture consumer trends, embrace innovation, and enhance their social responsibility.

PESTEL acts as a “macroscopic lens” that allows communicators to anticipate the market instead of merely reacting to it. It empowers brands to empathize with the public, adapt to context, and most importantly deliver meaningful, long-lasting value.

Among the six PESTEL factors, which do you think is most critical when crafting communication strategies for Gen Z, an audience highly influenced by technology, environmental consciousness, and social trends?

References:

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Source: Brands Vietnam