PESTEL ANALYSIS
PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. It is a part of the external analysis when conducting a strategic analysis or doing market research, and gives an overview of the different macro environmental factors that the company has to take into consideration
POLITICAL FORCES:
Italy has a parliamentary system, like many other European countries. But as usual, Italy has a remarkable complex political environment. There are more than 20 parties. As a result, no party has chance of gaining power alone. So, every single government depends on a sophisticated arrangement of coalitions.
During last April it was elected the new Italian government. It is the 62nd government since 1946. Thus the country had an average of one new government per year. No chance! It is impossible to set-up and pursuit long terms goals within this ever changing context.
Another dangerous element is again present in Italian politics: right-wing populism. you can blame immigrants for every single Italian problem.
Economy :
Italy has a diversified industrial economy, which is divided into a developed industrial north, dominated by private companies, and a less-developed, welfare-dependent, agricultural south, with high unemployment. The Italian economy is driven in large part by the manufacture of high-quality consumer goods produced by small and medium-sized enterprises, many of them family owned. Italy also has a sizable underground economy, which by some estimates accounts for as much as 15% of GDP.

Italy has few natural resources. With much land unsuited for farming, Italy is a net food importer. Most raw materials needed for manufacturing and more than 80% of the country's energy sources are imported. Italy's economic strength is in the processing and the manufacturing of goods, primarily in small and medium-sized family-owned firms. Its major industries are precision machinery, motor vehicles, chemicals, pharmaceuticals, electric goods, and fashion and clothing.
It has very low GDP rate of 1.3%.