How to Efficiently Conduct a PESTLE & SWOT Analysis

Business Tools - PESTLE & SWOT

by Shamsul
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How to Efficiently Conduct a PESTLE & SWOT Analysis

All You Need to Know for conducting a successful PESTLE & SWOT Analysis

Suppose you are looking for effective methods or tools that will aid in analyzing the development process of any business’s strategic plan. In that case, PESTLE & SWOT are the most effective analytical tools. Although both are effective when used in isolation, their combined use only multiplies the significance of outcomes.


Pestle analysis for any business considers the business context on the broad environmental spectrum and the variation taking place in this context.

If these two (PESTLE & SWOT) are conducted as a combination, then PESTLE analysis takes place first. Then its results or findings are used as a context needed for SWOT analysis, and a thorough analysis is done as a product.


SWOT analysis works on finding a specific tool and then uses the data to conclude the weaknesses and strengths of any business. It is also super valuable for realizing the threats and opportunities.

So first of all, let’s understand PESTLE analysis and then SWOT analysis


PESTLE Analysis:

You can easily understand it as an external scan or an audit run for any organization to plan its future strategic plans and determine how healthy current projects are performing. This kind of scan is done on the environmental influences of any understudy organization. Usually, the extensive spectrum is considered for any significant factor related to that business not to be left out.

By auditing the current business environment and evaluating the potential changes due to this environment, any business can make itself more ready to respond to any upcoming threats effectively than its competitors. Such analysis is also helpful in estimating the effects of such factors or events that are truly out of the control of any business.

The illustration below shows that how PESTLE factors can influence any business or organization and demonstrate how it operates.


Any organization needs to follow specific political, economic, social, technological, legal, environmental, and legal factors, while these all can strongly affect the organization’s business in their own way. Below the impact of all of these factors on any business plan is separately discussed.


This is a factor that determines how much and how a business will be influenced by the economic changes due to any government action. Such changes can be on local, state, or federal levels.

If we discuss any sudden change due to government’s legislation or regulation that can affect the business then here are few examples; imbalance distribution of power, sudden change in government, change in tax laws, change in trade restrictions, new labor laws, and change in retirement policies to name a few.


A factor based on the direct influence of any certain area on its economy is called the economic factor. Such factors usually work within a specific area and influence the business rate, interest rate, inflation rate, exchange and growth rate, property prices, and economic growth.

Such factors count as local economic factors as these are important in a specified geographical area and these tend to differ from one place to another so the analysis should be done in that certain area as such factors might be for small area but hold a strong position in determining the success of any business.


Different demographical factors like cultural aspects, population increase rate, age distribution among the population, and the variations in the social behaviors of the persons also matter and consider it under the title of social factors. Its simple example can be understood as the social discussion between different parties about any certain product done on social media applications or an event. In the recent era, such factors weigh high in measuring the client-business interaction method’s effectiveness.


Different kinds of development, research, and technological changes and their rates influence any business’s efficiency, quality, and outsourcing decisions. For example, think about the impact of smartphones, skype or zoom meetings, AI (Artificial Intelligence) emergence, area-based researches, the study of incentives, and automation. In the last decade, technological changes have affected business growth more than any other factor and it will continue to do so at a higher rate.


It includes any direct or indirect law that can affect any activity of any small or large business understudy. It can be any consumer law, WHS, discrimination law, or the law of privacy, to count a few.


Such factors directly relate to the business and help to estimate by taking the environment or surrounding into account. Such factors can cause huge changes like disasters (natural or weather), climate changes, sustainability, and geographical positions, etc. For a simple understanding, suppose the frequency of an earthquake or the rain intensity and imagine its impact on future business plans.

How does PESTLE analysis help in Change Management? ( PESTLE & SWOT)


Listing of all the External PESTLE Factors:

For listing all such factors, you need to brainstorm, and you might consider hiring or seeking help from an expert of business knowledge in this matter. The expert should be well aware of the business and the world outside it.

Step 2:

Determine the Inferences of all such Factors on the Business Plan:

Find if each external factor affects the business; which one involves more? So rate them or rank them in some order. Usually, such a kind of study is done on their time impacts like if the impact long-term or short-term impact? There are many other things to keep in mind, like if the effect is positive or negative and the dynamics of the impact will remain the same, or it will change (increase or decrease) with time.

Step 3:

Rate the Likelihood and the Impact:

Now rank how much a potential factor will impact any business, will it be low or high? What are the chances of it happening? High or low?

Step 4:

Next Action:

A further step is taking action on this analysis, and for this purpose, you can either use scenario building or use SWOT analysis. In scenario building, you can determine the outcomes by considering the “if” situation. This method helps find how a particular case will affect your business and the different alternatives. Whereas both these methods give you access to a combination of high impacting factors to their own extend.


SWOT Analysis:

Apply SWOT analysis to deduce the results of PESTLE analysis to get a better knowledge of strengths, weakness, opportunities, and threats to any business. A SWOT analysis is crucial and you should do it before finalizing your business plan. This critically sums up the risk management process, and you can further understand it by understanding the strength and weakness analysis of any business. These two assessments are internal assessments as these are of internal focus while the threats and opportunities are totally external factors, and such assessments are classified as external assessments. In this type of assessment, such factors matter which is outside the control of your business.

Below we have given some Questions which will help you to Analyze and Process your Business Plan.


What are the advantages of your business?

What your customers or contractors can name as your strength?

Which are the plus point of your business over its competitors?

What are your low-cost or unique resources which your opponents lack?

Which factors can be your success determining factors?

What is your USP (Unique Selling Proposition)?


What do you need to improve?

What do you need to avoid?

Which of your customers or contractors can name as your weakness?

Which factors can create problems and you lose your business?


Which you can spot significant opportunities?

Which of the exciting trends are in your knowledge?

Useful opportunities can be created from:

You have the knowledge of the market and technology, thus changing that knowledge in your favor on a broad or short scale possible.

Having the knowledge of changing patterns of government policies related to your business.

Arranging the events on a local scale.

Change population profiles, the lifestyle of users, social patterns, and so on.


What issues are hindering you?

What are your competitors doing?

Is there any change in compliance requirements, job specifications, services, or products?

Is there any threat to your business due to technological change?

Such combined analysis will help your business to grow better.

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Read More:

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PESTLE Analysis of Nike | Nike PESTLE

SWOT Analysis of Lego 2021 | The Toy Company

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