SWOT or PESTLE Analysis | Which is Useful for Business


by Shamsul
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SWOT or PESTLE Analysis | Which is Useful for Business


A SWOT or PESTLE analysis is useful for both new startups and established businesses to know in which direction your business is going or will go. They are also helpful in knowing whether your business plan is feasible or not. A SWOT or PESTLE analysis can also help you make suitable decisions for your business and identify your goal’s advantages and disadvantages. Both analyses can be applied to both small and big businesses or projects to uncover the potential failure or success areas. Is it essential to conduct a SWOT or PESTLE analysis? Honestly speaking, it depends on your business and business operations type.

This article will cover some essential factors about a SWOT or PESTLE analysis and how they can be helpful for your business and ambition.


What is the Difference Between a SWOT or PESTLE Analysis?

A SWOT analysis mainly focuses on your business environment’s internal actions or operations. A PESTLE analysis mainly focuses on the external processes of your business environment. You can manage your strengths, weaknesses, opportunities, and threats through SWOT analysis, while PESTLE political, economic, social, technological, legal, and environmental factors are outside your authority.


What is a SWOT Analysis?

A SWOT analysis mainly highlights four important factors,

  1. Strengths – What are your business strengths or what do you have better than your competitors?
  2. Weaknesses – What are your weaknesses or where do you have to make improvements?
  3. Opportunities – What are your strengths or what factors you can exploit to enhance your business?
  4. Weaknesses – What are your weaknesses or what factors could hurt your business?

Strengths – SWOT Analysis

  1. What are the important factors that your business is doing better than others?
  2. What are the business advantages do you have over your competitors?
  3. What unique resources do you have over others?
  4. What characteristics or features separate you from businesses?
  5. What is your USP (Unique Selling Point)?
  6. Do you have innovative technology, investment, intellectual property, or capital?
  7. What major factors make you the right man for your business?

Weaknesses – SWOT Analysis

  1. What areas are your weaker points or does your business need improvement?
  2. Are your rival companies or business better than you at different things?
  3. What potential resources do you need?
  4. What are the factors that you should avoid?
  5. What products or services would make you a loser?
  6. Are you fulfilling the needs of your target audience?

Opportunities – SWOT Analysis

  1. What markets can give your business a much-needed boost?
  2. How huge is your total addressable market (TAM)?
  3. What are the newest market trends you should exploit to leverage your business?
  4. What technologies can give your company an upper hand over others?
  5. Who are your major competitors?
  6. Does your business need a special boost?

Threats – SWOT Analysis

  1. Find out the emerging companies that can hurt your business.
  2. Does your competitor have the potential to penetrate the same market you are operating in?
  3. Find out the negative social trends that can impact your business.
  4. What hurdles can you face?
  5. What is your current financial condition?
  6. Could your weaknesses turn into a big threat?

Key Takeaways – SWOT Analysis

A SWOT is one of the most useful processes that help to identify your business strengths, weaknesses, opportunities, and threats. It is a simple method to analyze the internal business factors. By utilizing SWOT, you can build effective strategies for your business that will help you enhance your strengths, reduce weaknesses, increase your opportunities, and terminate your threats.


What is PESTLE analysis?

A PESTLE analysis mainly highlights six factors that are outside of your business.

  1. Political – How can/will the present political condition of your country impact your company? Will a specific political party in your country impact your business growth?
  2. Economic – Will financial problems and economic condition of your country or the country in which you are operating affect your company or business?
  3. Social – What social trends, cultures, demographics, lifestyles, or opinions could hurt your business growth?
  4. Technological – Could the latest technology disrupt your whole business operations? Could your current technological infrastructure work for you?
  5. Legal – Could new laws, policies, rules, or regulations affect your work?
  6. Environmental – Could environmental issues like pollution, waste management, and climate change impact your manufacturing ability?

Political – PESTLE Analysis

  1. Which strategies of government assistance or impede your business?
  2. What initiatives, grants, or tax refunds that you could take advantage of?
  3. Is political instability a big threat for your business?
  4. Will the international trade policy favorable for you?
  5. What will be the impact of current tax legislation on your business?
  6. Are climate laws posed any threat for your business?

Economic – PESTLE Analysis

  1. Is the current financial situation a big concern for you?
  2. What is the exchange rate or how it could impact you?
  3. Will interest rates impact your economic status?
  4. What is disposable income? How it could affect you and your target audience?
  5. Can your loyal customers have enough money to buy your products?
  6. How change in tax rules can hurt your performance?

Social – PESTLE Analysis

  1. What is your target audience or what demographic are you directing?
  2. What is the population growth rate in the country?
  3. What are the latest social trends people are following?
  4. What is the purchasing power of your target customers?
  5. What message do you want to convey to your audience?
  6. What are the similar businesses and competitors affecting your growth?

Technological – PESTLE Analysis

  1. What kind of IT infrastructure do you require to finish the project?
  2. Do the latest innovations in internet connectivity hinder or benefit you?
  3. Will automation or artificial intelligence impact your business?
  4. What type of security infrastructure do you want to protect your processes or IP?
  5. Is it possible to counterfeit your products or technology?

Legal – PESTLE Analysis

  1. Does the legal framework of your country similar to the other countries?
  2. What are the safety standards you have to follow?
  3. Is it possible to patent your product?
  4. Could you protect your unique selling proposition by copyrighting your product, logo, or brand?
  5. What labor laws can impact your operations?
  6. Is it essential to follow safety and health laws?

Environmental – PESTLE Analysis

  1. What is your company’s carbon emission rate?
  2. Can manufacturing be finished proficiently?
  3. How can climate change affect your business?
  4. Should you promote sustainability and positive business ethics?
  5. Can you counterbalance your carbon footprint?
  6. How can you reduce emission rate by increasing sustainability?
  7. Will the shortage of raw materials affect your business?

Key Takeaways – PESTLE Analysis

A PESTLE analysis helps to analyze or identify the external business environment. It is a great method to enhance your competency by evaluating all the factors. In short, a company can take a competitive advantage over others by conducting this analysis.


Final Thoughts:

Both SWOT and PESTLE analysis are somehow interlinked. If you are conducting a SWOT analysis, you should pay attention to the PESTLE. Opportunities and threats are external factors in a SWOT analysis, and PESTLE helps identify external business factors. But, both methods help build a solid strategy. It is a useful strategic tool for marketing, businesses or sales.

Conduct a SWOT or PESTLE analysis to understand the market dynamics, demographic trends, and your competitors. In short, you can have complete insight into the market and customers. It is important to be meticulous and realistic when conducting a SWOT or PESTLE analysis.


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