Why You Should Use PESTLE and SWOT Analysis

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You may wonder, what’s the deal with PESTLE analysis? And Should you bother with a SWOT analysis? The short answer: Yes.

You should use PESTLE and SWOT analysis. It’s not fit for every situation, but if you’re a student, marketer, business owner, analyst, researcher, or anyone who wants to know more about a specific topic, these two analyses fit the bill.

SWOT analysis identifies the strengths, weaknesses, opportunities, and threats of a topic. These influences are internal.

PESTLE analysis discusses the influence of political, economic, social, technological, legal, and environmental impacts of a topic. These influences are external.

And both can help you in four specific ways.

1. SWOT and PESTLE analysis helps you prep & plan effectively

PESTLE analysis and SWOT analysis are tools for preparation and planning. How you can use this information depends on your needs.

For instance, digital marketers need to sell products and services. They’ll benefit when using PESTLE analysis before a new campaign. Since PESTLE is about the six macro-environmental influences affecting businesses, products, and locations, it gives marketers much-needed insight about policies, economics, technologies, and so forth.

It also shows limitations, regulations, and attitudes regarding a product or service. For example, supplements — like vitamins — must abide by strict regulations. Health providers manage what they’re allowed and not allowed to say about supplements, or they’ll face legal ramifications. One wrong word and the whole company could be shut down.

But if a marketer uses PESTLE analysis first, they’ll discover political and legal limitations of supplements. Knowing this allows them to create effective campaigns.

This is the same idea of preparation and planning for SWOT analysis. By understanding a product or services’ strengths, weaknesses, opportunities, and threats, it’s much easier for the marketer to sell it.

Once identified, they can work on or bury weaknesses while bringing strengths to the forefront of consumers’ minds. They can also prep for future opportunities and potential threats.

SWOT analysis and PESTLE analysis applies to students, business analysts, researchers, and just about anyone who just wants more information about a topic.

Read: How to Research and Write a SWOT Analysis

2. Achieve your goals easier with PESTLE and SWOT analysis

It’s easier to set and meet goals with PESTLE analysis and SWOT analysis. Both help you create sustainable, actionable goals. They’re best used for personal goals, academic goals, and business goals.

Everyone benefits by having a clear direction and accountability for their goals. When creating goals, write them down first. Think about the disadvantages you’ve had(weaknesses). Then brainstorm other means to reach this goal (opportunities). And finally, identify what’s preventing you from reaching this goal (threats).

Once you’re done, read through your SWOT information. Think. Reflect. And create a plan to reach these goals where you can limit weaknesses, capitalize on opportunities, and avoid threats.

PESTLE analysis also helps with goals, but differently. While SWOT analysis helps you look at your goals internally, PESTLE is the opposite; it forces you to focus on the external factors you can’t influence easily.

You should look at how the six influences (policies, economics, society, technologies, laws, and the environment) impact your goals. Are certain policies making it harder to achieve? Are you lacking funding or your paycheck is getting cut? Are how others think about your goals influencing your success?

You’d continue with this line of thinking throughout the rest of the PESTLE analysis. And once you’ve got the information needed, you’d reflect on it and use it to achieve your goals.

Read: How to Brainstorm, Research, and Write a PEST Analysis From Scratch

3. Make strategic business-decisions by using PESTLE analysis and SWOT analysis

When you’ve got these two analyses, making business decisions is easier. You shouldn’t be surprised to find out so many people make professional decisions without an ounce of research. This the surefire way to get yourself in trouble.

PESTLE and SWOT analysis require information. For PESTLE, you’re collecting facts about the six environmental influences — which you can obtain from reports, government websites, and publications you trust.

This information should be factual, not something heard from a friend-of-a-friend.

SWOT analysis is similar, however most times, you’re not using external data. You’ll acquire information internally. It’s still based on research, facts, or information from the people who matter (business partners, managers, and employees).

You should use the findings of both SWOT and PESTLE analysis before making any important decisions. When you’ve completed both, you’ll have the internal and external information needed to make smart, informed choices.

4. Find Risks and crush them with PESTLE analysis and SWOT analysis

No matter what you’re doing — creating a product, a school report, or building a business from scratch — risks aren’t your friend. If you can avoid them, you should.

This is where SWOT and PESTLE come in. These two identify critical information about your topic and the many unavoidable factors influencing it. In doing so, you’ll likely discover risks you hadn’t realized were there.

For instance, let’s say you’re a sales manager and your sales team is having communication issues. Most say they’re meeting the weekly cold calls quota, but you find out that half of the team is pretending to dial rather than actually calling prospects.

Not only is this a risk for the company (sales are dropping faster than you can count), but your team is also dejected. So dejected, most are considering other jobs — some are already signing for new positions!

If you hadn’t followed up with the team, you may not have noticed how risky this behavior is. It’s putting the company in financial distress, employees are on the breaking point, and in a few short months, there might not even be a sales team anymore.

Using SWOT analysis (particularly the “weakness” section) you may have identified that many of the team seem hesitant to discuss cold calling. You could also use the “opportunities” section to brainstorm ways to get the team on the same page about cold calling — find out what makes them not want to do it. And then, in the “threats” part, you’d discuss the consequences of ignoring these problems.

As for PESTLE analysis, you could study how people, in general, feel about cold calling during the “social” section (most people feel intense anxiety about calling strangers). You could also look into the economics surrounding cold calling, and what sort of “environment” is needed for this to be a successful venture.

In doing so, you’d likely run into what isn’t the right environment for a sales team (risks), and how much or little cold calling makes most companies (potential risks).

This is just one example of a specific instance and person. But risks are everywhere — you’ll only know if you’ve done the research for it.

Final thoughts

PESTLE and SWOT analysis give internal and external insight about a topic. This is beneficial for people of all walks of life. Without it, you may never discover your true strengths and weaknesses. Or realize how much the macro-environmental factors of PESTLE analysis truly influence everything around us.

Use these two simple analyses to your advantage whenever you need.

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