swot analysis bachelor thesis

SWOT Analysis

All business students are assigned to conduct SWOT analysis, usually at the earlier stages of their studies. This page focuses on the application of SWOT analysis in a business context as a part of academic assignments . This is a comprehensive SWOT resource and it contains an explanation of SWOT theory, an illustration of how to do a SWOT analysis and links to examples of SWOT analysis of major multinational brands. Moreover, SWOT analysis template further below can be used to generate SWOT tables of top multinational companies along a range of industries.

SWOT Analysis: Theory

SWOT is a strategic analytical tool for assessing strengths and weaknesses of a business, analyzing opportunities available to the business, as well as, threats faced by the business. SWOT analysis can be used at organizational and personal levels.

As it is illustrated below, strengths and weaknesses are internal, i.e. businesses are able to influence and to manipulate with their strengths and weaknesses. Opportunities and threats, on the other hand, are external. It means businesses can only react to opportunities and threats and they do not have any means to influence opportunities and threats.

SWOT analysis has important practical implications. Specifically, with findings of SWOT analysis in their hands, the senior level management identify and built upon their strengths, discover new opportunities and work upon eliminating or minimising threats to the business. Accordingly, SWOT can be a powerful aid for senior level management to develop appropriate strategy for the business.

As a strategic analytical tool, SWOT analysis has some weaknesses as well. Specifically, the application of this tool may encourage users to focus on quantity of factors, instead of focusing on a few, but the most powerful factors having the biggest impact on the business. In other words, SWOT analysis lacks guidance and provision in terms of differences in importance between factors. As a result weak strengths may appear to balance strong weaknesses.

The majority of sources explaining SWOT analysis assume that their audience is businesses aiming to improve their operational efficiency. This SWOT analysis resource is different. It explains SWOT analysis assuming that you a business student and you have been assigned to conduct SWOT analysis as a part of your assignment.

How to do SWOT Analysis

You can conduct a SWOT analysis with the following four steps:

Step 1: Selecting a company

If your assignment requires conducting a SWOT analysis, you are either given a case study company by your educational institution or you are free to analyze a company of your own choice. In the first scenario, you have no option but to conduct a SWOT analysis of the company named in your assignment instructions. However, the majority of educational institutions provide students the flexibility to conduct SWOT analysis of a company of their own choice.

Students are often tempted to conduct SWOT analysis of their employer. Choosing your employer as a case study can be a good strategy if you have an access to detailed relevant information. Please note that only descriptive information would not suffice and you will have to justify your arguments by referring to relevant quantitative data. Therefore, if you are not able to find relevant quantitative data about your employer, your best choice could be to conduct SWOT analysis of a multinational enterprise. This is due to the availability of data about the majority multinational enterprises. This portal offers up-to-date sample SWOT analyses of the most famous multinational enterprises as part of company reports .

Step 2: Finding information

If you are conducting a SWOT analysis of a small or medium sized organization such as your employer, family business or a company you are related to in some ways, approaching the company directly may prove to be an efficient strategy to obtain required information. You may try to secure a meeting with a senior level manager and explain practical implications of your SWOT analysis for the business. In other words, you may be able to convince a senior manager that results of your SWOT analysis may provide an important insight into the business and managers can act upon this knowledge to increase the efficiency of the business at various fronts.

Alternatively, if you are conducting SWOT analysis of a multinational enterprise, company annual report is usually the most comprehensive source of the relevant information. Note that annual reports highlight information about strengths of the business within the first few pages and you cannot find information about weaknesses of a company in its annual report for obvious reasons.

Information about Strengths in SWOT Analysis

Information about strengths of the company is easiest to find in your SWOT analysis. Strengths are competitive advantages of the business that made it successful in the first place. In case of small or medium sized organizations, the manager you are interviewing will be happy to discuss the strengths of the business.

In case of multinational companies, on the other hand, the first few pages of annual reports boast about competitive advantages of the business by referring to specific figures and charts. Using some of these charts in your assignment and properly referencing the source is going to increase the quality of your work.

You can determine strengths of businesses in answers to the following questions:

• What advantages does the company have?
• What does the company better than its competitors?
• What unique or low-cost resources are available to the company that are not available to its rivals?
• What Unique Selling Propositions (UPS) are associated with the company?

The following table illustrates the major strengths possessed by businesses and tips about how to discuss these strengths in your swot analysis:

Information about Weaknesses in SWOT Analysis

It may not be easy to find information about weaknesses of small and medium sized businesses. The manager you are interviewing may not want to discuss weaknesses of their business either intentionally, or they may not be aware of weaknesses. It is important for you to motivate your interviewee to discuss weaknesses of their company by asking relevant questions in a polite way.

It is easier with multinational organizations. An extensive online research can reveal relevant information about weaknesses associated with the company you are analyzing.The majority of big corporations have been involved in some kind of scandals during the past two years and you can discuss the damage of these scandals to the brand image as noteworthy weakness of the company.

For example, suppose you have chosen Coca Cola Company for your SWOT analysis assignment. If you google the term ‘Coca Cola scandal’, search results on the top relate to a scandal where the company funded obesity research that downplayed the negative health implications of Coca Cola products. Negative implications of this incident on Coca Cola brand image is brand’s weakness you can discuss in you SWOT analysis.

All arguments and numbers need to be referenced using referencing style required by your educational institution in an appropriate manner. Preference has to be given to online journals and magazines over online discussion forums and personal blogs.

Answers to the following questions can help to identify weaknesses of your case study company:

• What aspects of the business could the company improve?
• What should the company avoid?
• What factors are causing the company to lose sales?
• What aspects of products/services are customers are likely to see as weaknesses?

Major weaknesses of businesses and brief tips about discussing them in your assignment are illustrated in the following table:

Information about Opportunities in SWOT Analysis

Information about opportunities available to the business can be derived from its weaknesses in a way that businesses often have an opportunity to turn their weaknesses into strengths. At the same time, it is important that your SWOT analysis also identifies a set of opportunities that are not related to weaknesses. If you can’t think of any company-specific opportunities, you can discuss business opportunities that can be explored by any business in general, such as new product development, international market expansion and increasing the level of effectiveness of social media marketing. Interesting trends in the industry can also be opportunities for the business.

Opportunities can be identified through answering the following questions:

• What are interesting trends in the market that can be profitably explored by the company?
• What are the demographic and social changes that present new opportunities in the industry?
• Are there any government policies and regulations that can help the industry?
• Are there any opportunities for the company related to technological developments?

The following table illustrates the major opportunities available for businesses and tips about how to discuss these opportunities in your SWOT analysis:

Information about Threats in SWOT Analysis

Threats faced by the business can be classified into two categories. Firstly, there are company-specific threats that stem from company-specific factors such as the threat of losing market share due to ineffective cost structure or the threat of negative media coverage and damage to the brand image due to neglecting the importance of corporate social responsibility. Secondly, there are threats to the industry or to the economy on the whole, such as a threat of introducing tariffs to a certain range of products or the threat of a global economic and financial crisis. You will need to find information about threats belonging to both categories with more emphasis on the threats from the first category, i.e. company-specific threats.

You can identify the main threats to the business through answering the following questions:

• What are the main obstacles faced by the company?
• What are the latest developments in competitor Unique Selling Propositions?
• Does the company have substantial amount of bad debts or cash-flow problems?
• Was the company involved in any scandal recently?

Main threat facing the majority of businesses and brief tips about discussing them in your SWOT analysis are illustrated in the following table:

Step 3: Writing

You can structure your writing of SWOT analysis in the following way:

Firstly, you will need to discuss the company profile, its strategy and the most recent changes that have taken place in the company prior to presenting your SWOT analysis. The length of such a discussion depends on your assignment instructions and the total word count for your assignment.

Secondly, develop a SWOT Analysis Matrix for your chosen company. You can develop a table containing four sections headed strengths, weaknesses, opportunities and threats. Major strengths, weaknesses, opportunities and threats of your chosen company can be presented in bullet points under respective boxes. These should be precise and verifiable statements.

Using steps 1 and 2 above, you should have long list of factors related to strengths, weaknesses, opportunities and threats for the business. Now it is time to prioritize factors to be included in your SWOT analysis by focusing on the most significant factors. The numbers of factors that should be discussed under each category depends on the total word-count for your assignment.

Thirdly, you have to discuss bullet points in your SWOT table. Your analysis needs to contain statistical data and ideally graphs and tables as well. Do not forget to reference sources, using referencing system  required by your university. Moreover, you can discuss how to address weaknesses and threats identified as a result of your SWOT analysis and get additional marks for your work.

SWOT Analysis Example

This portal contains example SWOT analysis of the following companies:

SWOT is an acronym for strengths, weaknesses, opportunities and threats related to organizations. The following table illustrates SWOT analysis:

SWOT Analysis Template

Please choose an industry and a company below to generate a SWOT table containing bullet points of strengths, weaknesses, opportunities and threats of your chosen company. In order to complete the SWOT analysis you will need to expand the bullet points into a couple of paragraphs with discussions and references from reliable sources to support your arguments.

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How to Write a SWOT Analysis Paper

Successful businesses and people have been conducting SWOTs since at least the mid-twentieth century and have refined the process over time. The four categories you will explore in your SWOT analysis paper are Strengths (S), Weaknesses (W), Opportunities (O), and Threats (T). You can use SWOT analysis to help you assess your position in project planning, business development , finance, relationships, or for personal growth. Since SWOT analysis papers are usually assigned in business school or associated with business planning, we will focus on the steps for writing a SWOT analysis paper for business, but keep in mind that the process can be tailored to any situation—professional or personal.

If this process sounds laborious or daunting, do not fret: As with most things, conducting a SWOT analysis will get easier the more you do it, and eventually it might become an essential part of all of your decision-making processes. As you evaluate your business's strengths, weaknesses, opportunities, and threats, you will gain skills and insights that can help you evaluate yourself, your business, and various decisions you are facing.

Better than a pros and cons list

Perhaps you are thinking, This sounds just like a pros and cons list . A SWOT analysis provides more information than a simple pros and cons list, and it makes it easier to identify potential action items and areas for growth. SWOT analysis considers more than just the pros and cons of a situation: It helps you identify internal and external factors that contribute to or inhibit your success.

Strengths and Weaknesses are generally considered internal factors, so they are things that you or your company can control or can work to improve.

Opportunities and Threats are typically external factors that occur outside of your business (i.e., things that you cannot control), but they are things that could significantly affect you or your business.

Identify your objective/goal

To get the most benefit from your SWOT analysis, be as specific as possible with your objective . If you are analyzing a business, consider focusing on one particular aspect of the business.

The best way to formulate your paper is to use a SWOT analysis chart to organize your thoughts before you actually start writing.

Write down the initial strengths, weaknesses, opportunities, or threats that come to mind when you consider the objective. Use bullet points to separate items, be specific, and remember that you do not have to write in complete sentences on this chart. To be sure that you explore all applicable points, consider the following questions:

• What does the business do best?
• What do people like about it?
• What draws people to the business?
• What does the business offer that competitors can't or don't offer?
• What puts the business at a disadvantage?
• Consider employee feedback and customer reviews: Are there any items that multiple people have identified as issues?
• In what areas does the business have less resources than competitors?
• Why do potential clients choose a competitor over you?
• What areas would you like to improve?

Be honest as you assess the business's weaknesses. Consider what aspects put your business at a disadvantage or what factors limit your growth potential. If you shy away from identifying weaknesses in this step, your SWOT analysis will not be effective or beneficial. Although it can be painful to identify weaknesses that are currently holding you back from personal or business growth, identifying and exploring these areas will give you the opportunity to improve. If you are uncertain if an item should be classified as a Weakness or a Threat , remember that Weaknesses are internal (things within the business that you can work to change) and Threats are external (things you have little or no control over). Also, accurately identifying weaknesses might help you recognize potential opportunities and/or threats.

Opportunities

• Are there any potential market trends that suggest growth in your field in the coming year?
• Does the business have any possible partnerships or sponsorships on the horizon?
• Is the business considering expanding or developing new product lines or specialties?

In addition to any obvious opportunities, look at the strengths you've listed and see if there are any ways that you can turn strengths into opportunities.

• Is the business affected by government policy? If so, are there any potential policy changes in the future?
• What obstacles prevent you from doing more business or making more sales? Be specific and list them all.
• Do you have periods of unreliable cash flow that threaten the business?
• Does the weather or season affect the business?

Once you have listed all the strengths, weaknesses, opportunities, and threats, prioritize the results in each category from most impactful to least. Prioritizing your results in each of the four categories will help you visualize each item's importance so you can see how it relates to the other areas.

Writing the SWOT analysis paper

Now that you have filled out the SWOT chart and prioritized your SWOT results, you have the basic information to begin drafting your SWOT analysis paper. As with any professional paper, start with a strong introduction and state your objection and the focus of your SWOT analysis. In the next four paragraphs, describe the Strengths, Weaknesses, Opportunities, and Threats that you prioritized on your SWOT analysis chart. If you have more items for each category than can comfortably fit in a paragraph, consider condensing your list. As you review the lists in each category, eliminate redundancies and consolidate similar items. If you still have too many items to fit in one paragraph after condensing, include one to three bullet points per paragraph, and try to keep the paragraphs balanced. For example, if you write three paragraphs for strengths, try to write three paragraphs for the other three categories as well.

Once you have identified and described your SWOTs, you can use your SWOT analysis chart to develop strategies and create a plan to achieve your business goals. The analysis is the most essential part of the SWOT analysis paper, because in this portion you will create action items and develop plans that can lead to future success. Assess each of the four areas (Strengths, Weaknesses, Opportunities, and Threats) and look for commonalities or links between the categories. Some things to consider during this step:

• Can you use one of your strengths to address a threat?
• Look for ways to use your strengths to minimize your weaknesses.
• How can you use your strengths to seize growth opportunities?
• Is there a way to use your strengths to overcome threats?
• Are there any weaknesses that you can address and eliminate?
• Can you balance out a weakness by pursuing one of your opportunities?
• Are your weaknesses preventing you from capitalizing on opportunities?
• Are your weaknesses enhancing the likelihood that the business will suffer from a threat? If so, look to your strengths and see if there is a way to draw from your strengths to reduce the potential impact of the threat.

As you find connections between the bullet points in the four quadrants of your chart, start writing to generate ideas that you can turn into action. You can come back to edit these sentences and perfect these ideas later, but go ahead and record the thoughts now so you do not miss any potential connections. As you identify how different bullet points relate to each other, prioritize items that will generate revenue or reduce expenditure. Now, assess the action items that you have identified and put them in the order that makes the most sense to you. You can arrange your action items in the order that you would like to address them, or you can arrange them in the order that would make the most financial impact on the business. Organize the paragraphs in this section of the paper in your preferred order.

Now that you have performed a comprehensive SWOT analysis and identified action items to enhance strengths and reduce weaknesses, write a strong conclusion paragraph summarizing the most important findings. Keep in mind the purpose of your SWOT analysis paper here: If you intend to share this information with potential investors, make sure that you present a clear vision for growth and that you are realistic about how you will address weaknesses and potential threats. The crucial last step for any paper is to proofread, edit, and revise as needed. Now that you have completed your SWOT analysis and identified action plans, consider if applying a SWOT analysis to another aspect of your business or area of your life. Make a note in your calendar and conduct another SWOT analysis on this issue in six to twelve months so you can measure progress towards your goals.

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23 Best Personal SWOT Analysis Examples for Students

SWOT stands for strengths, weaknesses, opportunities, and threats.

It’s common for students to have a complete mind blank when asked to write a SWOT analysis. It can be hard to step back and objectively figure out what to place in each box in the analysis matrix.

However, by looking at some examples from other students, you can start to conceptualize what’s expected of you and even find yourself agreeing with some of their points.

Take a look at these personal SWOT analysis examples and see if you can cherrypick some key points that might resonate with you.

Pick and choose the points that resonate most with you so you can create your own unique SWOT chart.

Personal SWOT Analysis Examples for Students

1. swot analysis template.

Goal: Write down what your goal is.

2. Personal SWOT Analysis Example

Goal: To gain confidence at university.

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3. Academic Writing Example

Goal: To get an A in an essay this semester.

4. New Student Example

Goal: To Get into a Routine and Comfortable on Campus.

5. College Student Example

Goal: To raise my GPA by 0.5 this year.

6. International Student Example

Goal: To gain confidence in a new society and develop cultural competencies.

7. Education Student Example

Goal: To develop skills and knowledge in teaching.

8. Sociology Student Example

Goal: To figure out how to use my sociology degree to get a career job.

9. Bachelor of Arts Student Example

Goal: To figure out what I want my major to be

10. High School Student Example

Goal: To develop the skills that I’ll need at college next year

11. Math and Science Example

Goal: To get a job in the science field following graduation.

12. Digital Marketing Example

Goal: To improve my skills in digital marketing while still at university.

13. Masters Degree Example

Goal: To complete my masters degree within 3 years

14. Business Student Example

Goal: To gain the skills I need to start my own business in the future.

15. Nursing Student Example

Goal: To get a job in nursing after I graduate with a good GPA.

16. Teacher Example

Goal: To gradually improve my pedagogical competencies in the next 12 months.

17. PhD Student Example

Goal: To make it through the first year of doing a PhD.

18. Internship or Practicum Example

Goal: To grow my confidence in a workplace situation and see if I like this career path.

19. Exchange Student Example

Goal: To broaden my horizons for an exchange semester.

20. Thesis or Dissertation Example

Goal: To get a high grade for my dissertation.

21. Teamwork and Groupwork Example

Goal: To complete our team project and get the best grade in the class.

22. Psychology Student Example

Goal: To get a career in clinical psychology.

23. Graduating Student Example

Goal: To smoothly transition into an entry-level position in my career choice

What does SWOT Analysis Stand For?

SWOT stands for strengths, weaknesses, opportunities, and threats. These are the four key categories that you need to look at to develop an action plan for improving your skills as a student.

Under each column think about what you will write:

• Strengths: What are you aware that you’re good at right now? Make sure it’s relevant to your goal. For example, if your goal is to gain confidence at university, make it relevant to that and not something completely different (being really good at hotdog eating contexts is irrelevant to becoming a more confident student!)
• Weaknesses: What do you struggle with right now? Again, keep it relevant to your goal. If your goal is to get an A in your next paper, reflect on your weaknesses in essay writing.
• Opportunities: What can you think of that might be a valuable resource, support network, or another type of opportunity that can help you to meet your state goal?
• Threats: What can you think of that might make it hard to meet your goals? It’s good to know these so you can prepare ahead and minimize the chance that they will become major obstacles.

What is the Purpose of a SWOT Analysis?

The point of the SWOT analysis is to get you thinking about how you can prepare for improvement. If you know your weaknesses, opportunities, and potential challenges, you can work on the weaknesses, embrace the opportunities, and avert the threats. This will help you get closer to your goals.

Another alternative type of reflective analysis is the Johari Window , which is best completed in teams where your team members can provide input for you.

How to Do a SWOT Analysis

What to write for strengths.

When writing about strengths on a SWOT Analysis, you want to write about things that you’re personally good at.

These strengths are ‘internal’, meaning they’re features about you that make you good at things. They’re things under your direct control.

One problem students come across is that they don’t focus on strengths that are relevant to your goals . So, focus on strengths that can help you achieve your goals.

Key considerations when writing about strengths include:

• What do you do well (in relation to your goal)?
• What study skills do you currently have?
• What academic writing and research skills do you currently have?
• What workforce skills do you currently have?
• What soft skills do you currently have?
• What hard skills do you currently have?

We have a list of 110 strength examples for a SWOT analysis that you can browse to find ones that work for you.

What to Write for Weaknesses

When writing about weaknesses on a SWOT Analysis, you want to write about things that you’re personally not very good at.

These weaknesses are ‘internal’, meaning they’re features about you that you know are not your strongest trait. Like strengths, these weaknesses need to be things under your direct control.

Remember ot keep them relevant to your goals . So, focus on weaknesses that might prevent you from achieving your goals.

Key considerations when writing about weaknesses include:

• What do you think you’re not very good at (in relation to your goal)?
• What do you struggle with when studying?
• What are your weaknesses in regards to academic writing and researching?
• What workforce readiness skills do you lack?
• What soft skills do you lack?
• What hard skills do you lack?

We have a list of 79 weaknesses examples for a SWOT analysis that you can browse to find ones that work for you.

What to Write for Opportunities

When writing about opportunities on a SWOT Analysis, you want to write about things that you can rely on to help you reach your goals.

These opportunities are ‘external’, meaning they’re not personal features about you, but resources, people, or events that you turn to for help.

Again, remember to talk about opportunities that are relevant to your goals .

Key considerations when writing about opportunities include:

• Are there upcoming seminars, classes, or lectures that can help you improve?
• Do you have access to resources to help you improve?
• Do you have access to people or friends who can help you out?

We have a list of 61 opportunity examples for a SWOT analysis that you can browse to find ones that work for you.

What to Write for Threats

When writing about threats on a SWOT Analysis, you want to write about things that are outside of your direct control that might interfere with you achieving your goals.

These external threats are examined so you can predict them and think about ways to either avoid or mitigate their effects.

Remember to talk about threats that are relevant to your goals .

Key considerations when writing about threats include:

• What contextual factors might get in the way of your goals?
• What obstacles can you predict that might interfere with your plans?
• What resources do you lack that would otherwise be helpful?

A SWOT analysis is designed to get you thinking about how to use your personal strengths and opportunities to your advantage, while also improving your weaknesses and mitigating threats that you can predict.

While these examples can help get you mind turning, remember that your SWOT Analysis needs to be unique to you. So, use these personal SWOT analysis examples by students to get your mind turning, but write your own unique SWOT matrix that’s an honest reflection of your own situation.

Chris Drew (PhD)

Dr. Chris Drew is the founder of the Helpful Professor. He holds a PhD in education and has published over 20 articles in scholarly journals. He is the former editor of the Journal of Learning Development in Higher Education. [Image Descriptor: Photo of Chris]

• Chris Drew (PhD) https://helpfulprofessor.com/author/chris-drew-phd/ 5 Top Tips for Succeeding at University
• Chris Drew (PhD) https://helpfulprofessor.com/author/chris-drew-phd/ 50 Durable Goods Examples
• Chris Drew (PhD) https://helpfulprofessor.com/author/chris-drew-phd/ 100 Consumer Goods Examples
• Chris Drew (PhD) https://helpfulprofessor.com/author/chris-drew-phd/ 30 Globalization Pros and Cons

2 thoughts on “23 Best Personal SWOT Analysis Examples for Students”

Dr Chris… Excellent article and it was really helpful for me to set SWOT analysis for my students. The content of the article is highly useful and practical too to adopt for educational institutions. Thank You Dr Shyam prasad TS Asst Prof, RV Institute of legal studies , Bengaluru, India [email protected]

Thank you so much for the detailed SWOT for my learners.

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Life cycle assessment, SWOT analysis and market study of innovative sulfur-based materials/products

• type: Masterarbeit
• Date: ab sofort

Dr. Rebekka Volk

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Background Climate change demands for greenhouse gas reduction or mitigation and multiple energy and resource efficiency actions. However, it needs to be assessed, if and how new materials/products really contribute to (inter)national sustainability goals and to climate goals and circular economy in particular. Also, it is necessary to assess the associated cost to discuss and decide on favorable framework conditions for their usage.

Content of the work Aim of the thesis is the data collection and assessment of new sulfur materials and products . Sulfur (S8) is an ample available element that is a byproduct e.g. of petroleum refining. Due to many possible applications, first a promising material and most relevant applications should be identified and selected. Then, a SWOT or similar analysis should be performed to identify strengths, weaknesses, opportunities/potentials and threads/risks. Then, the thesis should include a simplified life cycle assessment (LCA) with its main outcomes of CO2e emissions and primary energy demand. For this, a revision of relevant literature and expert interviews with fellow researchers have to be performed to collect data. Third, the LCA should be performed with openLCA or Gabi software. The calculations should be done for a case study material/product and can be associated with a market study. Furthermore, the assessment should include the comparison with traditional materials/ products that could be replaced by the new sulfur-based material/product.

Requirements This thesis is suitable for students in industrial engineering or similar fields. Intrinsic motivation, proactiveness and affinity to numbers are helpful. The preferred language of the thesis is English. You will be able to enhance your knowledge on new, sustainable materials, industrial ecology and circular economy. Furthermore, you will gain proficiency and expertise in technoeconomic and environmental assessments and LCA software.

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PESTEL Analysis – External Business Environments

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A PESTEL analysis is a business tool used by organizations looking to introduce a new product or service to the market. It is an important tool featuring external factors which will be discussed in this post.

Inhaltsverzeichnis

• 1 FAQs: PESTEL Analysis
• 2 Definition: PESTEL Analysis
• 3 PESTEL Analysis Factors
• 4 How to Conduct a PESTEL Analysis
• 5 Why is a PESTEL Analysis Important
• 6 In a Nutshell

FAQs: PESTEL Analysis

What is the difference between pest and pestel analysis.

PEST and PESTEL analyses are both economic tools. They are used to evaluate certain aspects of a business or corporate environment. The primary distinguishing factor between the two tools is that a PESTEL analysis includes two additional factors. A PEST analysis looks into political, economic, social, and technological aspects. PESTEL tackles all the aspects mentioned above, plus legal and economic factors. Other than the two additional factors, there isn’t much of a difference between the two economic tools as they perform the same function.

What's the difference between a PESTEL and SWOT analysis?

Both PESTEL analyses and SWOT analyses are used to analyze the environment in which a product is meant to take its place. The differences between the two tools are that PESTEL analyzes external factors while a SWOT analysis focuses on both internal and external factors. They are both incredible tools with benefits and downsides.

Is a SWOT analysis or a PESTEL analysis better?

The main advantage of a PESTEL analysis is that it simplifies the analysis process by using major macro-environment factors. The tool also helps to identify potential threats through external factors. It, therefore, allows businesses to develop strategies to counter the potential issues. On the other hand, the primary benefit of a SWOT analysis is that it presents data in the simplest way for easier comprehension. It also covers significant areas like competition and potential weaknesses that need to be addressed.

The downside of PESTEL is that it only covers external factors. On the other hand, the downside of a SWOT analysis is that it lacks prioritization of key problem areas. When deciding which of the two is the better option, consider the advantages and downsides of each.

Who invented the PESTEL analysis?

In 1967, a Harvard professor called Francis Aguilar created an analysis tool called ETPS. It was later renamed to the acronym PESTEL that we know today.

Definition: PESTEL Analysis

PESTEL is a mnemonic for Political, Economic, Social, Technological, Environmental and Legal. A PESTEL analysis is a concept applied in marketing principles. It is used by companies as a tool to track environmental factors and how they affect the operation of a business. Businesses conduct PESTEL analyses when they are planning to launch a new product or expand their services or projects.

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PESTEL Analysis Factors

The PESTEL analysis features 6 main factors that affect the performance and growth of a business. The factors include:

Political factors

This is the first of the PESTEL factors. This one deals with the way legal and political factors affect the business environment as well as the trade markets. Some political factors that affect the business environment include political stability, tax guidelines, trade and safety regulations, and employment laws.

Consider businesses in particular countries and think about how the government may intervene in economic activity.  Governments have a substantial influence on the health, education and other public sectors of a nation. With elections come new pieces of legislation which in turn effect business activity.

Economic Factors

This element looks into how economic factors affect the performance of a business. Some of these factors include inflation, unemployment and exchange rates, economic growth, and consumer disposable income, among others. Each of these factors has a direct impact on the performance of a company.

For instance, elements like economic growth and unemployment rates affect the purchasing power of the consumers. This means that the demand for a product will decrease. The decrease in demand also affects the supply and the prices of products and services provided by a company.

Social Factors

The social environment also affects elements like demographic characteristics, customs, norms, and the values of the population. All these elements affect the operations of the business. The population is also a social factor that affects the operation of a business.

Elements like age distribution, income, growth, and career attitudes affect the performance of a business. For instance, population growth affects the demand for a product. This in turn affects the prices and the quantity of supply of a product. All these elements affect the overall growth of the business. When analysing social trends, you should be able to ensure the reliability and validity of your information.

 Technological Factors

Technological factors influence the way a business operates. Some factors that affect the operations of the tech market can either affect the performance of a business positively or negatively. These aspects also influence the decision of a business to introduce a new product in certain markets. It also influences the decision of a business to invest in a certain product.

The knowledge of technological trends may either promote or prevent a business from spending money on it. For instance, if a certain tech product that assists in the success of a business is expected to become obsolete in the near future, then why would a company spend money on it? The same can be said about apps and linked technologies.

 Environmental Factors

Environmental factors significantly affect the performance and operations of a business. They include factors like shortage of raw materials, pollution, and carbon footprints. Ecological elements like climate, weather, and changes in environmental offsets also affect businesses. The businesses that are affected fall in categories like farming, tourism, insurance and agriculture.

For instance, changes in weather and the climate affect the success of the farming industry. Which in turn influences the number of raw materials, which in turn affects the supply. The supply affects the prices of the products, which in turn influence the willingness of clients to purchase.

 Legal Factors

The last element of the PESTEL analysis is the legal factors. Legal factors are in many ways similar to political factors. However, they are more specific. They include labour laws, discrimination laws, consumer protection, patent and safety laws, among others. This aspect shows that companies need some intel on legal affairs that affect their operations.

For instance, laws about trademarking may affect the growth of a company that is looking to trademark and introduce new products. Laws surrounding the rights of workers will impact the HR department of a company. Additionally, the performance of a business is influenced by issues like following public safety regulations and ingredient regulations.

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How to Conduct a PESTEL Analysis

When conducting the PESTEL analysis, consider the following steps:

Understand the categories- The first thing you have to do is study and understand each of the factors in the PESTEL analysis. Look into each of the factors and understand them in depth.

Conduct your research- After understanding the categories, you ought to conduct adequate research. For instance, look into the information you need to include and where you can find the information.

Write the PESTEL analysis- The next step is to create the analysis. Come up with six sections featuring the six factors. In each section, include factors that are relevant to your business or product. You can split the sections further into subsections.

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Why is a PESTEL Analysis Important

A PESTEL analysis can play a great roll in the success and growth of a business. The tool helps business owners to identify significant changes in political, economic, social, technological, environmental and legal factors. Additionally, it can help business owners to plan the expansion of their business into different or foreign markets. By conducting a PESTEL analysis, business owners will be able to ensure they’re sufficiently controlling all business departments and in turn will be able to generate more revenue.

Furthermore, PESTEL analyses can be combined with SWOT analyses to ensure that opportunities are maximized whilst threats are minimized. First conduct a PESTEL analysis and then use the external business opportunities and threats to assist you with your SWOT analysis. The results of both analyses greatly assist businesses with smart decision making. Once the decision has been made and the changes are implemented, it’s important to carry out benchmarking to ensure continuous improvement in the business processes.

In a Nutshell

A PESTEL analysis is an important business tool. It is used to determine how external factors affect the performance or operations of a business. The PESTEL analysis focuses mainly on 6 factors (political, economic, social, technological, environmental and legal). The tool is important for the success of a business. However, it only focuses on external factors.

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