When it comes to the strategic planning of your business going forward, the best way to predict our chances of success is to use a SWOT or PESTLE analysis. Once applied to a new idea or project, such analysis will help you to understand the potential for success or the likelihood of failure.
However, which one should you go for? Well, this will depend but many businesses will perform both to ensure that all boxes have been ticked. SWOT analysis is aimed at the internal factors of your business while PESTLE will look at factors externally that may impact the success of an idea.
This article will take you through a summary of what SWOT and PESTLE are and how they can help you to make the right decisions for your business.
SWOT (Strengths Weakness Opportunities and Threat)
As mentioned above, a SWOT analysis will take a look at areas of your business internally. These are:
● Strengths of your business: Compared to your competitors, what are the strengths that your business has?
● Weaknesses of your business: Conversely, what areas of your business needs improving when compared against your competitors.
● Opportunities: Are there any current trends that you can take advantage of for the growth of your business? Are there any other opportunities that your business can make use of?
● Threats: Are there any potential threats to your business? How much of a negative impact could these have on the future of your business?
The above is just a summary of what a SWOT analysis is. It will allow you to highlight your strengths, understand what you need to do better and determine the potential risks and opportunities that might come your way. Once performed in detail, it will give you a better understanding of whether a new idea or project is worth it in the long run.
Using privacidadenlared services can also help you spot trends when you are making a competitor analysis in a foreign country. Use this software to bypass the geo-blocks.
PESTLE (Political Economic Social Technological Legal and Environmental)
A PESTLE analysis generally looks at factors outside of your control externally. How each might affect your business has to be analysed to determine the risk/reward of any new idea. The six areas a PESTLE focuses on is the following:
● Political: This is to understand how current politics may impact your business. Would one political party over another give your business a better chance of growth?
● Economic: What is the current economic climate and how is this likely to impact your business? Could increased taxes or other financial issues cause problems for you or your potential customers?
● Social: Are you taking advantage of current cultural trends? Do you understand your target audience? How are your competitors doing in this regard?
● Technological: Are there new technologies that could have a positive effect on your business? What parts of your computer networks and systems could be improved upon?
● Legal: Could a change of laws make a difference to your business? Are you ready to adapt if new policies come in that could impact you negatively?
● Environment: How much of an impact does climate change have on your business/industry? Could you be doing more to make your business environmentally friendly?
So which is better for your business?
While brief, the above summary of each analysis should give you an idea of what they are and how they might help in the decision making of your business. Both look at different factors that could have an impact on your business, so deciding which is best will depend on what you and your business needs. Ideally, you would use both before embarking on any radical new ideas.
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