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Make a New Year’s resolution to re-visit your PESTLE and SWOT

SWOT Analysis - Strengths, Weaknesses, Opportunities, Threats. Picture of SWOT on a blackboard

As another year draws to a close, it’s the perfect opportunity to reflect on what your business or organization has achieved this year.  It’s also the perfect time to consider your organisational goals for 2013: What products will you develop?  What projects will you run?  What new markets will you explore?  And, of equal importance, what risks and threats must you mitigate against just to stay in business?


There are two excellent, simple and intuitive techniques that can really help.  Due to their simplicity, these techniques are often overlooked and in fact these techniques are often seen as perhaps a little “passé” and out of fashion.  Don’t be fooled—when used correctly, they can yield excellent insight and can provoke innovation.  These techniques are suitable for businesses of all sizes, whether small, multi-national or mid-sized.  The two techniques are PESTLE and SWOT.


PESTLE: External Environment Analysis

PESTLE provides a simple structure for brainstorming and uncovering factors in the external business environment that might affect an organisation.  The mnemonic stands for:


Political:  What factors in the political environment might influence or impact your organisation?  Do you foresee a change in government or policy – if so, what might this mean for your business?
Economic:  What micro and macro economic factors are important for your business?  What economic trends do you need to monitor?
Social/Social-economic:  What customer segments are you targeting?  What issues and fashions are important to them?
Technical:  How can technology enable your business?  How has technology changed/how is it changing?
Legislative (Legal/regulatory):  What laws affect your business?  What regulations must you adhere to?  What specific constraints does this infer?
Environmental:  How environmentally sustainable is your business? Which environmental issues are particularly relevant for you?


It is well worth spending time with your colleagues brainstorming and understanding each section in turn.  Once you have this view of the external environment, you can consider your own internal strengths and weaknesses too.


SWOT: Strengths, Weaknesses, Opportunities, Threats

It’s possible to build upon a PESTLE analysis by considering how the external environmental factors might create opportunities or threats for your organisation or business model.  It is quite possible that some factors might sit in both the opportunity and threat box—for example, a new law might be a threat to your existing business model, but might provide stimulus to change and differentiate from your competitors.


SWOT Analysis - Strengths, Weaknesses, Opportunities, Threats.  Picture of SWOT on a blackboard

This is also the perfect time to consider your organisational weaknesses.  What might be a risk factor or an “Achilles’ heel”?  And of course, what are your organisational strengths?  Again, it can be extremely useful to consider these questions in turn by brainstorming with colleagues.  Ensure the results are documented on a flip-chart, whiteboard (or tablet PC!).


Pulling it together: Changing course

One common mistake that people make with SWOT and PESTLE analysis is to simply “put it in the drawer” once it’s done.  Unfortunately, this really does mean that the effort has been wasted.


Used correctly, these simple techniques can be a great catalyst for action.  Once you have used these techniques to re-visit your external environment as well as your internal strengths and weaknesses, you can plan to take action.  You can decide which opportunities are most aligned with your strategy and plan to leverage them, whilst also planning to mitigate the threats.  This will spawn a number of initiatives for consideration.  You can use these ideas to consider what “success looks like” for each initiative, and define critical success factors, key performance indicators and analytics.  All achieved from the humble PESTLE and SWOT…


Good luck!


I hope you’ve found this article interesting.  I’d love to hear your views, please add a comment below, or if you’d like to discuss further please feel free to contact me directly.



This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet.

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