When planning a project it is important to learn about the internal and external factors that can affect the project. There are some excellent strategic planning methods that you can use analyze all these factors. SWOT analysis and PEST analysis are two of the most frequently used planning methods. Below is a brief introduction to both methods and a comparison of SWOT analysis vs PEST analysis.
What is SWOT Analysis ?
SWOT when broken down simply means analyzing the:
- Strengths – The advantages you have over the competition concerning this project.
- Weaknesses – The disadvantages you have internally compared with your competitors.
- Opportunities – Current external trends which are waiting to be taken advantage of.
- Threats – External movements which may cause a problem and have a negative impact on your business.
Sometimes SWOT is referred to as SLOT, where weaknesses are names as liabilities. By working through each of these points it is possible to identify any internal disadvantages or advantages which could benefit or hinder the outcome of a planned project. In addition to evaluating the state internally this method is also able to identify the external factors which could also make a difference to the success or failure of a project. Creately has an excellent collection of SWOT analysis templates which you can download for free or modify online.
Using the Information
By knowing this information it can be possible to plan a successful project that is ready to work around certain problems effectively and to avoid failure. It is a good idea and excellent practice to work through the SWOT Analysis with your team in the early stages of project planning. Brainstorming is a great way of introducing all the relevant internal and external factors for each section of the analysis.
What is PEST Analysis ?
PEST stands for the analysis of the external factors which is beneficial when conducting research before beginning a new project or to help conduct market research. These factors are:
- Political – Laws, global issues, legislation and regulations which may have an effect on your business either immediately or in the future.
- Economic – Taxes, interest rates, inflation, the stock markets and consumer confidence all need to be taken into account.
- Social – The changes in lifestyle and buying trends, media, major events, ethics, advertising and publicity factors.
- Technological – Innovations, access to technology, licensing and patents, manufacturing, research funding, global communications.
Pest can also be known as PESTLE which includes other factors such as:
- Legal – Legislation which have been proposed and may come into effect and any passed legislation’s.
- Environmental – Environmental issues either locally or globally and their social and political factors.
Unlike SWOT this strategy is more directly aimed at the external macro environmental factors that might be affecting the position of your business, the reasons behind growth or decline in the market and also identify new directions for the business as a whole. Creately has some excellent PEST analysis templates for you to get started instantly.
Related Reading : SWOT analysis vs GAP analysis
Advantages and Disadvantages of SWOT Analysis Vs PEST Analysis
The advantage and disadvantages of SWOT analysis is that it is simple to come up with a list but far too easy to miss important external factors. Coming up with the results of each factor is not enough, for the SWOT to be successful it is essential to carry out further analysis of all the possible threats and disadvantages to make sure that they have been planned for in advance.
The advantages and disadvantages of PEST analysis is that while the external factors are looked at closely there are no internal evaluations carried out. Due to the advantages and the disadvantages of using either one or the other methods it is a good idea to combine the two to help provide you with the best analysis. It is good practice to perform the PEST and then use the results in the opportunities and threat section of the SWOT.
Working as a Team for the Benefit of a Project
When teams are not in the same building it can be difficult to get together and brainstorm effectively about a project. This could lead to vital information getting neglected, thus damaging the project. You can easily avoid this issue by using the collaboration facilities provided by Creately. The project manager can start drawing the SWOT and PEST analysis and invited other team member to contribute to the diagram. This allows for a larger contribution made from all relevant departments and team members which reduces the possibility of important information being missed.
The results which have been recorded on your Creately SWOT template can then be used to plan a project carefully and overcoming problems which could cause significant issues to the positive outcome of the project. Being prepared for all eventualities is vital in business, which is why SWOT and PEST analysis is so important.
Remember it is never enough to simply have the information to hand, what is vital is the way that the analysis is used in order to boost profits, make sure a project is successful and to identify areas of opportunity which could transform the business for the better.
Pestle and Swot Analysis [Accessed 23/02/12]