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 and 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.
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 are 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 has been proposed and may come into effect and any passed legislations.
- 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. Best of all you can use our PEST Analysis Tool to draw them.
Related Reading: SWOT analysis vs GAP analysis
Comparing SWOT Analysis Vs PEST Analysis
Directly comparing SWOT vs PEST is probably the wrong thing to do. They are both planning methods that give tremendous insights for you to successfully execute projects.
The disadvantage of PESTLE analysis is it doesn’t consider the internal factors of your organization. It deeply analyzed the external factors that might affect your project or organization. So if you plan your projects based only on the PEST analysis you will not have a chance to match your strengths to a current need.
SWOT analysis considers both the internal and external factors. It captures the external factors in the opportunities and threats section. However, when creating a SWOT diagram a deep analysis of external factors are not performed. At least not as extensively as a PEST analysis. So you might miss out on external factors that can benefit your project.
So a better approach would be to perform an extensive PEST analysis and use that finding in the opportunities and threats section in the SWOT analysis.
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 invite another team member to contribute to the diagram. This makes it easier for all relevant departments and team members to contribute. It 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]