The SWOT and PESTLE analyses are effective study tools which are employed at the time of undertaking or planning to undertake a new business venture or new project in an already-established business. These studies, individually and together help to plan a project successfully by conducting an all-encompassing analysis by looking into various factors, internal and external, which may directly or indirectly affect the project. Thus, conducting this analysis helps the planners to gain a broad and full picture of the project at hand so that strengths can be capitalized and problems minimized.
The SWOT for example looks into both internal and external factors such as weaknesses and threats respectively thus giving the planners a 360 degree overview of the venture from within. PESTLE on the other hand looks at external factors only such as environmental and political which study the sub and superstructures on which the business or project will be based. It offers a bird’s-eye-view from a macroeconomic point of view. They are used while preparing a business plan. Although each of these two inquiry tools are quite effective on their own, for best outcomes they are both employed together. Generally the PESTLE follows the SWOT analysis.
After obtaining good background knowledge of the project and its influencing factors, the business plan can be made accordingly. For example, if the project requires the creation and production of a new kind of product which is an upgrade on a pre-existing model, the business would require the knowledge of the latest and most advanced technology available for the production of the same so that good quality product can be delivered at the effective costs. Also, product update requires a technological update almost by default. For this, research not only on the goods being produced but an update on technological advancement is also imperative.
The SWOT study points out the internal strengths and weaknesses of the project or business. When this knowledge is made available, the next step follows that these strengths must be exploited to the full and used in a manner that the shortcomings resulting from weaknesses are minimized. Similarly available opportunities can be exploited and threats avoided.
Thus the wholesome knowledge provided by SWOT and PESTLE is desirable for any venture. When one has information about something it automatically becomes easier to move ahead with it. Similarly, the SWOT and PESTLE can be viewed as the background research required before starting with a project of any sort. This is especially helpful because it takes away the problem of the “unknown” and thereby helps avoid unknown or unforeseen problems or risks.
Both SWOT and PESTLE are cost-free exercises that bring together all sections of the working organization for a brainstorming session. The questions and answers are all to be found within the group. These analyses are a practice in creative thinking, addressing problems and seeking solutions, developing strategies and very importantly, teamwork. It gives all members involved a chance to express their concerns and offer their advice. Sometimes specialists are recruited who may lead the discussions to obtain the maximum out of these evaluations.
It must also be clarified that the SWOT and PESTLE studies are not only undertaken at the start of any venture but in fact it is advised that routine re-assessments are carried out for an up-to-date and smooth functioning of the organizations.
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