SWOT and PESTLE Analyses Guidance
Please use the following information to assist you with completing SWOT and PESTLE analyses. These analyses are best conducted as a group exercise with relevant personnel within the organisation, and should be reviewed regularly. Feel free to call Neil if you’re having problems here.
SWOT Analysis
A SWOT analysis is a business strategy technique that helps an organisation identify INTERNAL Strengths & Weaknesses, EXTERNAL Opportunities & Threats related to the whole organisation or to individual projects. The analysis intends to assist with specifying the Objectives of an organisation or project and identify the internal and external factors that are favourable and unfavourable to achieving those objectives.
Users of a SWOT analysis often ask and answer questions to generate meaningful information for each category to make the tool useful and identify their competitive advantage. Strengths and weakness are frequently internally related, while opportunities and threats commonly focus on the external environment.
The SWOT analysis will help your organisation determine what can be enhanced/exploited further or what must be mitigated/treated according to your appetite for that specific risk (using ASTRA).
A SWOT analysis is important because it will inform later steps in planning to achieve ISO Objectives.
PESTLE Analysis
A PESTLE analysis (Political, Economic, Social, Technological, Legal, Environmental) describes a framework of factors used in identifying and understanding the needs and expectations of interested parties and workers, an absolute requirement of ISO 9001: 2015, 14001: 2015, ISO 45001: 2018, and ISO 22301:2019.
An interested party can be defined as a stakeholder, person, or organisation that can affect, be affected by, or perceive itself to be affected by your organisation’s decisions or activities. Sustained success is more likely to be achieved when your organisation manages relationships with all of its interested parties to optimise their impact on your performance.
Examples include customers, clients, company owners, internal staff, decision makers, suppliers, bankers, regulators, unions, local communities, local populations, business partnerships, competitors, and opposing pressure groups.
We need to identify and understand their needs and/or expectations, what risk and opportunity they bring, and how we will deal with the risk and opportunity presented.
The basic PESTLE analysis includes six factors:
Political: political factors relate to how the government (national or local) intervenes in the economy. Specifically, political factors have areas including tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government aims to provide or be provided (merit goods) and those that the government does not want to be provided. Furthermore, governments have a high impact on the health, education, and infrastructure of a nation.
Economical: economic factors include economic growth, exchange rates, inflation rate, and interest rates. These factors greatly affect how businesses operate and make decisions. For example, interest rates affect a firm’s cost of capital and therefore to what extent a business grows and expands. Exchange rates can affect the costs of exporting goods and the supply and price of imported goods in an economy.
Social: social factors include the cultural aspects and health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. High trends in social factors affect the demand for a company’s products and how that company operates. For example, the ageing population may imply a smaller and less-willing workforce (thus increasing the cost of labour). Furthermore, companies may change various management strategies to adapt to social trends caused from this (such as recruiting older workers).
Technological: technological factors include technological aspects like R&D activity, automation, technology incentives and the rate of technological change. These can determine barriers to entry, minimum efficient production level and influence the outsourcing decisions. Furthermore, technological shifts would affect costs, quality, and lead to innovation.
Legal: legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products. This could also be extended to include specific industry standards.
Environmental: environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.
