Importance of SWOT and PESTLE Analysis in Organizations
SWOT is the short form of Strengths Weakness Opportunities and Threat whereas PESTLE defines the Political Economic Social Technological Legal and Environmental factors affecting business. The SWOT and PESTLE analysis it is possible for companies to do the detailed analysis for creating strategic plans.
SWOT and PESTLE analysis is first done at the preliminary stages of a business planning process. SWOT analysis is usually carried out to find the competitive advantage over other companies. What are the strong and weak points of the company with respect to the competitors can find out through SWOT analysis. Analysis of the Opportunities and threats that may occur which will affect the company in the long and short term also can be analyzed through SWOT analysis. Through PESTLE analysis the external factors which affect the business environment can be analyzed.
Most organizations also do SWOT and PESTLE analysis on a yearly basis to get data related to the year. This is particularly helpful in doing a reassessment and finding out the emerging opportunities and threats. Also, yearly environmental conditional changes can also be analyzed through this. Technological advancements and economic changes can also be seen through this.