We have helped 100’s of clients plan and prepare for the year ahead. A thorough marketing strategy and plan would not be complete without the use of SWOT and PESTLE analysis.
SWOT and PESTLE analysis are both analytical tools that we use to help the ecommerce clients we work with plan and forecast for future decision-making. SWOT assesses a company's strengths, weaknesses, opportunities, and threats. PESTLE dives into the political, economic, social, technological, legal, and environmental factors that may impact the company. These would usually be used as tools as part of a company's strategic planning process to help it identify potential risks and opportunities then develop strategies to mitigate or capitalise on them.
What is SWOT analysis?
A SWOT analysis is a simple but powerful tool that allows you as a brand to evaluate the internal and external environment that you operate within. The acronym SWOT stands for strengths, weaknesses, opportunities, and threats.
How do you conduct a SWOT analysis?
To conduct a SWOT analysis, you first identify your internal strengths and weaknesses as a business, these are factors within your control, such as its financial resources, technological capabilities, and the skills and experience of the people you employ. You then identify external opportunities and threats, which are the factors that are outside of your control, such as changes in the market, competition, and economic factors.
What questions should you be asking yourself when carrying out a SWOT analysis?
- What do our customers love?
- Where are we most efficient?
- What products or collections have been our highest performers?
- What makes us stand out amongst competition?
- Where are we lacking efficiency?
- Where is money being wasted?
- Where are we wasting time and resources?
- What are our competitors better at?
- What are our customers complaining about?
- Are there any gaps in the market we could fill?
- What new trends are emerging?
- Is there new technology that we can take advantage of?
- Can we expand our operations and offerings?
- Is our market environment changing?
- Could new technology replace us?
- Is the way that customers discover us changing?
- What social changes could threaten us?
- Is there new government policy or regulation that could threaten our operations?
How do you use a SWOT analysis?
Once you have identified your business's strengths, weaknesses, opportunities, and threats, you can use this information to develop strategies to capitalise on your strengths and opportunities and to mitigate or overcome your weaknesses and threats.
For example, if a clothing company was performing well financially and had developed a well-established customer base, it may decide to invest in new technology to ramp up production or allocate funds to expand into new markets. On the other hand, if the company has a weak supply chain or some tough competition has cropped up that they had discovered after conducting a SWOT, it may need to focus on improving its operations or finding ways to differentiate itself from these new competitors.
What is PESTLE analysis?
A PESTLE analysis is similar to a SWOT analysis but focuses on the political, economic, social, technological, legal, and environmental factors that may impact a company.
It's a strategic framework used to analyse and evaluate the external factors that could potentially impact your business. PESTLE is an acronym that stands for Political, Economic, Social, Technological, Legal, and Environmental factors. Through analysis of these factors, much like a SWOT, you can identify potential opportunities and threats that may impact your operations and assist you in making informed decisions to navigate challenges that could affect your business.
How do you conduct a PESTLE analysis?
Conducting a PESTLE analysis might sound challenging, but it's easier than you think and will be incredibly important to you over the coming months. You need to carefully consider each of the PESTLE factors and how they may impact your operations. If you have access to it, a great tool is Mintel. They run analysis for a range of different markets, setting out trends and proving deep insight into your specific niche.
When considering each point of PESTLE, here are initial areas to explore:
Political: may include factors such as government policies, regulations, and political instability, which can affect the availability of resources, access to markets, and the overall operating environment your business.
Economic: may include the state of the economy, interest rates, inflation, and exchange rates, which can impact your business's ability to access funds and its ability to sell products or services at a profit.
Social: may include the population's demographic characteristics, cultural values, and societal attitudes towards your business and its products or services.
Technological: may include the availability and adoption of new technologies, which can impact your business's ability to innovate and stay competitive.
Legal: may include compliance with regulations and laws, as well as potential legal challenges or liabilities that your business may face.
Environmental: may include the physical environment, climate change, and sustainability, which can affect your business's operations and reputation.
How do you use a PESTLE analysis?
To use a PESTLE analysis effectively, businesses should conduct regular assessments to identify potential changes in the external environment and how they may impact your business. This can help you stay ahead of potential challenges and opportunities, and make informed decisions to adapt to a changing environment as well as putting you one step ahead of your competitors.
PESTLE analysis can be used alongside SWOT analysis, to provide a comprehensive, 360 view of your business's external as well as the internal environment and its potential impacts. PESTLE and SWOT analysis can be used to identify potential opportunities and threats. You can then use this information to inform decision-making by understanding the broader context that your organisation operates in, which will put you ahead of your competition make you better prepared to respond to changes in the business environment, take advantage of any opportunities, and formulate robust marketing plans for the coming days, months and year ahead.