SWOT Analysis and PEST Analysis –

When to Use Them

Updated on: 19 August 2020

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.

You can easily create SWOT diagrams using our diagramming tool. Or you

can use our SWOT analysis templates to get started instantly.

Click here for more SWOT analysis templates by Creately >>

 One of many SWOT analysis templates available at Creately ( click to use at template )

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.
 PEST analysis template available at Creately ( click to use as template )

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.

It is best practice to do the PEST analysis and include the results in 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.