Item No.

4 in Rubrics (Allocation of Marks)

Application of SWOT, PESTLE & Porters Five Forces: A Guide

How do you use SWOT, PEST, and Porter's Five Forces frameworks to analyze your competitive
environment?

As a consultant, you need to understand the competitive environment of your clients and their
industries. This can help you identify their strengths, weaknesses, opportunities, and threats, as well
as the external factors that affect their performance and strategy. In this article, we will show you
how to use three popular frameworks to conduct a comprehensive competitive analysis and

benchmarking : SWOT, PEST, and Porter's Five Forces.

SWOT analysis

SWOT stands for strengths, weaknesses, opportunities, and threats. It is a simple but powerful tool
to assess the internal and external factors that influence your client's business. To conduct a SWOT
analysis, you need to ask four questions: What are your client's strengths that give them a
competitive edge? What are their weaknesses that limit their potential? What are the opportunities
that they can exploit in the market? What are the threats that they face from competitors,
customers, or regulators? By answering these questions, you can create a matrix that summarizes
your client's situation and helps you formulate recommendations.

PEST analysis

PEST stands for political, economic, social, and technological. It is a framework that helps you
analyze the macro-environmental factors that affect your client's industry and market. To conduct a
PEST analysis, you need to consider how each of these factors impacts your client's business, both
positively and negatively. For example, how do political stability, regulations, taxes, trade policies,
and elections affect your client's operations and profitability? How do economic growth, inflation,
interest rates, exchange rates, and consumer demand affect your client's sales and costs? How do
social trends, demographics, values, lifestyles, and preferences affect your client's products and
services? How do technological innovations, disruptions, developments, and adoption affect your
client's capabilities and competitiveness?

Porter's Five Forces

Porter's Five Forces is a framework that helps you evaluate the competitive intensity and
attractiveness of your client's industry. It consists of five forces that shape the industry structure and
determine the profitability of the firms in it: rivalry among existing competitors, threat of new
entrants, threat of substitute products or services, bargaining power of buyers, and bargaining
power of suppliers. To conduct a Porter's Five Forces analysis, you need to assess how strong each of
these forces is in your client's industry and how they affect your client's position and strategy. For
example, how many and how aggressive are your client's competitors? How easy or difficult is it for
new entrants to enter the industry? How likely are customers to switch to alternative products or
services? How much influence do customers and suppliers have over prices and terms?
Using these three frameworks, you can conduct a comprehensive competitive analysis and
benchmarking for your client. You can compare your client's performance, capabilities, and strategy
with their competitors and industry standards. You can also identify the key drivers, challenges, and
opportunities for your client's business. This can help you provide valuable insights and
recommendations to your client and help them achieve their goals.