SWOT ANALYSIS

• SWOT and PESTEL are analytical tools that help identify the key
external and internal factors that should be taken into account in
order to achieve success in a project or initiative.
• They are usually used together, and are applied in a group setting to
support effective strategic planning, decision-making and action
planning.
• SWOT and PESTEL are cost- and time-efficient means for highlighting
key issues relating to the context of a project or initiative which, if not
identified and addressed, could critically affect the chances of
success.
SWOT ANALYSIS
• SWOT analysis is generally used for business planning and
organizational strategy building.
• From finance perspective, it helps in understanding the qualitative
aspects.
• SWOT
• Strength- competitive edge over the competitors. Innovation that
cannot be copied…… internal factor
• Weakness- Puts company at a disadvantageous position as compared
to peers. Lack of efficacy of capital. Internal factor.
• Opportunities- Aspects or changes in the environment that the
company can exploit for its advantage. Policy changes affecting the
company positively. External factor

• Threats- Factors which have a potential to negatively impact the

company. Floods can have an adverse impact on agro- producing
companies. External factor.
Tt is recommended instead to first examine the external factors –
opportunities and threats – and then proceed to the internal ones.
This helps keep a stronger focus on results, and helps you identify
which threats are ‘critical threats’ (i.e.) those that are compounded by
corresponding weaknesses) and which opportunities are promising
opportunities’ (i.e. those that are matched by corresponding
strengths).
 Questions to be asked for each aspect of SWOT
STRENGTHS
• What advantages does your company have
• What do you do better than anyone else
• What low cost resources do you draw that others can’t or don’t
• What is your USP

WEAKNESS
• What can you improve
• What can you avoid
• What do customers likely see as your weakness
• What factors cause a fall in sales
• OPPORTUNITIES
• What opportunities are you aware of
• Changes in technology related to your industry
• Changes in govt policy related to your industry
• Changes in demographics, population, life style changes

THREATS
• What obstacles do you face
• Is competition threatening the market share
• Are quality standards changing rapidly
• Are there any bad debts or cash flow problems
• Can any of your weaknesses threaten your business
 PESTEL ANALYSIS
• PESTEL, a complementary tool to SWOT, expands on the analysis of external
context by looking in detail at specific types of issues that frequently have an
impact on implementation of project/ initiatives.
• The term ‘PESTEL’ refers to the domains it considers: Political, Economic,
Social, Technological, Environmental and Legal.
• PESTEL involves identifying the factors in each of these six domains that are
relevant for the project being considered.
• A special focus of PESTEL is identifying trends.
• Thus it is helpful for thinking proactively and anticipating change, rather
than being overtaken by it.
 PESTEL
• POLITICAL- These relate to policies identified by the govt wrt taxation,
foreign trade, environment and labor laws.
• Eg- Govt has a high intervention in education, healthcare and
infrastructure sectors. Prices of many drugs are regulated.

• ECONOMIC- These relate to GDP, Interest rate, Inflation, exchange rates,

disposable income etc.
• Eg- Impact of increase in interest rates on economy

• SOCIAL- Demographics, health, std of living.

• Eg- demand for smart phones, two wheelers, day care, beauty care
• TECHNOLOGY- Takes into account automation, innovation, research and
development.
• Eg- Reliance Jio.

• ENVIRONMENTAL- Seasonality, pollution, availability of resources and

their utilization.

• LEGAL- related to labors, environment, operations of the business or any

other aspect.
PESTEL OF BANKING INDUSTRY
• POLITICAL
• PMJDY
• Digital India Campaign- wallets, debit and credit cards, internet banking.

• ECONOMIC FACTORS
• Increase or decrease in interest rates during the monetary policy

• SOCIAL
• Increase in literacy rate, investments in the stock market, adoption of
new technologies- internet banking
• TECHNOLOGICAL
Use of AI- HDFC bank uses AI called humanoid to answer the queries, chat
box, SMS and Mobile banking.
Blockchain- ICICI bank first to use it for international trade transactions

• ENVIRONMENTAL
• Do not cause environmental hazards. But could be affected by e-waste.

• LEGAL
• IT Act, Corporate Governance disclosures, Whistleblowing, RBI Act