Speaker 1: How to conduct SWOT and PESL analysis. What is SWOT analysis? A SWOT analysis is a tool for documenting internal strengths S and weaknesses W in your business as well as external opportunities O and threats T. You can apply SWOT analysis to the elements of your organization to understand their impacts on the business operations strategy and decision making. You can use the information obtained from your SWOT analysis to plan your business and achieve your goals. How to conduct SWOT analysis? Use the following steps to conduct a SWOT analysis of your organization. Step 1. Research about the business, industry and market. Before you begin the SWOT analysis you need to do some research to understand your business, industry and market. Get a range of perspectives by talking to your staff, business partners and clients. Also conduct some market research and find out about your competitors. Step 2. List the business's strengths. The first step is to identify and list what you think your business's strengths. Examples could include strengths relating to employees, financial resources, your business location, cost advantages and competitiveness. Step 3. List the business's weaknesses. List things in your business that you consider to be weaknesses i.e. that put your business at a disadvantage to others. Weaknesses could include an absence of new products or clients, staff absenteeism, a lack of intellectual property, declining market share and distance to market. Make sure you address the weaknesses raised in your SWOT analysis. The list of weaknesses can indicate how your business has grown over time. If you review the SWOT analysis after a year you may notice that your weaknesses have been resolved. While you may find new weaknesses the fact that the old ones are gone is a sign of progress. Step 4. List potential opportunities for the business. Think about the possible external opportunities for the business. These are not the same as your internal strengths and are not necessarily definite. An opportunity for one aspect of the business could be a threat to another e.g. you may consider introducing a new product to keep up with consumer trends but the competitors may already have a similar product. In the SWOT analysis an item shouldn't be listed as both an opportunity and a threat. Opportunities could include new technology, training programs, partnerships, a diverse marketplace and a change of government. Step 5. List potential threats to the business. List external factors that could be a threat or cause a problem for your business. Examples of threats could include rising unemployment, increasing competition, higher interest rates and the uncertainty of global markets. Step 6. Develop a strategy to address issues in the SWOT. Review the SWOT by asking. 1. How can you use the strengths to take advantage of the opportunities identified? 2. How can you use the strengths to overcome the threats identified? 3. What do you need to do to overcome the identified weaknesses in order to take advantage of the opportunities? 4. How will you minimize the weaknesses and overcome avoid the identified threats? The answers to these questions will enable you to develop the strategies for achieving your business goals objectives. Example of SWOT analysis. Strengths. 1. Excellent sales staff with strong knowledge of existing products. 2. Good relationship with customers. 3. Good internal communications. 4. High traffic location. 5. Successful marketing strategies. 6. Reputation for innovation. Weaknesses. 1. Currently struggling to meet deadlines. 2. High rental costs. 3. Market research data may be out of date. 4. Cash flow problems. 5. Holding too much stock. 6. Poor record keeping. Opportunities. 1. Similar products on the market are not as reliable or are more expensive. 2. Loyal customers. 3. Product could be on the market for Christmas. 4. Customer demand, have asked sales staff for similar product. Threats. 1. Competitors have a similar product. 2. Competitors have launched a new advertising campaign. 4. Competitor opening shop nearby. 5. Downturn in economy may mean people are spending less. PESL analysis. PESL is an acronym that stands for Political, Economic, Social, Technology, Legislative, Legal and Environment. PESL analysis is an audit or external scan of an organization's environmental influences that helps guide the planning and strategic decision making. It is often referred to as providing a big picture of the environment in which a business operates. The assumption is that, if a business is able to audit its current environment and assess potential changes, it will be better placed than its competitors to respond to changes. Often, the analysis will determine likely issues, events that will impact the business. These are commonly considered to be outside the control of the organization. How to conduct PESL analysis. Step 1. List PESL factors for the business. You may need to brainstorm and have an expert knowledge of the business and or the world outside the business for this. Step 2. Identify the implications of each PESL factor on the business. Decide the implications of the external factors. Normally, this involves assessing their impact over time, short, medium and long term, impact by type, positive or negative effects, and impact by dynamics, i.e. the significance, importance of the implication increasing, decreasing, or remaining unchanged. Step 3. Rate the impact and likelihood. Rate the potential impact on the business, high, low, and the likelihood of it happening, low, high. Step 4. Further action. You can then develop strategies on how the business can manage the negative effects of each PESL factor or take advantage of the positive effects of the PESL factors. Also, you can develop, what if, scenarios that enables you to visualize different and alternative future options for the business. It will enable you to focus on the high frequency and high impact combinations of influences. For further support. A talent and skills hub, you can be supported by our instructors, academic skills advisors and mentors for SWOT and PESL analysis. You can book an appointment for one-to-one or group tutoring through our website, ts-hub.com. References and further reading. Business Queensland, 2020, conducting a SWOT analysis online. Gray, B, 2016, how to effectively conduct a PESL and SWOT analysis online.