Guide

Measure performance and set targets

SWOT, PESTLE and other models for strategic analysis

Business analysis models are useful tools and techniques that can help you understand your organisational environment and think more strategically about your business. Dozens of generic techniques are available, but some come to the forefront more frequently than others do. These include:

  • SWOT (strengths, weaknesses, opportunities, threats) analysis
  • PESTLE (political, economic, social, technological, legal and environmental) analysis
  • scenario planning
  • Porter's Five Forces framework

SWOT analysis

SWOT analysis is one of the most popular strategic analysis models. It involves looking at the strengths and weaknesses of your business' capabilities, and any opportunities and threats to your business.

Once you identify these, you can assess how to:

  • capitalise on your strengths
  • minimise the effects of your weaknesses
  • make the most of any opportunities
  • reduce the impact of any threats

See our SWOT analysis example.

A SWOT analysis gives you a better insight into your internal and external business environment. However, it does not always prioritise the results, which can lead to an improper strategic action.

One way to make better use of the SWOT framework is to consider the customer's perspective when making strategic plans and decisions. You can do this by applying importance-performance analysis (IPA) to identify SWOT based on customer satisfaction surveys.

Other strategic analysis tools

In addition to SWOT, other useful techniques include:

  • PESTLE analysis - a technique for understanding the various external influences on a business. See our PESTLE analysis example.
  • Scenario planning - a technique that builds various plausible views of possible futures for a business.
  • Critical success factor analysis - a technique to identify the areas in which a business must succeed in order to achieve its objectives.
  • The Five Forces - a framework for looking at the strength of five important factors that affect competition - potential entrants, existing competitors, buyers, suppliers and alternative products/services. Using this model, you can build a strategy to keep ahead of these influences.

Read more about strategic planning for business growth.