Oftentimes, SWOT and PEST analysis are the two methodologies in strategic planning that are often model baju batik kantor. It is perhaps mainly because that both analyses focus on the environmental factors that affects the company, particularly in profitability. Before you will be able to comprehend the similarities and distinctions between SWOT and PEST analyses, you must know 1st how each framework works separately.
First of all, SWOT and PEST possess meanings, which can be obvious to their acronym. Let us start with the SWOT Analysis first.
The SWOT Analysis is thought as a strategic planning technique that assesses the inner and external factors of the company. The acronym means Strengths, Weaknesses, Possibilities and Threats. The internal factors are everything regarding the companys and weaknesses, which fundamentally sum up what they can handle and their weak points. On the other hand, the external factors will be the opportunities and threats that may face the organization because they go for their target marketplace.
SWOT and PEST analyses are virtually the same, only that PEST Analysis, on the other hand assesses the Political, Economical, Social and Technological factors that may affect the company. This assessment is mostly focused on the external factors.
With the given definitions, it really is safe to say that SWOT and PEST analyses both carry out the same assessment but remember that PEST Analysis focuses on environmental attributes that may affect the business directly. Of course, external factors affect the company straightly as well like tariffs and competitions but in the event that you will look closely on both SWOT and PEST analyses, you will notice the obvious difference in assessment focus.
If SWOT analyses targets things that might affect a company directly, PEST Analyses focuses on the external factors that might have an impact on the business. These impacts could be government changes, fashion trends, popular opinion, weather and calamities and the loves.
To simplify it, the obvious difference between SWOT and PEST analyses is definitely that, PEST Analysis requires a good look on a nationwide and global level, while SWOT simply looks on a specific company level. A lot of strategic planning strategies are developed because occasionally, the factors that may affect an organization may seem not noticeable. In conducting the various analyses, brainstorming is usually the key, as what one individual sees may not be seen by others. It is strongly suggested that SWOT and PEST analyses are mixed when performing the strategic preparing process because by looking at a companys affecting factors using two frameworks, all the attributes will then be easier to see and the organization will be able to determine the underlying things that could either make or break them within their target marketplace.
Always remember, that there is a sequence in using SWOT and PEST analyses. It is recommended that organizations conduct a PEST Evaluation for before any other strategic planning methodology. Right after conducting PEST, the organization can then proceed into performing a SWOT Evaluation. Once both analyses are done, it would be best if you include other strategic planning methods too like Porters five processes and the likes.