PESTLE-SWOT refers to the combination of the PESTLE (Political, Economic, Social, Technological, Legal and Environmental) and SWOT (Strengths, Weaknesses, Opportunities and Threats) analyses. The PESTLE analysis should be used to provide a context for the organisation’s/individual’s role in relation to the external environment. It covers Political, Economic, Social, Technological, Legal and Environmental factors. Depending on which elements are included it can also be referred to as STEP, STEEP, PESTEL, PESTLE or LEPEST. Recently it was even further extended to STEEPLE and STEEPLED, including education and demographics.
The process underpins many other analytical techniques, such as scenario planning. The factors can be at macro (e.g. World-, EU- or UK-wide) or micro (e.g. institutional or individual) level.
Process of tool application
Depending on the scope and scale of the exercise being undertaken, you may want to consider for each factor: Which of the below are of most importance now? Which are likely to be most important in a few years? What are the factors influencing any changes?
- Political: What are the key political drivers of relevance?
- Economic: What are the important economic factors?
- Social: What are the main societal and cultural aspects?
- Technological: What are current technology imperatives, changes and innovations?
- Legal: Current and impending legislation affecting the role
- Environmental: What are the environmental considerations, locally and further afield?
You will tend to find a lot of crossover – for example policies under political factors leading to legal and environmental factors. You do not need to worry too much about pigeon-holing issues into the right category – the framework simply helps you think about the context as a whole. Now you have the PESTLE context you can use this output to map out a SWOT analysis.
A traditional SWOT analysis would take the context of the PESTLE and analyse how these factors may emerge/impact. This may be an interesting exercise but often doesn’t lead to anything apart from four lists that are filed away and forgotten. A SWOT analysis should be a useful tool for planning and marketing strategy. Identify your strengths and weaknesses first because they may suggest some of the opportunities and threats later.
A better way to map this output more directly into a project plan and/or strategy is to use a 3×3 grid, arranging your strengths, weaknesses, opportunities and threats in the labelled boxes. Then come up with some ‘mini strategies’ in the four boxes in the bottom right corner of the matrix, addressing the questions outlined. Having done this you can use the top left box to either translate the strategies into a task list for a project plan or come up with a strategy or mission statement for whatever topic was the subject of the SWOT analysis.
The combination of these tools is used to find out the current status and position of an organisation or individual in relation to their external environment and current role. They can then be used as a basis for future planning and strategic management.