SWOT and PEST: What are they, and why do they matter?

accountingcpd

10 Jan 202201:54

Summary

TLDRThis video script introduces various analytical tools for organizations to identify opportunities and threats in the business environment. PEST analysis covers Political, Economic, Social, and Technological factors, while expanded versions like PESTLE, STEEPLED, PESTLIED, and LONGPESTLE add Legal, Environmental, Ethical, Demographic, and international considerations. Complementing these is the SWOT analysis, focusing on internal strengths and weaknesses alongside external opportunities and threats. The script emphasizes the importance of selecting the right tool for organizational needs and staying informed about global trends for smooth operations.

Takeaways

📈 PEST analysis is a strategic tool to identify opportunities and threats in the business environment, focusing on Political, Economic, Social, and Technology factors.
🔍 Additional factors can be included in PEST analysis, such as Legal and Environmental in PESTLE, Ethical and Demographic in STEEPLED, and international factors in PESTLIED.
🌐 LONGPESTLE extends the analysis to consider local, national, and global perspectives separately from the main factors.
🔑 SWOT analysis complements PEST by focusing on Strengths, Weaknesses, Opportunities, and Threats at a more business or product-specific level.
🛠 Both PEST and SWOT are essential tools for organizations to scan the business environment and adapt to changes effectively.
🌟 The choice of analysis tool should be tailored to the specific needs and context of the organization.
🌍 Keeping an eye on global trends is crucial for smooth operations and strategic planning within an organization.
👍 The video encourages viewer engagement by asking for likes and suggestions for future content.
📺 The next video in the series will focus on political trends, indicating a series approach to covering different aspects of the business environment.
💻 The script suggests that understanding and adapting to the wider business environment can lead to exciting opportunities for an organization.
📝 The video serves as an educational resource, explaining acronyms and their significance in strategic business analysis.

Q & A

What does PEST analysis stand for?
-PEST analysis stands for Political, Economic, Social, and Technology analysis, which helps organizations identify opportunities and threats in the wider business environment.
What is the purpose of conducting a PEST analysis?
-The purpose of conducting a PEST analysis is to examine the political, economic, social, and technological factors affecting an organization to determine strategic actions that may be needed.
What are some variations of the PEST analysis tool?
-Variations of the PEST analysis tool include PESTLE (adding Legal and Environmental factors), STEEPLED (adding Ethical and Demographic factors), PESTLIED (adding international factors), and LONGPESTLE (considering local, national, and global factors separately).
How does PESTLE differ from PEST analysis?
-PESTLE differs from PEST analysis by including Legal and Environmental factors, providing a more comprehensive view of the external factors that can impact an organization.
What does STEEPLED analysis add to the PEST analysis framework?
-STEEPLED analysis adds Ethical and Demographic factors to the PEST framework, offering a more detailed examination of societal and ethical issues that may affect an organization.
What is the focus of PESTLIED analysis?
-PESTLIED analysis focuses on factors that are specifically international, allowing organizations to better understand and navigate global business environments.
How does LONGPESTLE analysis differ from other PEST variations?
-LONGPESTLE analysis differs by considering local, national, and global considerations separately from the main factors, providing a more nuanced understanding of the different levels of environmental impact.
What is SWOT analysis, and how does it complement PEST analysis?
-SWOT analysis stands for Strengths, Weaknesses, Opportunities, and Threats. It complements PEST analysis by offering a more focused tool for examining internal factors and strategic opportunities at a business or product level.
What is the main takeaway from the video script regarding the choice of analysis tool for an organization?
-The main takeaway is that organizations should choose the analysis tool that is most appropriate for their specific needs, whether it's PEST, PESTLE, STEEPLED, PESTLIED, LONGPESTLE, or SWOT, to effectively identify opportunities and threats.
What does the acronym SWOT stand for, and what does it focus on?
-SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It focuses on both internal factors (Strengths and Weaknesses) and external factors (Opportunities and Threats) affecting an organization.
How can organizations benefit from scanning the business environment and keeping an eye on global trends?
-Organizations can benefit by gaining insights into emerging opportunities and potential threats, which can help them make informed strategic decisions and adapt to changes in the business landscape more effectively.
What is the next video in the series about, according to the script?
-The next video in the series is about political trends and their impact on the business environment.

Outlines

00:00

📈 Environmental Analysis Tools Overview

This paragraph introduces the concept of environmental analysis for organizations, highlighting the importance of identifying opportunities and threats in the business environment. It explains the PEST analysis, which stands for Political, Economic, Social, and Technology factors, and its purpose to analyze societal trends for strategic decision-making. The paragraph also mentions expanded versions of the PEST analysis, such as PESTLE (including Legal and Environmental factors), STEEPLED (adding Ethical and Demographic factors), PESTLIED (focusing on international factors), and LONGPESTLE (considering local, national, and global perspectives). Additionally, it contrasts PEST with SWOT analysis, which stands for Strengths, Weaknesses, Opportunities, and Threats, and is used for a more focused business or product-level assessment. The paragraph concludes by emphasizing the importance of choosing the right tool for an organization and encourages viewers to engage with the content through likes and comments.

Mindmap

Keywords

💡PEST analysis

PEST analysis is a strategic tool used by organizations to assess external factors that could impact their business. It stands for Political, Economic, Social, and Technological factors. In the video, PEST analysis is presented as a method to identify opportunities and threats within the wider business environment, which is essential for strategic planning and decision-making.

💡PESTLE

PESTLE is an expanded version of the PEST analysis, which includes additional factors of Legal and Environmental considerations. It provides a more comprehensive view of the external environment. The script mentions PESTLE as an alternative tool for organizations that need to consider legal regulations and environmental impacts alongside the traditional PEST factors.

💡STEEPLED

STEEPLED is an acronym that encompasses Ethical and Demographic factors in addition to the standard PESTLE analysis. It broadens the scope of analysis to include ethical considerations and demographic trends, which can be crucial for businesses operating in diverse or ethically sensitive markets, as mentioned in the script.

💡PESTLIED

PESTLIED is a variation of the PEST analysis that specifically includes factors relevant to international business, such as trade regulations, cultural differences, and international economic conditions. The script introduces PESTLIED as a tool for organizations that need to focus on the international aspects of their business environment.

💡LONGPESTLE

LONGPESTLE is a strategic tool that considers local, national, and global factors separately from the main PESTLE analysis. It allows organizations to gain a nuanced understanding of how different levels of geography can affect their business. The video script mentions LONGPESTLE as a way to look at the business environment from various geographical perspectives.

💡SWOT analysis

SWOT analysis is a strategic planning technique used to identify an organization's Strengths, Weaknesses, Opportunities, and Threats. Unlike PEST and its variants, which focus on external factors, SWOT analysis includes internal factors as well. The video script suggests SWOT as a complementary tool to PEST for a more focused internal and external analysis.

💡Strategic actions

Strategic actions refer to the decisions and initiatives an organization takes in response to the opportunities and threats identified through environmental analysis. In the context of the video, strategic actions are the steps organizations need to consider after conducting a PEST or related analysis to align with the changing business environment.

💡Business environment

The business environment encompasses all external and internal factors that can affect an organization's operations and performance. The video script discusses the importance of scanning and understanding the business environment to identify opportunities and threats for the organization.

💡Global trends

Global trends refer to widespread patterns or changes that can influence businesses worldwide. In the script, global trends are highlighted as an important aspect of the business environment that organizations should monitor to stay competitive and adapt to changes.

💡Organizational strategy

Organizational strategy is the long-term plan that an organization develops to achieve its goals and objectives. The video script emphasizes the role of environmental analysis tools like PEST and SWOT in shaping an organization's strategy by identifying key factors that can impact its performance.

💡Complimentary tools

Complimentary tools in the context of the video refer to different analytical methods that can be used together to provide a more holistic view of an organization's situation. SWOT analysis is presented as a complimentary tool to PEST, allowing for a more comprehensive understanding of both external and internal factors.

Highlights

Changes in the business environment can create opportunities and threats.

PEST analysis helps identify opportunities and threats.

PEST stands for Political, Economic, Social, Technology.

PEST analysis involves examining each area to determine strategic actions.

PEST is one of many tools for monitoring the bigger picture.

PESTLE includes Legal and Environmental factors.

STEEPLED adds Ethical and Demographic factors.

PESTLIED focuses on international factors.

LONGPESTLE looks at local, national, and global considerations.

SWOT analysis complements PEST by focusing on business or product level.

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

Choose the tool most appropriate for your organization.

Scanning the business environment is crucial for smooth operations.

The video series continues with a focus on political trends.

Encouragement to like the video and subscribe for new content.

Invitation for viewers to suggest topics for future videos.

Thanks for watching and engagement invitation.