PEST vs. SWOT Analysis: What’s the Difference?

PEST analysis refers to Political, Economical, Social, and Technological factors which influence the business environment. SWOT analysis refers to Strengths, Weaknesses, Opportunity and Threats. These factors are prime determinants of strategic planning.

A SWOT analysis is a straightforward process that aids in analyzing the potential threats, opportunities, and weaknesses of your business or project. This exercise will help you develop a strategy, concentrate on your strengths, strengthen your weaknesses, seize opportunities, and gain an advantage over any threats that may arise.

How to Conduct Swot and Pestle Analysis | Talent and Skills HuB

What is a SWOT analysis?

When conducting a SWOT analysis as part of a strategic planning process, the main aspects of a business are assessed. Business leaders can use this framework to determine whether ideas, products, and services could be profitable in the current market. The acronym stands for strengths, weaknesses, opportunities and threats. Heres a description of each aspect:

SWOT analysis is helpful for evaluating how a business is currently doing and for developing strategies to safeguard resources, resolve problems, and avert unforeseen circumstances. Depending on the business structure and public events, many companies regularly conduct these assessments once a month, once every three months, or once every year. By beginning this type of strategic planning, businesses can get ready to accomplish certain objectives and advance the company mission.

What is a PEST analysis?

When conducting strategic planning, a PEST analysis is a way to evaluate the external environment surrounding a business. Business leaders can forecast whether the market will be favorable to their brand, products, and services by using this framework. The acronym stands for environmental political, economic, social, and technological factors. Heres a description of each factor:

Despite the interdependence of political, economic, social, and technological factors, it can be useful to divide market research into these definite categories. PEST analysis is useful for assessing the state of the market in order to predict the response that a business might receive and ensure revenue and profits. Because external factors can change over time, businesses frequently carry out this kind of analysis each month, quarter, or year. Planning in this manner aids companies in getting ready for the future and maximizing their potential.

PEST vs. SWOT analysis

Firm leaders may decide to use both PEST and SWOT analysis in their investigation, planning, and discussion activities to create a thorough assessment of both internal and external factors. Here are three key differences between these two frameworks:


PEST analysis focuses on external factors in public society. These are variables that are constantly shifting and frequently beyond the control of the business. When a company wants to stay current with technological advancements, social trends, economic conditions, and governmental policies, this kind of analysis is useful.

SWOT analysis, in contrast, partially examines internal business factors such as strengths and weaknesses. Businesses can comprehend their own position and advantage within the larger public sphere by using this type of assessment. They can assess “Opportunity” and “Threats” or risks to measure external factors and consumer markets.

Usability to investors

For managers, team members, and internal stakeholders, PEST analysis is beneficial. A company can support employee productivity and well-being, remain relevant, and keep customers by adapting to external conditions. However, SWOT analysis can be more helpful when dealing with investors. This is so that the framework’s key points about the company’s internal operations can be clearly seen.

Investors who are considering funding a business typically want to know about the specific business model, management system, plan, and goals rather than learning about external factors like politics and technology. Business founders and leaders can make compelling pitches to investors to raise capital by conducting a SWOT analysis and discussing the strengths, weaknesses, feasibility, and profitability of the business.

Consideration of weaknesses

In many instances, managers can make significant, long-lasting improvements by looking into a company’s weaknesses. Process, training, task delegation, and other areas can all benefit from improved business strategies and practices, which can boost success and employee morale. SWOT analysis encourages leaders to assess and address weaknesses, whereas PEST analysis highlights forces outside of a business. This has numerous advantages for managers, team members, and clients.


What is the difference between a PEST and a SWOT analysis?

A PEST analysis evaluates market trends and changes, whereas a SWOT analysis evaluates a business unit. A subjective assessment of the company’s information is used to create a SWOT analysis, which is then arranged logically to aid in understanding, presentation, discussion, and decision-making.

Is PEST better than SWOT?

A PEST analysis is designed to be simple. It is outward-looking but neglects to take into account internal factors, which may have a greater impact on the health of the company. A more thorough examination of the internal and external factors affecting your business is provided by the SWOT analysis.

What are the similarities between the SWOT analysis and the PEST analysis?

SWOT and PEST analyses are comparable in that they both concentrate on environmental factors that could have an impact on a company. Both analyses identify environmental factors by using group brainstorming.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *