Session 1 - PESTAL vs SWOT Flashcards
What is the difference between PESTAL and SWOT?
PESTAL is a model for strategic planning where else, SWOT is an analytical framework.
Political Factors?
How does it effect a business?
What do we need to know?
Taxation policy, Government Stability and also Foreign trade regulations.
Addition or Removal of Legislation - It can pose strategic threats or opportunities.
Identify the impact or affect on strategy. (Taxation)
Economic Factors?
How does it effect a business?
What do we need to know?
Interest rates, inflation, economic growth, business cycles, unemployment etc.
Organization needs to know how different interest rates and inflation in different counties they operate in affects the strategy.
Cultural Factors?
Age of population, birth rates, death rates, lifestyle changes.
Increase in life and decline in birth rate increases aging population. It affects market segmentation.
Technological Factors?
The method of retailing or the changes in production methods.
Understanding how technology is maturing right now and what trends affect the industry can be important.
Environment Factors?
How a product and product waste can be effectively recycled.
Are we adhering to environmental legislation. New product ideas that can be favorable to the environment.
Why is PESTAL not affective?
Even though, it highlights the growth and changes in an industry. It does not mean that a firm will be able to always make profits in the industry. Hence, the Porter’s 5 sources came into existance.
