What are SWOT and PEST Analyses?
SWOT Analysis – Strengths, Weaknesses, Opportunities, and Threats/PEST Analysis – Politics, Economics, Socio-Culture, and Technology
In both Smith and Williams, we learned about SWOT analysis. In our other readings, we also looked at PEST Analysis.
Smith, on Pages 47 – 49, refers to the following players who are external to an organization:
- Advocates – you stand in the way of their goal
- Dissident – opposition to positions you hold or actions you have taken
- Anti – a dissident on a global scale
- Activist – similar to anti (is also seeking change) but tactics go beyond discussion
- Missionary – self-righteous activist
- Zealot – single-issue activist with a missionary fervor
- Fanatic – a zealot without any social stabilizers.
Williams, however, was more concerned with how to apply SWOT internally, particularly with reference to communications. For Williams, it’s more about looking at company goals and objectives, or at specific internal and external issues.
Then the question is about the second step of SWOT analysis, which is to apply it to how to communicate that.
E. g. if a company is applying an analysis to its overhead, its strength might be in owning a building, its weakness might be that the building is in an area that is in transition and losing its cachet, that could potentially also be an opportunity, but the threat could be that customers would not visit the building in person if they felt the neighborhood was unsafe.
Communicating those findings presents the strength of being able to quickly pinpoint the issue. It adds the weakness of perhaps not being able to act decisively until external factors play out some more. And there’s opportunity in the form of investing in an area where rents are suddenly taking a nosedive.
Whereas the threat could be that too much investment in a possibly dying area might hurt the company’s reputation.
Applicability to Current Events
The more I read about SWOT and PEST analyses, the more I realized they can apply to pretty much anything. I decided to take a look at Quinnipiac in the context of the White House’s College Scorecard, which was released on September 12th, and is thereby current although not really an ‘event’, per se.
The scorecard puts together basic data on various collegiate characteristics, including size, location, and the programs on offer. Then the program pulls out colleges and compares them. I looked up Connecticut four-year-programs and found Quinnipiac is third-best for salary after graduation.
The program could potentially be the subject of a SWOT analysis, that Quinnipiac shows strength in how its graduates earn after they leave, but a weakness in terms of price, as it lists QU as third-most expensive.
Opportunities include showcasing the school as coming up better than U Conn for salary after graduation. Threats are from schools like Yale, which comes out as less expensive but with a far better graduation rate and a better salary after graduation.
The point of the exercise is that the data are mixed, as for a lot of organizations. If you dig deeply enough, most organizations will have something you can place into each of the four buckets. No organization is perfect and without threats or weaknesses.
As for a PEST analysis (politics, economics, social-cultural, and technology), the scorecard remains applicable. Politics applies because of not only how the scorecard itself was put together (deciding what to emphasize could very well have been at least partially a political decision), but also because of how public institutions are funded.
Quinnipiac is a private institution, but there can still be an affect if public universities are funded (or not) due to political dealings. This can determine whether public institutions can compete effectively with Quinnipiac.
Economics certainly applies in terms of budgeting but also due to financial decisions such as how much to charge for tuition and what to pay professors – and whether to offer more expensive full professorships or instead pay adjuncts. The social-cultural part applies as Quinnipiac is a part of Hamden itself. How the school conducts itself makes a difference in the fuller community.
Is the campus safe? Does it recycle? Are the students loud? Finally, the technological aspect applies as the school cannot adequately function without working, up to date technology. Even for students who go to the campus and attend classes in person, there is a dependence on technology for everything from interlibrary loans to how tuition is calculated and collected.
Internal versus External Environments for SWOT and PEST Analyses
I see the two as being equally important to analyze and research as an organization can feel an affect either way. For the ILSC, for example, because part of their work is done in Ghana, external threats include the possibility that the government of Ghana might not be as stable as believed.
Internal weaknesses include the fact that the organization’s website doesn’t seem to have a setup for regular updating. Both can affect the very existence of the organization. A strategic planner should be researching both kinds of problems (and positives as well) as they can decide the fate of an organization.
Organizations looking to thrive – or at least to stay in business – need to look at both. No one can afford to ignore external in favor of internal, or vice versa. And no organization can afford to ignore PEST and SWOT analyses.