Business Environments

Business Environments (2)

Reason to Use SWOT and PESTLE Analysis

by Neil Kokemuller, Demand Media

SWOT and PESTLE analyses cover a full range of internal and external strategic business considerations.

A main reason companies use both SWOT and PESTLE is because these tools offer broad and effective analyses of key areas of a strategic plan. SWOT is an acronym that stands for strengths, weaknesses, opportunities and threats. PESTLE has wider coverage of business and external issues, including political, economic, social, technological, legal and environmental factors. Small businesses can better compete by using these critical tools to assess opportunities and challenges.

What is Porter's Five Forces?

Michael Porter

The five forces model is an industry and business analysis development strategy. This framework was created by Michael E. Porter, a professor at Harvard Business School in 1979. His method determined that every industry and business is affected by five forces: barriers to entry, supplier power, threat of substitutes, buy power and rivalry. Porter's five forces model attempts to explain the different situations businesses may experience when operating in the economic market place. Each force includes specific elements companies must overcome or prepare for when conducting business operations.