What's the difference between SWOT and PESTEL analysis?

SWOT and PESTEL are both situational analyses used in business and marketing strategy.

Key differences

1. Scope of Insights:
   • SWOT deals with internal and external insights.
   • PESTEL deals with external factors only.
2. Categorisation of Insights
   • SWOT separates external insights into positives (Opportunities) and negatives (Threats).
   • PESTEL categorises external factors as being either Political, Economic, Social, Technological, Environmental or Legal/Legislative.

Which one should you use and when?

As such, the two frameworks are partly overlapping and partly complementary. That is, you can use either or both, depending on what you are trying to achieve.

One sound approach is:

1. Start with the PESTEL analysis to get a detailed understanding of the external trends the organisation faces.
2. Transfer the key external trends to the SWOT analysis, characterising each as having positive (Opportunity) or negative (Threat) consequences for the organisation (if it does nothing in response).
3. Identify the organisation's Strengths and Weaknesses relative to its ability to respond to those Threats and Opportunities, completing the SWOT.

Learn More

You can read more about each at:

• How to do PESTEL Analysis (with examples, template and AI)
• How to do a SWOT Analysis: with Examples, a Template and AI
• Why You Should Start Your Strategy with a PESTEL Analysis