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Strategic Planning Concepts Analysis: PEST and SWOT Analyzes

PEST Analysis

The Essence of the Strategy

PEST is a sort of convenient and simple method for analysis of the macroenvironment of a business structure. The method is applied to examine the market and recent trends in an industry. Various factors constantly influence the organization producing cosmetics, so this approach would be appropriate for such a company. Moreover, it can be used to recognize different threats and opportunities for a company. PEST analysis is considered long-term strategic planning that is drawn up three to five years in advance, with yearly data updates (Christodoulou & Cullinane, 2018). The analysis can be appeared in the form of a four-squared matrix or in a tabular form.

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Factors to Consider

PEST analysis stands for the following industry indicators: political (P), economic (E), socio-cultural (S), and technological (T). During the analysis of the political and legal environment of a particular business structure or country, it is crucial to evaluate aspects regarding stability and legal regulation adjustments. Assesses an entity and whether the novelties in the legality will influence its activities, primarily ​​business profitability. Economic factors are determinants of the business’s financial situation; socio-cultural factors assess the impact of mentalities, demographic changes, and diversity in preferences on the market condition. Politics affect the cosmetics business less, but it is essential to evaluate the customer’s attitude, the general market situation, competitors, and the technologies available for its successful operation.

Important Details

In the long term, the assessment of the factors of the company provides an opportunity to use the obtained data when making a strategy. However, outside of additional research, PEST analysis alone is not enough (Cox, 2020). If a company sells its goods in different geographic markets and operates in various industries, it is recommended to conduct a PEST analysis for each sector. The analyzed firm operates on the territory of several countries, and the range of goods produced also varies, so the use of this method will be effective.

SWOT Analysis

The Essence of the Strategy

SWOT analysis is a sort of strategic planning that describes the company’s condition related to its internal and external environment. The abbreviation “SWOT” consists of strengths, weaknesses, opportunities, and threats. The main advantage of this method of analysis is a wide range study of the company, competitors, and the market (Shtal et al., 2018). Having identified all the critical aspects of the activity, it will be much easier for the heads of the cosmetic company to understand in which direction to develop and what risks need to be avoided.

Factors to Consider

Strengths and weaknesses of a company are identified via recognizing the internal state of affairs of the company. In contrast, opportunity and threat categories are driven by external factors that should be taken into account when making the next business plan. Strengths and opportunities provide positive information on the development of a business structure at the current stage. Such information contributes to the accomplishment of goals and setting new ones. Weaknesses and threats include negative aspects of the company that show limitations of the company. For any company whose goal is mainly to make a profit, it is essential to prevent processes that stop its success timely.

Important Details

Conducting a SWOT analysis is helpful for any company, regardless of the field of activity and the current state of the competitive environment. However, it is essential to understand that SWOT analysis is not an action guide – it is necessary to additionally use data from a more detailed analysis to build a business strategy (Budiman et al., 2018). A thorough assessment of internal and external factors can prevent a decline in the development of a cosmetic company.


Budiman, I., Tarigan, U., Mardhatillah, A., Sembiring, A., & Teddy, W. (2018). Developing business strategies using SWOT analysis in a color crackers industry. Journal of Physics: Conference Series, 1007(1), 1-7. Web.

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Christodoulou, A., & Cullinane, K. (2019). Identifying the main opportunities and challenges from the implementation of a port energy management system: A SWOT/PESTLE analysis. Sustainability, 11(21), 1-15. Web.

Cox, J. (2020). The higher education environment driving academic library strategy: A political, economic, social and technological (PEST) analysis. The Journal of Academic Librarianship, 47, 1-11. Web.

Shtal, T., Buriak, M & Amirbekuly, E., Ukubassova, G., Kaskin, T., & Toiboldinova, Z. (2018). Methods of analysis of the external environment of business activities. Espacios, 39(12), 22-30.

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