Literature review SWOT Analysis, Porter 5 Forces and the PESTEL


Literaturereview: SWOT Analysis, Porter5 Forces and the PESTEL Analysis



Marketersrequire intelligence to gather and assess external as well asinternal environment of an organization. SWOT analysis is aneffective tool that marketers can use to evaluate the strategicposition of the organization by analyzing its strengths, weaknesses,opportunities, and strengths (Ayub, 2013, p. 93). The primary goal ofconducting a SWOT analysis is to get a meaningful insight about thecompany’s key competencies, which is only achieved after evaluatingdata that has been gathered via marketing intelligence. However, itis recommended that SWOT analysis should be used together with othertools since it has several limitations, such as promotion ofsuperficial scanning and failure to accommodate trade-offs (Valentin,2005, p. 92). An effective SWOT analysis helps marketers identify thecompany strengths, determine methods of exploiting opportunities,develop measures of addressing weaknesses and prevent threats.

Porter’sFive Forces

ThePorter’s Five Forces is a tool that is widely used by marketers toperform strategic analysis. The framework of Porter’s Five Forcesis founded on the notion that the market structure influences thebehavior of all participants in the market (Jaradat, 2013, p. 457).The market structure, on the other hand, is affected by availabilityof substitutes, threat of new firms entering the market, level ofrivalry among existing players, the bargaining powers of buyers aswell as that of suppliers (Elisante, 2006, p. 6). An effectiveanalysis of Porter’s Five Forces help marketers determines theattractiveness and the competitive position of a given industry.


PESTELanalysis is tool that provides marketers with a framework that helpthem analyze the macro-environment in which their organizationsoperate in. The ongoing and drastic changes in the modern societyhave intensified market uncertainties, which create the need foreffective tools that can help organization, study theirmacro-environment and monitor it continuously (Abdullah, 2011, p.1448). By using PESTEL analysis, marketers are able to assess howpolitical, economic environment, social, technology, environment, andlegal issues affect business. Most importantly, PESTEL frameworkgives marketers an opportunity to monitor conditions affecting theentire economy, where most of them are beyond the control of theorganization (Khan, 2015, p. 959). Therefore, PESTEL analysis helpsorganization to have wider perspective of their environment byassessing factors that affect business in general.

Listof references

Abdullah,M. and Shamsher, R., 2011. A study on the impact of PEST analysis onthe pharmaceutical sector: The Bangladesh context. Journalof Modern Accounting and Auditing,7 (12), p. 1446-1456.

Ayub,A., Razzaq, A., Aslam, M. and Iftekhar, H., 2013. A conceptualframework on evaluating SWOT analysis as the mediator in strategicmarketing planning through marketing intelligence. EuropeanJournal of Business and Social Sciences,2 (1), p. 91-98.

Elisante,G., 2006. Application of Porter’s five forces framework in thebanking industry of Tanzania. IMSInternational Journal,1, p. 1-28.

Jaradat,S., Almomani, S., and Bataineh, M., 2013. The impact of PorterModel’s five competence powers on selecting business strategy.InterdisciplinaryJournal of Contemporary Research in Business,5 (3), p. 457-470.

Khan,U., 2015. A critical analysis of internal and external environment ofApple. InternationalJournal of Economics, Commerce and Management,3 (6), p. 955-967.

Valentin,K. (2005). Away with SWOT analysis: Use defensive/offensiveevaluation instead. TheJournal of Applied Business Research,21 (2), p. 91-105.

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