• P – Political – The current and potential influences ( threats or opportunities) from the political environment e.g. increased taxes (threat) free education ( opportunity) – To be examined in this area are impact of Trade policies /issues, trade restrictions and reform, Government policies, Elections/ government term and change, Political issues, Wars and conflict- effects of worsening relations with other countries.
• E – Economic – What opportunity or threat is posed by economic factors in the local, national and world economy – to be examined in this area are impact of economic growth/ decline- recession/ loss of jobs, interest rates, exchange rates, wage rates, minimum wage, working hours, Inflation – rising prices, Government spending, credit availability, cost of living
• S – Sociological – Are any opportunities or threats resulting from this environment – how are changes in society affecting us- to be examined in this area are impact of Cultural norms, Rising Crime, Changing role of women, Changing consumer tastes, Education, health consciousness, career attitudes, living standards, Demographics(age, gender, race, family size), Ethnic and religious differences, population growth
• T – Technological – How are new and emerging technology affecting us be it in job availability or otherwise. What opportunities or threats are posed by technology?- to be examined in this area are impacts of what is happening with new technology which can impact what you do. Increasing use of Internet, cell phones, new discoveries – New ways of doing things- purchasing by way of the internet
• L – Legal – Do any existing or potential laws local, national and world legislation pose any opportunity or threat to us? – to be examined in this area are impacts of what is happening with changes to legislation i.e Laws that may impact on employment, access to materials, resources, safety, health. taxation etc and regulations
• E – Environmental – do the local, national and world environmental issues and their laws offer opportunities or threats to us?- to be examined in this area are impacts with respect to environmental issues/regulations/Recycling considerations
Remember to include competition in external analysis especially if you are doing a business SWOT. A business swot seeks to determine the internal strengths ( growing clientele) and weaknesses ( poor stocking levels) of the business and the opportunities ( favourable factors in the environment that can be explored e.g. a growing market for health food products) and threats facing the business (government sanctions for breaching legal requirements)
For those of us who have businesses, as the environment changes, there is often the need for us to do a business Swot that will help us to access the strengths and weakness of our businesses and opportunities available to it and threats to our business. My post How to do SWOT analysis deals with how to do a business SWOT.