What Is Swot Analysis Of The Macro Environment

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Strategic management is essential for companies to manage their business strategy and analysing the macro environment is a critical component. Two common but very useful tools to examine a company’s environment are PESTLE and SWOT. A PESTLE analysis is a framework used for identifying and analysing external factors in an organisation’s macro environment (Johnson et al, 2011) and is a mnemonic for Political, Economic, Socio-cultural, Technological, Legal and Environmental factors. A SWOT is a situational analysis used to examine the internal and external factors that may impact the strategic plans of an organization and is a mnemonic for Strengths, weaknesses, opportunities and Threats. Opportunities and threats are used to examine the external environment and strengths and weaknesses the internal environment. Conducting a PESTLE and SWOT analysis on the macro environment has many advantages for companies for example the tools are simple and straightforward to use, they help the understanding of the specific business environment, develop strategic thinking capabilities, allows for creating strategies to reduce external threats and uncovers new opportunities to explore and exploit. McDonald’s entry and success in India represents a key example of the value of PESTLE and SWOT in developing successful strategies to survive and gain a competitive advantage in the marketplace. India represented a tremendous opportunity for expansion as an emerging market and to develop effective

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