In the sphere of strategic planning and business analysis, SLEPT and SWOT represent two common tools that help an enterprise comprehend the environment and pave the way for proper decision-making. While these two frameworks are used for related business purposes, they differ by focus and application. This article explains, with examples, the main differences between SLEPT and SWOT analyses and argues about their applications in business strategy.
Understanding SLEPT Analysis
SLEPT analysis is a strategic planning tool for a situation where each inserted element is considered within the view of five different dimensions of the external environment:
- Social: Demographic changes, cultural trends, lifestyle shifts.
- Legal: legislation, regulations, and compliance requirements.
- Economical: Economic growth, inflation rates, employment levels.
- Political: Government policies, political stability, trade regulations.
- Technological: Technological development, innovation, automation.
Here, SLEPT analysis helps the business to understand those external factors, and hence enables it to foresee opportunities and threats, and therefore plan and strategy accordingly.
Understanding SWOT Analysis
The SWOT analysis is rather a versatile framework in analyzing both the internal and external factors that affect an organization. This SWOT factors are as follows:
- Strengths: Those internal attributes that offer competitive advantage.
- Weaknesses: These are internal attributes that can zap performance.
- Opportunities: Factors external to the organization that it has opportunity to capitalize on.
- Threats: These are the factors outside the company’s control, which can pose some problems or risks.
SWOT analysis provides a view of the holistic business environment. Thus, it enables organizations to build on their strengths, address weaknesses, exploit opportunities, and mitigate threats.
Key Differences Between SLEPT Analysis and SWOT Analysis
Scope and Focus:
- SLEPT Analysis: This analysis deal exclusively with the external factors on five dimensions: social, legal, economic, political, and technological.
- SWOT Analysis: This analysis deal with the factors associated with the company’s internal environment, such as strengths and weaknesses, and external environment, like opportunities and threats.
Depth of Analysis:
- SLEPT Analysis: It is a detailed analysis of the external environment that helps to know the market dynamics and information about the external environment.
- SWOT Analysis: It is the broader view, simply replacing the internal and external perspectives to provide a balanced strategic assessment.
Applications:
- SLEPT Analysis: Very good at market analysis, environmental scanning, and strategic planning for a company facing external changing conditions.
- SWOT Analysis: Very adaptable and largely used for strategy building, competitive analysis, and assessments of internal competencies.
Applications in Business Strategy
SLEPT Analysis in Practice
For example: A technology company targeting entry into another country would be interested in analyzing SLEPT to understand the prevailing market conditions, local regulatory environment, and technological infrastructure in that country. It aids in the identification and fitting of a market entry strategy within external factors.
For example: A pharmaceutical company will use the SLEPT analysis to keep itself updated with changes in the laws and regulations, so that drug approval processes are done in the spirit of the law, staying clear of risks.
SWOT Analysis in Practice
Strategic Planning:
For example: A retail business may claim, under a SWOT analysis, its strengths in customer service and brand loyalty but weakness in supply chain efficiency; an opportunity in the growth of e-commerce and threats from some rising competitors. This provides strategic decisions to enhance strengths, address weaknesses, seizing opportunities, and countering threats.
Product Development:
For example: A software company can use SWOT analysis to determine the extent of its development capabilities, any weaknesses in its product line, emerging areas of market need, and explore the new technologies that may prove to be disruptive.
Conclusion
SLEPT and SWOT analyses are very essential tools in strategic planning. SLEPT analysis gives the general overview of the external factors, while the SWOT analysis provides a proper balancing between the internal and external environments. Accordingly, companies can gain from both frameworks valuable insights into making effective decisions in a changing environment to attain sustainable growth.
References
- Johnson, G., Scholes, K., & Whittington, R. (2008). Exploring Corporate Strategy: Text and Cases. Pearson Education.
- Kotler, P., & Keller, K. L. (2016). Marketing Management (15th ed.). Pearson.
- PESTLEanalysis.com. (2021). “PESTLE Analysis: Business Environmental Analysis”. Retrieved from PESTLEanalysis.com.
By knowing the important differences and the applications of SLEPT and SWOT analyses will place businesses in a better position to understand the complexities that operating environments come with and developing sound strategies for success.
