Using LoNGPEST with SWOT in Corporate Analysis

Two of the basic tools taught in business schools are to perform a global analysis of a company. The most popular analyzes are SWOT (or TOWS) and PEST (often with LoNG). The first analyzes the more local problems of the individual company in a micro sense, while the second analyzes larger problems in a macro sense. These tools were first thought of and introduced in the 1950s by Albert Humphries in the 1950s while he was at Stanford University (although some of the original authors are not particularly clear).

Very useful tools without a doubt, but before working on them, it is important to brainstorm among the stakeholders of the organization that is being analyzed. By looking at stakeholders, you help clarify the situation and who might be affected by the various factors, both external and internal in nature. Brainstorming techniques are a good way to gain understanding for further analysis. Also, keep in mind the raison d’être of a company or organization.

The PEST analysis is a look at the larger macro picture of what affects the environment of the company or organization. This is often combined with LoNG to create the LoNG-PEST analysis. It is an acronym that stands for Local, National and Global (LoNG) and Political, Economic and Technological impacts. So, with that in mind, there are a total of 12 elements that need to be considered and thought about in the analysis, taking into account the macro implications for the company, its stakeholders, the environment (from the very local to the international ). Please note that the LoNG-PEST analysis was conducted with the company in mind, focusing on the industry or business in which it operates, but incorporating information and trends from other industries.

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SWOT Analysis is also known as TOWS and is another acronym used at the micro scale of the company and individual organization. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. In this analysis how the company could be affected by each. Use the above information that was generated in the LoNG-PEST to help identify the factors that affect the company. This time it is at a very micro level that the analysis is carried out with individual factors that currently affect the company or problems that have a high probability of affecting the company in the near future. The organization’s strengths should look at where the obvious strengths are, including the competitive advantage it possesses. Opportunities are both internal and external to enhance strengths, create new strengths, and enhance the organization’s raison d’être. Weaknesses are those that detract from strengths, hinder opportunities, and generally hurt overall performance. Threats are those that threaten the organization, both internally and externally (a LoNGPEST review is often helpful in recognizing threats).

Remember, these analyzes are to help you look at your organization and be able to see trends and when they might fit into organizational structures. The issues you need to address are often ones that may or may not immediately come to mind. But, with the help of analysis, you often get an idea when they are used. While avoiding analysis paralysis, use these simple tools to better understand and prepare your organization for the future.