Which statement best differentiates SWOT and PESTLE analyses and explains how they complement strategy development?

• A. SWOT analyzes macro-environmental factors; PESTLE analyzes internal strengths and weaknesses.
• B. SWOT analyzes internal strengths/weaknesses and external opportunities/threats; PESTLE analyzes macro-environmental factors.
• C. SWOT analyzes only opportunities; PESTLE analyzes only threats.
• D. SWOT and PESTLE are the same technique.

Answer: (B)

Understanding how SWOT and PESTLE differ and how they feed into strategy is the key idea. SWOT is a two-sided lens that brings together internal factors—strengths and weaknesses—and external factors—opportunities and threats—into one view. PESTLE, on the other hand, focuses on the external, macro-environmental factors in depth: political, economic, social, technological, legal, and environmental influences. When you develop strategy, you use PESTLE to add detail and context to the external side of SWOT, helping you anticipate changes and identify how external forces create opportunities or pose threats. This combination lets you align internal capabilities with the broader environment: you know what you can leverage from inside the organization and you understand the external trends that will shape future performance. The other descriptions misplace internal versus external focus or treat the tools as the same, which misses how the external context provided by PESTLE informs the external elements of SWOT.