Which analysis is used to assess external factors influencing an organization?

The PESTEL analysis is specifically designed to evaluate external factors that can affect organizations. This framework examines Political, Economic, Social, Technological, Environmental, and Legal influences, providing a comprehensive overview of the external environment in which a business operates. By understanding these external factors, organizations can better strategize and adapt to changes in the marketplace, identifying opportunities and threats that may arise due to shifts in any of these domains.

While SWOT analysis includes the evaluation of Threats and Opportunities, it also simultaneously assesses internal factors such as Strengths and Weaknesses, making it more comprehensive than just an external-focused analysis. Value chain analysis focuses on the internal processes of the organization to identify competitive advantages and inefficiencies rather than external influences. The BCG matrix is a tool for portfolio management that assesses a company's various business units based on market growth and market share, not external factors impacting the organization. Thus, PESTEL stands out as the most suitable analysis for assessing the external influences on an organization's strategic direction.