Environmental analysis

It is important to understand your environment as sometimes things that you can and can’t control will have an impact on your success. These factors can aid or hinder you and using environmental analysis tools such as PESTEL, SWOT & TOWS can help you adapt to avoid threats or to exploit opportunities for your benefit.


Figure 1 PESTEL analysis

PESTEL (Figure 1) stands for Political, Economic, Sociological, Technology, Environmental and Legal. It is a tool that is used to analyse your external macro environment which can have an influence on your project, organisation or company.


Is there going to be new government policies, how stable is the government, any new trade deals or changes to legislation. For example, is how is Brexit going to affect your supply chain?


Is the country you are based experiencing any economic growth? What are the inflation rates and is it having an impact on your profits and operating costs? Do you have access to innovation grants to help you develop your product?


What are the current lifestyle attitudes and challenges you face in your area? Are there cultural barriers that could have an impact on your exports? What are the market trends in your industry? For example, is the market for cubesats in Europe growing at a faster rate than the US?


Are there new relevant technologies being developed in your industry that you can use? What is the state-of-the-art technologies available? What are the current capabilities of cubesats satellites?


Does the weather or global warming have an impact on your project or what environmental challenges do you want to address or tackle? Are there going to be new environmental policies that you will need to adhere to?


Are there any laws that are currently in place or proposed that could impact your operations or projects? For example what are your countries laws regarding operating spacecraft such as licensing or is there a law being proposed regarding space debris going to force you to include de-orbiting mechanisms? How does ITAR laws affect your applications since you are using a hold down release mechanism from the US?

In some cases a PEST analysis can be carried out where environmental and legal are combined in other areas for example political or sociological. 


SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It’s a tool that is used to analyse your internal microenvironment which can have an impact on your project, organisation or company.

Internal factors

Filling out a SWOT analysis is quite straightforward. You should start with your internal environment (Figure 2) which focuses on areas that you can control and influence. These areas are your strengths and weaknesses. 

Figure 2 internal analysis


Strengths are what you are good at which can be skills, knowledge, technological advantages, customer base, unique selling points etc. These are areas you want to maintain and build a base for your team or organisation. You have experience in developing reliable pico satellites with regular launch schedules and a good market share of the small satellite market. Your satellites have a pointing accuracy of ±0.5° where your closest rivals can only achieve ±2° which allows you carry out high value missions that require satellites with high accuracy requirement.


Weaknesses are areas you need to improve on which can be things such as lack of skills, funding, strength of your competitor and market share. Your expertise is in a narrow field so growth is limited and your market visibility in a market you want to enter is non-existent. Your satellites may be more accurate but since it’s a pico satellite like a pocketqube you have volume limits so you can’t perform missions that require large payloads.

External factors

After you have completed your internal review it’s time to look outwards to your external environment (Figure 3) that you can’t control but will have an impact on you or your organisation.  These are opportunities and threats.

Figure 3 External analysis


Opportunities are factors or events that you can aid you such as growth in the market, new technologies becoming available, new potential markets or government funding available. In our satellite example we are experiencing a growth in our market as new customers are seeking satellites and ESA has declared a new funding grant in developing novel technologies for space.  


Threats are external factors that will harm you or your organisation. These can be new regulations that could have a negative impact, supplier going out of business, new rival products, market shrinking or new competitors who could take your customers. Such examples are your competitor is developing a satellite with ±0.5° which is going to be cheaper than your system and your launch provider is facing bankruptcy which will cause your missions to be cancelled or delayed.


A TOWS (Figure 4)works in a similar manner to a SWOT analysis but this time instead of identifying your internal and external factors you will pair them up and develop a strategy.

Figure 4 TOWS analysis

S-0 Strategy

This is where you or your organisation will be at it’s strongest as you match opportunities against your strengths. You want to develop strategies to fully exploit the opportunities you have identified. In our small satellite builder example we have experience in developing an advanced pocketqube satellite therefore we have the capabilities and space heritage and there is scope of the new markets and customers to approach. In addition, we could use ESA funding to aid us in developing new hardware for our satellite to enter new markets. 

S-T Strategy

We match our strengths against our threats and try to minimise the damage or try to eliminate them. We already have our satellite in the market and have a background in making very accurate ADCS systems. We could look to improving our design or target our competitors’ customers (if they haven’t signed any agreements) and offer our services instead of waiting for the alternative to come into the market.

W-0 Strategy

Sometimes our weaknesses are hindering us to exploit potential opportunities which needs to be addressed. We could apply for funding to develop a cubesat to allow us to enter the potential new markets or target new customers. We could also sell our ADCS systems to satellite builders of larger systems.

W-T Strategy

This is where we are at our most vulnerable as our weaknesses could make it difficult to cope with the potential threats. Since we have a pico satellite with limited applications and our launch service being disrupted. We could use the connections within ESA to identify potential replacement launch vehicles. In addition, with our competitor developing a comparable product we could use the time to possibly investigate optimising our current design to make it cheaper to manufacture and pass the savings to our customers.

Carrying out PESTEL, SWOT and TOWS analysis can help you plan for future products and projects based on your investigations, so they are useful to carry out and review after a predetermined interval.  

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