Business Success in the New Normal - Analysis Techniques
Business Perspectives GB 500
1.Organizations are directly influenced by the constantly changing external factors that directly and indirectly impact their business decisions and performance. Doing an analysis opens a portal to more informed decision making and plans, even if the future is not predictable. PESTLE is generally used in workshops, meetings or groups where collective information is being shared. It analyzes the social impact of external factors. Each letter in PESTLE represents a component of the external operating environment. They stand for Political, Economic, Socio-cultural, ...view middle of the document...
Many businesses large and small have taken social responsibility for the community where they live or work.
The business industry’s external conditions are constantly changing and it is crucial to keep aware. A PESTLE analysis is one of the best tools to help assess a changing environment.
The Porters Five Forces tool is to understand where power lies in a company with outside sources at play. This aids the company in understand both the strength of the current competitive position and the strength of a product being planned. With this clear understanding of where the power is, an organization can take advantage of this position of strength; see weaker positions that need work, making wrong moves and decisions far less avoidable. This tool unlike the PESTLE that assesses social circumstances, this tool is used to identify market circumstances. This tool is for assessing the market and testing any new products. The five very important forces here play a vital role in attaining competitive power in a business situation. The areas of assessment are Supplier Power- here the question is how easy it is for suppliers to raise prices. Buyer Power where it is determined how easy it is for shoppers to bring the prices down. Competitive rivalry is about the number and capability of business competitors. Threat of substitution is the customers finding another way to do what they do. Threat of New Entry is affected by the ability for others to enter the market.
Environmental- 1) Environmental rules and regulations 2) Environmental disasters in countries producing coffee beans 3) Global warming and other environmental issues in a global level (Dlabay, l, Burrow, JL & Kleindl, B 2011)
2. The effectiveness of a PESTEL is dependent on accuracy of data collected, timely updates to address changes. The analysis requires a lot of data to be collected but when too much data is being used it often confuses the users they lose sight of the factors that are critical. When this occurs, the prioritizing all the information can put the plan on the wrong track. Because external factors change so quickly it becomes complicated to how these factors will affect the present or future of a project. This produces uncertainty or increases assumptions in the analysis. Unless are examined critically in terms of the degree of impact, the findings of the analysis do not have much value. Collecting too much data even from the right sources can be a problem since the data is collected from external sources. This can make the PESTEL analysis time consuming and costly. This analysis only takes into consideration external environment and does not look at other factors that will bring effects to the organization.
3. The skills that leaders will need to meet these challenges start with problem solving and decision making....