PESTLE and SWOT analysisWatch
Would anyone be able to help me with this question? I've looked on the internet but don't really understand anything...
Explain the use of different models of analysis in understanding the organisational environment.
These are the models of analysis I'm using:
SWOT (Strengths, weaknesses, opportunities and threats)
PESTLE (political, economic, social technological, legal and environment
Strengths and Weaknesses come internally from the business whereas the opportunities and threats come externally from the business. See examples below.
- the location of the business is in a prime location which will help to increase sales which is a strength the business
- Experienced management team - has experience within that business which will help give a competitive advantage
- Lack of capital available - this could mean having to use overdraft which means interest charges will be applied but also means that limited expansion can happen
- Lack of reputation - if it is a new business that has only just set up, they will need to set up a customer base in order to give more strength to the business
- Growing market in which you operate which cause sales to go up which means that you will need to make the most of this opportunity
- Introduction of government policies - for example with the help to buy scheme, this would have been beneficial for the housing marketing as the government was helping people buy new homes which allowed housing businesses sell more houses
- Competition is the biggest threat - new businesses could take customers away from your business which would decrease sales for your business
- Price fluctuations in supplies - this would therefore mean that your prices would have to increase in order to make up for the extra being paid for your supplies.
The best way to use this model is explain how you would turn your weaknesses into strengths and how you would turn your threats into opportunities.
I am not to sure what you are expected to do with the PESTLE model but when I covered it at school this is how I used it.
Political - we looked political policies that had been introduced that would affect businesses, for example the rise of business taxes and how this would affect the business.
Economic - things such as what the economy is like such as recession or boom and how this would affect the business
Social - how the structure of families have changed and that there are a lot more single parents out there and this could therefore change the way in which you market your products
Technological - Advances in technology is always happening, you just need to look at how this could affect the business such as when online shopping was first introduced, a business would have to adapt to this.
Legal - legal policies such as the minimum wage, if this was to be increased, it would mean that it will cost more for the business which would mean that they would have higher costs
Environmental - Businesses are looking at how green they are when they operate especially with things such as rubbish and transporting goods, they might look at reducing their footprint.
I hope that this all helps you with your work, and if you would like any more help or would like me to explain anything that I have put here, then just let me know