The Six Factors of PESTEL Analysis
Question:
Discuss about the Competitive Strategies In Business.
The various strategic development tools that might be implemented in a given business scenario might help the concerned business organization to consider the various potential external and internal factors that might affect the concerned organization. This in turn might assist in the mapping out of the numerous approaches that are considered to be necessary in the matters that are required to put up with the impacts of the various factors that might have been affecting the concerned business organization (Rothaermel 2015). These are a number of the strategic development tools that might have helped ensuring the fact that the appropriateness of the strategic implementations and the various consequent plans that are to be implemented in order to implement the various action plans. The following essay deals with the discussion of three different strategic development tools that might help in the development and implementation of the numerous strategic developmental tools that assists in the overall growth of the concerned business organizations.
One of the popular strategic developmental tools used by the various business organizations is the PESTEL analysis tool. The PESEL analysis helps in analyzing the various elements belonging to the macro-environment of the concerned organization that might have an effect on the concerned business organization. This tool takes into consideration a number of factors that might have an effect on the various functionalities of the organization. These factors majorly include the Political factors, the Economic factors, the Social factors, the Technological factors, the Environmental factors and the Legal factors that have been playing in the external environment of the concerned business organization (Kolios and Read 2013). The PESTEL analysis is an acronym that is used to refer to all the afore-mentioned factors that are needed to be analyzed in order to deal with the effects that these factors might have on the concerned automobile organization. The political factors that are highlighted in this analysis refer to the major political issues and policies that are maintained within the given country. These factors generally highlight the various areas of the economy wherein one might find the intervention of the government of the concerned state. The political stability of the global markets of the given company might also be considered to be one of the major political factors that might affect the automobile company. The company of Ford and General Motors, as for example, had fallen over by 10% after the Brexit legislation in United Kingdom (Goodhart and Schoenmaker 2016). The economic factors affecting the automobile company might refer to the economic growth that the concerned organization is facing. The other economic factors that might affect the organization are the inflation rates, the interests that the automobile company might have earned, the rates of exchange that are followed by the concerned automobile company and the impact pf the same on the concerned society of the state wherein the concerned automobile company has been located. The social factors that affect the society are the attitudes and the shared interests of the people who have been serving the given automobile organization. The technological factors that affect the concerned automobile organization might refer to the various new ways that deal with the production and the distribution of the various products and services that are provided to the clients of the concerned automobile organization (Cairns et al. 2013). The technological factors affecting the concern might refer to the various ways that are used for communicating with the various clients of the concerned automobile organization. The environmental factors affecting the automobile organization refer to the scarce conditions that the automobile company might be facing in terms of the raw materials that are needed by the company and the other ethical and sustainable factors that might affect the concerned company (Zalengera et al. 2014). The legal factors that might affect the company deal with the various factors that deal with the safety and the security of the concerned employees of the automobile organization and might pertain to the health and the safety measures, the equality in the various opportunities that are provided to the concerned employees, the advertising standards that the concerned automobile company abides by and the laws and the rights that the concerned company extends to the various clients of the same.
Importance of PESTEL Analysis in Business Strategy
The strengths and the weaknesses of the concerned company might be evaluated from the results that are obtained from the PESTEL analysis of the concerned automobile organization. Thus, it can safely be concluded that the SWOT analysis of the concerned organization might follow from the PESTEL analysis of the concerned organization. The SWOT analysis of the organization is generally conducted on the micro-environmental factors that might affect the concerned company and is known to be another useful strategic development tool. The Strengths of the organization, the Weaknesses of the organization, the Opportunities that the organization might have and the Threats that the organization might face are brought together under one group heading which is formed as an acronym for all the four groups, SWOT analysis (Shahabi et al. 2014). This strategic development tool helps in the identification and the prioritization of the various strengths of the organization, the weaknesses of the organization, the opportunities that might be availed by the organization and the threats that are faced by the organization (Yuan 2013). The strengths of the organization often refer to the areas wherein the concerned organization might deal with the various features of the company that enhance the growth of the automobile company. The weaknesses of the company are generally the factors that deal with the hinder the growth of the concerned organization (Xingang, Jiaoli and Bei 2013). The opportunities of the organization generally refer to the sectors of the industry wherein the company might find the areas of growth either in the same market or in markets of the foreign lands. The threats of the concerned organization refer to the areas that the company needs to put a special look out for in order to bring about an overall growth of the automobile organization. The SWOT analysis of the organization helps the concerned organization to identify the various area wherein the concerned automobile company might need to improve in order to bring about an overall growth in the growth of the concerned company.
The Five Forces Model as proposed by Michael Porter is considered to be yet another tool that is used for the strategic development and planning of the policies that might need to be implemented by the concerned organizations in order to analyze the concerned market on the basis of the five factors that are proposed in the framework by Michael Porter. The five factors that are put forth in the book Competitive Strategy, by Michael Porter include the industry rivalry that exists among the various competitors in the market (Rothaermel 2015). The bargaining power of the buyers also tend to be one of the major factors that affect the various businesses. The bargaining power of the potential suppliers of the concerned automobile organization should also be taken into consideration while analyzing the concerned market wherein the concerned organization desires to expand (Yunna and Yisheng 2014). The company might also face the threats due to the new automobile organizations that have been entering the market as well as the companies and the products and services that have already been existent in the market. The Five Forces analysis of the environment might help the concerned automobile company to form an overview of the environment wherein the company operates and thereby helps the company to plan the strategies that they might implement in the future (Aithal 2016).
Thus, in lieu of the above discussion it might safely be concluded that the tools employed for the strategic development and planning help in the careful planning of the strategies that need to be implemented and thus help in fostering the future positive growth of the concerned company.
References
Aithal, P.S., 2016. Study on ABCD analysis technique for business models, business strategies, operating concepts & business systems. Browser Download This Paper.
Cairns, G., Ahmed, I., Mullett, J. and Wright, G., 2013. Scenario method and stakeholder engagement: critical reflections on a climate change scenarios case study. Technological Forecasting and Social Change, 80(1), pp.1-10.
Goodhart, C. and Schoenmaker, D., 2016. The global investment banks are now all becoming American: does that matter for Europeans?. Journal of Financial Regulation, 2(2), pp.163-181.
Kolios, A. and Read, G., 2013. A political, economic, social, technology, legal and environmental (PESTLE) approach for risk identification of the tidal industry in the United Kingdom. Energies, 6(10), pp.5023-5045.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Shahabi, R.S., Basiri, M.H., Kahag, M.R. and Zonouzi, S.A., 2014. An ANP–SWOT approach for interdependency analysis and prioritizing the Iran? s steel scrap industry strategies. Resources Policy, 42, pp.18-26.
Xingang, Z., Jiaoli, K. and Bei, L., 2013. Focus on the development of shale gas in China—Based on SWOT analysis. Renewable and Sustainable Energy Reviews, 21, pp.603-613.
Yuan, H., 2013. A SWOT analysis of successful construction waste management. Journal of Cleaner Production, 39, pp.1-8.
Yunna, W. and Yisheng, Y., 2014. The competition situation analysis of shale gas industry in China: Applying Porter’s five forces and scenario model. Renewable and Sustainable Energy Reviews, 40, pp.798-805.
Zalengera, C., Blanchard, R.E., Eames, P.C., Juma, A.M., Chitawo, M.L. and Gondwe, K.T., 2014. Overview of the Malawi energy situation and A PESTLE analysis for sustainable development of renewable energy. Renewable and Sustainable Energy Reviews, 38, pp.335-347.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
