Tools For Company Analysis: SWOT, PESTLE, Porter’s Five Forces, Benchmarking, BCG Matrix, And Essay.

For this Interim Assessment, you will be required to do research and find the assessment tools that are available to provide an analysis of the Company. What are the different tools available to provide Company analysis? Your research should identify the tools and how they are used. What are the benefits and disadvantages of these tools? What combination of tools would be best for your business & industry? Why?

SWOT Analysis: Application for Company Analysis

Models for Company Analysis

SWOT Analysis

The full form of each letter of SWOT is strength, weakness, opportunities, and threats. The analysis of a company with respect to these Four Points is done by this analysis.

Application for Company Analysis

Strength is helpful in analysing the internal capabilities of an organization in attaining the competitive advantages in the associated market. Organizations can make an effective business strategy through analysis of strengths in proper manner (Görener, Toker and Ulucay, 2012). On the other hand, weakness provides a way to develop the strategies by which weak points can be eradicated from the company. A market contained different opportunities that can be attained by an organization to expand the business operations in more productive manner. Threats alarm the company to know about the different competitors and the trouble that will come in the future for the company.

Advantages

SWOT analysis has different advantages for the management and individuals. These advantages are as below:

• Multilevel analysis can be possible with the help of SWOT analysis
• It is the simplest method to analyse a company.

Disadvantages

• No weighing factors are included in SWOT analysis.
• It is the subjective analysis.
• It is the one-dimensional model that creates ambiguity

PESTLE Analysis

PESTLE analysis includes the external environmental factors that can affect the operational activities of an organization. It is an effective method that can be used to analyze that how a company is operating its business operations in the external environment. PESTLE includes different factors like political, economic, social, technological, environment and legislation.

Application for company analysis

The political situation of the country is responsible for doing business with ease or not. Economic factors include interest rate, exchange rate, labour cost and government policies that can influence an organization. The product and services that are provided by the company are socially acceptable or not is analysed in the social factor. The use of innovation and technology in the company as compared to the market can be understood with the help of a technical factor. The legislation that is present in the particular country for the company is also helpful in the company analysis (Srdjevic, Bajcetic and Srdjevic, 2012). The sustainable environment methods are implemented by the company or not is being analysed with the environmental factors.

Advantages

• It can be helpful in reducing the potential impacts to the organisation.
• Easy to use a framework, for the analysis of the company
• Analysis of the implication of entering undue Market by the company can be done easily with the help of PEST analysis.

Disadvantage

• This method requires a huge data regarding the external factors.
• The cost involved in this analysis is more as compared to SWOT analysis.

It is an effective method of analyzing the competitive factors that can influence the business activities. This analysis comprises five points i.e. bargaining power of suppliers, threat of new entrants, the threat of substitutes, the bargaining power of buyers and industry rivalry are the main points under which the analysis is done.

Application for Company Analysis

If a number of companies are there in the particular industry then the profitability of existing company will become down. The retail industry is highly competitive as there are several big retail organizations in the industry. If Tesco is not providing a good product to the company on the reasonable price then the customer may move to the substitute. There can be a situation in which the customer can make the pressure on the organisation to lower the prices. This can be possible because of moving of customer from one company to other. This denotes the bargaining power of the customer. Bargaining power of the supplier varies from area to area (Dobbs, 2014). If there is a good amount of supplier present to the company then the bargaining power of the suppliers will be low. In the present time, there is a competition among all the companies. The competition is due to the innovation in the product and services. Competitors can be analysed with the help of industrial rivalry.

Advantages and Disadvantages of SWOT Analysis

Advantages

• It is helpful in the analysis of competitive forces.
• The attractiveness of the industry can be analysed.

Disadvantages

• Business issues are not addressed in the Porter five forces analysis.
• Company business environment is not addressed that is necessary for the profitability of the company.

Benchmarking

The matrix of the company is compared with the competitor of the company in the industry.

Application for company analysis

The method is used to analyze the company in terms of generating revenues. The production cost of the product of the company is analysed interest analysis. The employee turnover is also determined with the help of benchmarking (Zhu, 2014). The process cycle time is investigated in this process.

Advantages

• Implementation of creative ideas can be done.
• Quality of work can be provided to the customers.

Disadvantages

• Insufficient information is available with the help of benchmarking for company analysis(Tian & Ketsaraporn, 2013).
• The strategies that made after benchmarking showing decreased results.

BCG growth-share matrix

With the help of BCG growth-share matrix, the growth of the company can be analysed in effective manner. This matrix is also known as quadrant matrix. The relative strength of the product can be analysed with the help of this Matrix.

Application for company analysis

For the growth of the company, cash is required. This can be obtained from the other businesses that can generate cache for the company with the help of share. The categorisation of the form is done that can generate a different type of cash for the company. The dog is the category that has a low market share and having low growth rate (Jonas, Gebhardt and Krause, 2012). Therefore, this category does not generate and consumes a large amount of cash. The question mark that is growing but they are having a low market share. Therefore, this category will consume a good amount of cash but generate less cash. Star is the category that can generate a large amount of cash as well as consumes also. The cash cow is the categories that consume fewer amounts of cash and generate the good amount of cash due to the mature presence in the market as a share leader.

Advantages

• Simple and easy to understand
• Future actions can be decided

Disadvantages

• Neglect synergies between business units.
• High market share not always leads to profitability

Model Suitable for Tesco PLC

Tesco PLC is providing its retail services across UK. The company totally deals in a wide variety of grocery products at a resonate prices. Tesco Plc has required to analyze different strategies to identify the competitive advantage in the UK retail market like price penetration, product differentiation, and effective supply and so on. Hence, BCG matrix would be more effective for Tesco in terms of future development, because the company can easily identify the cash cow products and invest more in particular product in order to maximise the revenue.

Conclusion:

From the above discussion, it can be concluded that each of the analysis model has different advantages and disadvantages that must be considered by the organizations while making strategic decisions. It is necessary for an organization to implement all the models for the analysis of the company that will lead to growth of company.

The purpose of this report is to analyse the different type of tools that can be used by an organization in making growth strategies. In this concern, the report is determining the different tools like SWOT, PESTLE, Porter’s five force, Benchmarking and BCG matrix tools. Tesco PLC is taken into consideration to make understanding about the role of these tools in an organization.

References:

Dobbs, M., (2014) Guidelines for applying Porter's five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), pp.32-45.

Görener, A., Toker, K. and Ulucay, K., (2012) Application of combined SWOT and AHP: a case study for a manufacturing firm. Procedia-social and behavioural sciences, 58, pp.1525-1534.

Jonas, H., Gebhardt, N. and Krause, D., (2012) Towards a strategic development of Modular Product Programs. In DS 70: Proceedings of DESIGN 2012, the 12th International Design Conference, Dubrovnik, Croatia, pp. 959-968

Srdjevic, Z., Bajcetic, R. and Srdjevic, B., (2012) Identifying the criteria set for multicriteria decision making based on SWOT/PESTLE analysis: a case study of reconstructing a water intake structure. Water resources management, 26(12), pp.3379-3393.

Tian, Z. and Ketsaraporn, S., (2013) Performance benchmarking for building best practice in business competitiveness and case study. International Journal of Networking and Virtual Organisations 11, 12(1), pp.40-55.

Zhu, J., (2014) Quantitative models for performance evaluation and benchmarking: data envelopment analysis with spreadsheets (Vol. 213). UK: Springer.