There are three main theoretical business tools that most business guru’s, academics and experts advocate. These are:
These acronyms will come up though the whole course, as they impact upon all businesses that are successful and are aspiring to be. We will briefly consider these valuable business tools. To illustrate each of these business analysis tools, the following diagrams explain how they are applied and used:-
Strengths and weaknesses are internal and external to an organisation. A good example of external opportunities and constraints is that of the building industry in the UK today. The government is encouraging developers to build on 'brown field' sites as opposed to 'green field' sites. The constraint therefore is not being able to develop on green field sites while the opportunity is that of developing on brown field land. But, just as important as these three are, the greatest problem for business is threats – competition; regulation, compliance, etc.
The best way of thinking about constraints and opportunities is to realise that good businesses will seek to turn constraint into opportunities, while at the same time building on existing opportunities.
Organisations should use their strengths such as having a good reputation, and experience in a particular field or segment of the market coupled with good marketing and resources, to build competitive advantage.
Before creating business plans or when evaluating existing ones it is important to 'scan' the external environment’, for forces, that impact on the business. This can be done takes by using the very useful SLEPT analysis, which is an investigation of the Social, Legal, Economic, Political, and Technological influences on a business. In addition it is also important to be aware of the actions of your competitors. These important forces are continually in a state of flux and any business large or small, should at regular intervals carry out a SLEPT Analysis.
All businesses are influenced by SLEPT factors. For example, some of the SLEPT factors affecting the airline industry in recent years include:
Before creating business plans or making decisions, it is important to 'scan' the external environment; this tool, is similar to the SLEPT analysis, be has a much greater depth and focus; that is more useful to larger businesses. This can also be achieved through a PEST analysis, i.e. an investigation of the Political, Economic, Social and Technological influences on a business. In addition it is also important to be aware of the actions of your competitors. These forces are continually in a state of change in any business.
There are many other tools for analysis that are currently being presented in academic learning and theory, but the three given here have stood the test of time, and are universally used across business and academic settings the World over.
Source: Essay UK - http://www.essay.uk.com/free-essays/business/swot-analysis.php
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