Analysis tools

• Strengths in SWOT analysis?

  • What advantages does your organisation have and what do you do better than anyone else
  • What unique or lowest-cost resources can you draw upon that others can't?
  • Do you have skilled employees and a strong customer base?
  • Do you proved high quality products?
  • Do you have sufficient resources?
• Weaknesses in SWOT analysis?

  • High cost infrastructure
  • High employee turnover
  • Weak brand portfolio
  • High debts level
  • What factors cause loss of sales
  • Are your competitors doing better than you
• Opportunities in SWOT analysis?

  • Market growth for the business product
  • Changing customer habits
  • New technology that will enhance quality product and services
  • Disposable income level will increase
  • Growing number of people buying online
  • What good opportunities can you spot
• Threats on SWOT analysis?

  • Corporate tax may increase
  • Rising pay levels
  • Intense competition
  • Increasing fuel prices
  • Aging population
  • Stricter laws regulation environmental pollution
  • Currency fluctuations
  • Changing technology
• PORTER's FIVE FORCES?

  • Power of suppliers
  • Power of buyers
  • Power of competitors
  • Threat of substitution
  • Threat of new entrant to the market
• Power of Suppliers?

  • Suppliers that deliver high quality products may have power over the business.
  • The more powerful the suppliers, the less control the business has over them.
  • The smaller the number of suppliers, the more powerful they may be as the choice of suppliers may be limited.
• Power of Buyers?

  • Access how easy it is for buyers / customers to drive prices down.
  • Buyers buying in bulk can bargain for prices in their favour.
• Power of Competitors?

  • Competitors selling the same / similar products / services may have a greater impact on the market of the business.
  • A business with many competitors in the same market has very little power in their market.
• Threat of substitution?

  • If the business sells unique products , it will not be threatened by substitute products.
  • Assess if customers are using substitute products / services and determine reasons for using substitutes.
• Threat / Barriers of new entrants to the market?

  • The power will determine how easy it is for new businesses to enter the market.
  • If the business is highly profitable, it will attract potential competitors that want to benefit from high profits.
• POLITICAL CHALLENGE(PESTLE):

  • High inflation / interest rate may decrease the market share of businesses as customers cannot afford high prices/increase in taxes will result in lower customer spending.
  • Loans may be expensive due to high interest rates.
  • Fluctuations in foreign currency may restrict imports.
  • Trade agreements may prevent businesses from importing some medicine / products.


  RECOMMENDATION:

  • Research recent government policies
  • Network and lobby with the NGOs and all consumer rights organisations
  • Trade only with countries that have favourable trade agreements with the government.
• ECONOMIC CHALLENGE (PESTLE)

  • Inflation / Interest rates may negatively impact on businesses
  • Loans may be expensive due to high interest rates
  • Fluctuations in foreign currency may restrict import.


  RECOMMENDATION:

  • Consider decreasing profit margins rather than increasing product prices.
  • Borrow money from financial institutions when interest rates are favourable.
  • Consider exchange rates when trading with other countries.
• SOCIAL CHALLENGE (PESTLE)

  • Customers may not be able to afford products due to low income levels / high unemployment.
  • Businesses may not be conversant with the language of their customers.
  • Some customers may prefer to spend their money on medical bills for the treatment of chronic illnesses.
  • High crime rate may affect the trading hours of businesses resulting in decreasing profit.


  RECOMMENDATION:

  • Sell substitute / generic products at lower prices.
  • Learn local languages/ Hire employees with the local language.
• TECHNOLOGICAL CHALLENGE (PESTLE)

  • Businesses may not keep up with / be aware of the latest technology.
  • Employees may not be skilled to operate / maintain new technology / equipment.
  • Businesses may not be able to afford new technology
  • May not be able to cater for / afford online transactions/ e-commerce.


  RECOMMENDATION

  • Continuous research on the latest available technology/equipment in the market.
  • Train existing/appoint new employees to maintain / use new equipment at reasonable prices.
  • Businesses must be geared for online trading / e-commerce.
• Legal challenge (PESTLE)


  • Certain acts may have a direct impact on a business
  • Legal requirements for operating certain types of businesses are time consuming
  • High legal costs involved in obtaining a licence/trade mark/patent may prevent some establishments
  • Legalities of business contracts may limit business operations
• Recommendation


  1. Comply with all relevant legislation that may impact the business

  2. Comply with the legal requirements for operating businesses, e.g. licence/trade marks/patents

  3. Budget for high establishment costs

  4. Businesses must know the legalities of business contracts so that they comply with all the requirements
• ENVIRONMENTAL CHALLENGE (PESTLE):

  • Chemicals/ingredients in business' products may be harmful to customers.
  • Measures to dispose of business waste may be expensive.
  • Packaging of some products may not be environmental friendly.


  RECOMMENDATION:

  • Chemicals/Ingredients should be clearly indicated on labels / packaging to inform customers of possible side effects / correct use of products.
  • Implement cost effective measures to dispose of medical waste.
  • Implement recycling measures to prevent pollution of the environment / Use packaging that is re-usable /recyclable.