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Hello,
In analyzing the business performance of my selected organization, can I just do a SWOT analysis or I must use 2 business models. Say a SWOT analysis and a PESTEL or Porters 5 forces?@glynnwaindim The answer to your first question – in a word yes you don’t have to do 2 provided it is done very well. However I would recommend both a SWOT and a PESTLE for Topic 8 as you should be linking the factors from both of these to your financial analysis.
The SWOT influences the business and strategic decisions of the management and the PESTLE impacts on various components (e.g. consumer spending, the need to produce updated models in the product range that type of thing) and therefore may influence the direction of the organisation. I always think a Porters 5 forces is of less help in this respect.
Thanks for your reply sir, so are you saying if I carry out just a SWOT analysis without a PESTEL or Porter 5 forces i would not be able to pass my research?
@glynnwaindim – Madam actually!!! 🙂
I am saying: do your models first – preferably SWOT and a PESTLE (the Porter’s is of limited use for Topic 8 in my opinion). Most students do very badly on Evaluation and Analysis (this and referencing are the usual causes for failing) and the reason for this is that they just think they have to calculate a ratio and comment that XYZ’s gross profit figure etc is greater/smaller than ABC’s. They also just churn out a model to ‘tick the box’ rather than think about why they are asked to do so. This is totally the wrong approach and routine analysis is inadequate for a pass.
Instead when you do your models, do them well and then you can apply these to the financial results. Read the CEO / directors reports and reflect on the SWOT and PESTLE factors. You are then more likely to be able to understand and to EXPLAIN what lies behind the companies’ performances (their strategic decisions and the environmental factors in short) and this will help you with your evaluation. So doing good models helps focus you on what evaluation really means in practice and how companies build on their strengths etc and deal with changes in the environment.
This approach supplemented by relevant articles from the business press is more likely (provided you have done your referencing well and presented clear graphs and a good layout) not only to pass but to get you a good grade. If you only do a SWOT and miss out the PESTLE or v.v. in my opinion (to cite my good friend and fellow moderator, @bassaniobroke) you are riding a bike with only one wheel – why do that when two wheels are available??
Hello,
please if my research is based on the business performance of Volkswagen, when analyzing the business performance using the SWOT and the PESTEL, am I to focus only on the German market since Volkswagen is a German company or am I required to look at Volkswagen global performance in markets such as UK, China, USA since Volkswagen has operations in those other countries??@gwain Apologies for not answering sooner – This depends whether you are analysing at company or group level for the organisation. You need to be consistent through. I would have thought that global level was better for the SWOT etc as most car companies compete at a global level. At the German company level wouldn’t this be Volkswagen GmbH – and difficult to find a comparator for?
Pls ma how do I link my swot and pestle together am confused could u pls give an example for more clarity bless u ma
@stevr – you don’t necessarily link the SWOT and PESTLE with each other (although it is possible that in some circumstances an environmental factor such as Technology may present an Opportunity or indeed a threat etc) it is linking the SWOT and PESTLE to your actual evaluation and analysis that is critical
Please re-read the answers above and consult my article on Evaluation and Analysis on our homepage http://www.opentuition.com/obu
where I discuss this in more detail and try to demonstrate such linkage in my commentary on Laura Ashley
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i am having problem in ratio calculation. there is difference between my calculated ratios and company,’s calculated ratios so what i should be doing now
@aneeta – Yes this sometimes happens and I suggest that you mention this in your limitations section. It is probably better to use your own as at least you know what figures you have included. However if the differences are small then do not worry unduly or if there is a specific reason why the numbers may be different (remember that sometimes companies need to restate their own figures occasionally). Be consistent if you use your own calculations for the main company then you need to use the same basis for your comparator.
Ma for my swot and pestle analysis should just state them or I explain them well thanks ma u are great.
@stevr – you must also apply them in the context of your company otherwise you will fail on Application of Business and accounting models’. You should also draw heavily on these models when doing your evaluation as I explain in the article on Evaluation & Analysis on our homepage http://www.opentuition.com/obu
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