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Change in buisness

Change in business

Environmental factors that influence organizations  

Macro-environment 

Micro-environment 

social 

organization 

Legal, ethical and taxation 

customers 

economic 

suppliers 

political 

competitors 

Technological 

intermediaries 

competitive 

Public at large 

 

Strengths, weaknesses, opportunities, and threats 

Organisations use SWOT Analysis to make the most of resources to the best advantage. 

They also can reduce the chances of failure, by understanding what is lacking, and eliminating hazards would otherwise go un-noticed. Organisations use PESTLE analysis and then SWOT analysis to maintain effective strategies and precipitate change, but depending on who they are; for different visions, objectives, and goals. 

 

Commercial organisation’s often use PESTLE as a marketing research tool as they endeavour to maintain competitive advantage and maximise profit. 

 

Factors that drive change 

PESTLE (external) 

Political – shift in government priorities, change in government, war 

Economic – meeting new funding/revenue streams, recession, inflation, consumer trends 

Social – change in human behaviour, market/social trends, remote working, cultural expectations 

Technological – emerging technologies, innovation/efficiency, AI, new payment methods 

Legal/regulatory - new legislation, removal of EU (European Union) legislation 

Environmental – pandemic, sustainability, green energy, reduction in carbon footprint 

 

SWOT vs PESTLE 

Pestle is a way to assess the external environment around a business when conducting strategic planning. This allows business leaders to predict if the market will be receptive to the businesses brand, products, and services. Firms often perform this type of analysis each month, quarter, or year.  

Whereas SWOT analysists are used to evaluate the primary aspects of a business when conducting strategic planning. This allows business leaders to estimate weather a business model, idea, product, and/or service could be profitable in the current market. This is useful for considering the current state of a business and taking measures to protect assets, overcome issues and prevents unexpected situations. Companies usually conduct these assessments regularly, every month, quarter, or year. 

Some companies use both methods in their research, planning and discussion efforts. Same of the main differences between the two are 

  • Focus – PESTLE analysis focuses on external factors in public society. these are constantly changing factors and often out of the businesses control. This type of analysis is helpful when a business wants to keep up to date with technological advancements, social trends, economic conditions, and governmental policies. In contrast SWOT analysist includes an examination of the internal business factors of strength and weaknesses. By using this type of assessment businesses can understand their own position and advantage within the broader public sphere. They can also measure external factors and consumers markets. 

  • Usability to investors - PEST analysis is helpful to managers, team members and internal stakeholders. By adapting to external conditions, a business can support employee productivity and well-being, stay relevant and maintain customers. SWOT analysis, though, can be more useful in situations with investors. This is because this framework highlights essential information about the business itself. Instead of wanting to learn about external factors like politics and technology, investors who are considering funding a business typically want to know about the business model, management system, plan, and goals. By conducting SWOT analysis and discussing the strengths, weaknesses, feasibility and profitability of the business, business founders and leaders can deliver compelling pitches to investors to gain capital. 

  • Consideration of weaknesses - In many situations, investigating the weaknesses of a business can aid managers in making effective, lasting improvements. Whether it is processes, training, task delegation or other areas, optimizing business strategies and methods can support employee morale and productivity and increase success. While PEST analysis highlights forces outside of a business, SWOT analysis encourages leaders to examine and fix weaknesses. Doing this provides numerous benefits for supervisors, team members and customers. 

 

 

Organizational response to change 

  • Causes of change are Internal and External 

  • Changes can be categorised as Incremental or Step change 

  • Step Change is far more likely to be resisted 

 

Change management - drives the successful adoption and usage of change within the business. It allows employees to understand and commit to the shift and work effectively during it. Without effective organizational change management, company transitions can be rocky and expensive in terms of both time and resources. 

  • New or improved digital systems for hardware and/or software (for example DVLA system, NHS referrals, online banking) 

  • Training needs analysis 

  • Restructuring of priorities and resources 

  • New or amended: 

                                policies (for example updated health and safety, due to changes in legislation) 

                                business processes (for example implementation of new digital technologies) 

                                products or services (for example innovation for new markets) 

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