PESTLE Analysis: The Business Model

A researcher chooses a company based on his area of interest, the objective of his research, the industry sector he need to focus, the issues to be discussed, the business model to be evaluated, the companies in the nearby location, the functional area or specialization he wants to focus, the management theories he wants to test, the easiness of collecting required data etc. The researcher can choose either local or national or international companies for his analysis. Based on surveying the companies available in a chosen industry functioning in his location where he has accessibility to collect data and information, or by collecting information about the business and strategies from the company website and from various other sites. The researcher

SWOC analysis framework [14-16] is a used to identify the internal factors that influence an organization’s performance. It identifies the Strength, Weakness, Opportunities and Challenges of the Company for its present and future sustainable business.

PESTLE analysis framework [17-18] is a useful method to identify the external factors that influence an organization. It describes the challenges and opportunities of the company for its sustained business based on Political, Economic, Social, Technological, Legal and Environmental factors.

ABCD analysis framework [19-30] is an effective and integrated method for factor and elemental analysis based on different internal and external issues using four constructs namely advantages, benefits, constructs, and disadvantages.

Financial analysis discloses the financial health of the company and hence its sustainability and ability on investment on future

The given individual company’s performance may be better or worse than the industry it belongs as a whole. Understanding the industry or multiple industries where the company competes is essential to develop a baseline for understanding the external conditions and competitions the company is facing currently and in the future. This can be analysed by using Michael Porters’ five forces framework. The five forces analysis simplifies an industry’s competitive environment and it’s profitability. The five basic forces are: (1) Bargaining Power of Customers. This affects the profitability of a given industry. The various factors like the ease with which customers can switch to the competitor’s products, the price sensitivity of the customers, the volume which buyers command are deciding the bargaining power of customers. (2) Bargaining Power of Suppliers : This includes the concentration of suppliers to an industry compared to the concentration of firms in that industry, the ease of switching away from the industry, the availability of substitute products, the price sensitivity of firms in the industry to input prices, and the ability of suppliers to integrate downwards. (3) Threat of New Entrants : The factors required to face such threat includes high capital investment, a steep long learning curve, high brand equity for existing players, tight government regulation, high switching costs, and constraints in access to resources. (4) Threat of Substitute