Business: Introduction and Analysis, PESTEL and SWOT
Introduction to Business:
Business is an enterprise of making money through manufacturing and selling goods or services. In order to do business, it is not necessary to have a company or corporation or any other organization, but a person can also earn money by his small earning activities like auto Dealing, Blogging, Personal Assistance, Wedding Planning and others. Such type of business is called One-Person Business.
It is a process of identifying business requirements, risks, upcoming problems and its solutions. The person who performs this task is called business analyst. Business Analysis is required as it aware the business owners from the upcoming issues so that they could find the appropriate solutions. Business Analysis can be done through many techniques, the most used techniques are as follows:
- SWOT Analysis: In this technique, SWOT refers to Strengths, Weaknesses, Opportunities and Threats. These are the elements of SWOT Analysis. Therefore, this analysis is used to examine the strengths, weaknesses, opportunities and threats regarding the business of an organization or an individual. The information obtained by SWOT Analysis helps the business owners to achieve their desired objectives and the competitive advantages.
Elements of SWOT Analysis:
- Strengths: The business analyst first evaluates the substantial resources of the organization that provide successful outcomes. The information received from this assessment helps the business owners to know how they are better than their competitors.
- Weaknesses: After the evaluation of strengths, the business analyst examines those resources which obstruct the successful outcomes. Such information helps the business owners to understand what their organizations need for the improvement.
- Opportunities: Through this element, the business analyst examines what market trends could help to increase the sales of the organization. Opportunities are those external factors that provide the business growth.
- Threats: Threats are also external factors, such factors jeopardize the success of the organization. Therefore, along with all other elements, threats are also required to be analysed by the business analyst.
In this way, SWOT Analysis is beneficial to the business owners as it helps to achieve the competitive advantages and the business objectives.
- PESTEL Analysis: It is a framework which is used to analyse the external factors that create an impact on the business organization. Here the word PESTEL refers to Political, Economic, Social, Technological, Environmental and Legal. These factors are as follow:
- Political Factors: The government intervention in the economy affects the business of an organization. The Political factors include Government Policy, Tax Policy, Political Stability and Instability in the Market, Foreign Trade Policy and so on. In order to grow a business, it is required for the business owners to adjust their marketing policy according to the government policies and legislation of the country.
- Economic Factors: These factors have a significant impact on the business. The Economic Factors include Interest Rates, Exchange Rates, Disposable Income of the Consumers, Economic Growth and so on. These factors are required to be taken care by the business owners while determining the future values of their business.
- Social Factors: The attitudes and interests of the population also affect the business of an organization. Social Factors include Population Growth, Health Consciousness, Age Distribution and so on. These factors help the marketers to understand the requirements and interests of the people so that the business owners could grow their business accordingly.
- Technological Factors: Owners of the organizations use the Technological Factors to determine new ways to produce and distribute goods and services. These factors are useful for the better communication to the target market also. Technological factors include 3D Technology, Automation, Wireless Charging, Engine Efficiency and so on.
- Environmental Factors: There are some Environmental Factors that also affect the business of the organizations. These factors are Environmental Pollution, Deficiency in Raw Material, Carbon Footprint Target, Geographical Location and so on. These Environmental issues are faced by the business owners while manufacturing and distributing goods and services.
- Legal Factors: Each nation has its own rules and legislation. Therefore, it is essential for the business owners to take care of these rules while spreading their business in other countries. Legal Factors include Consumer Law, Health and Safety Law, Copyright Law, Fraud Law, Employment Law and so on.
In this way, these above analysis techniques are highly essential for the business owners to grow a business and also to achieve competitive advantages.
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