Business Analytical Tools
Business Analytical Tools
Business Analytical Tools
Analysis is the process where you divide a complex topic into smaller parts to gain better understanding of the discussed topic, for a better and an effective way in analyzing anything, an analytical tool exists for such purpose. An analytical tool is a tool used to gain more information about a specific topic or substance; since it is a way to measure how effective something can be (cwemf). Based on what is mentioned above, analyzing the market must be any entrepreneurs first step in order to set up his business; how to develop the company? Who are the competitors? and other questions that will develop the business in a better way.
“Business is like a war; easy to begin, hard to stop and you always need a good plan to win it” (Aruni). In order to start up a new business studying the market from different perspectives can lead any business or firm to succeed. Planning is an imperative step for a business to survive. It is needless to say that planning and evaluating are necessary steps for a business to succeed. Business market analysis help companies learn what the current trends are, how the business will work on for the upcoming years and how can the company stay afloat in the market storm today.
It has always been important for a business to know and understand how it fits in and interacts with the surrounding environment from both an internal and external view. The most influential way of doing this is to perform a SWOT analysis of the company; it is a phrase used to abbreviate strengths, weaknesses, opportunities and threats of the company. Strengths are what provide an insight to the business opportunities. On the other hand, weaknesses in the business can cause immediate threats. Strengths are the resources that the firms have and the capabilities that can be used as basis for developing, they also mean the advantages that the business has. Weaknesses exists in the company if it loses any of its strengths, weakness can also be defined as whatever runs badly in the firm, or whatever has to be avoided in the future. Opportunities are mostly related to what is related to the external environmental analysis that can lead the business into more profit and growth, opportunities are the chances that the firm has and others do not. Threats can be defined as the obstacles that rise as a result of the changes in the external environment as bad debt or cash flow problems (Bradford. Duncan. Tracy), (erc).
PESTLE is another useful tool for understanding the business situation as a whole, “and is often used in conjunction with a SWOT analysis to assess the situation of an individual business” (Marketing Minefield). It differs from the SWOT by allowing only one aspect of strategic analysis –external environment- but not concerned with the organizations internal environment or in its strengths or weakness. PESTLE stands for political, economic, social, technological, legal and environmental. Current and future taxation policies, grants, funding, initiatives, trade bodies and even wars and how they will affect relations between countries all can go under the political meaning. Economic means overall economic situations. Lifestyle patterns, changes and attitudes towards issues such education and the environment is what goes under the sociological term. Technology is all relevant current and future technology innovations. Legal in its different areas such as employment, competition, health and safety. Environmental which expresses different attitudes to the environment from the government, media and consumers. The shorter version is a PEST Analysis – missing out Legal and Environmental factors. (Charter).
One of the key tools any business analyst can use in exploring strategic planning is the M.O.S.T Analysis. MOST helps to clarify the business