CREATING A STRATEGICBUSINESS PLAN USINGPESTLE ANALYSIS

An Academic presentation by Dr. Nancy Agnes, Head, Technical Operations, Tutors India Group  www.tutorsindia.comEmail: info@tutorsindia.com

Introduction

Conducting a PESTLE Analysis

Political

Economic

Social

Technological

Legal

Environmental

Conclusion

OUTLINE Today's Discussion

A key management approach that is effectively being usedwithin most modern organizations is Strategic Planning.

It has continuously enjoyed top rankings amongst five ofthe most popular approaches that have been adopted bymanagements across the globe .

INTRODUCTION

Typically, it has been considered as an approach adopted to formulate strategy,strategic planning comprises of components such as; a) evaluation of the mandate ofthe organization, values and mission, b) analyzing an organization’s internal andexternal environment, and c) identifying strategic issues on the basis of such analysisand developing strategies, plans and goals to tackle any issues .

When an organization is keen to realize a preset goal, it is expected to formulate aneffective strategy to achieve it.

The strategy has to be such that it establishes priorities, fixes a time duration,allocates resources, formulate mechanisms for control, allocate human resources andit also needs to comprise of guidelines as to the manner in which every aspect will betackled to realize a particular goal in the most appropriate manner.

Though the organization might be very reputed, would be having a skilled andcommitted team, the question here would be whether any strategies formulated mightbe of use or not? It’s quite simple, all the organization needs to do is conduct a

PESTLE analysis

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CONDUCTINGA PESTLEANALYSIS For those who are clueless, a PESTLE analysis essentially

would refer to executing an audit of an organization’senvironment which facilitates the process of planning andhelps in arriving at strategic decisions.

It is understood that in case an organization is in a positionto audit their present environment and evaluate probablechanges, they will be in a better position than theircompetitors to respond to changes .

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The analysis would generally determine the most probable events that might have animpact on the organization.

Each of the factors from PESTLE – Political, Economic, Social, Technological, Legal,Environment would have an impact on the business plan.

This factor would present the manner and level to which thepolitical environment of a region would impact the economyand some organization.

This might be at the local, state or national level.

Existing considerations within the market that might influencethe organization would comprise of factors such as; probablechange in government, instability in the government owing tothe balance of power, altering policies of business andsuperannuation, laws pertaining to tax, labour related laws andtrade limitations.

POLITICAL

This factor would pertain to aspects that are distinct to the economy and have adirect impact on the organization.

Factors that could influence the strategic plan of an organization wouldcomprise of rate of interest, rate of exchange, rate of inflation, prices ofproperty and economic growth as well.

Economic aspects would also refer to economic factors of the organization’sgeographic area.

ECONOMIC

This factor essentially comprises of demographicfactors which would be inclusive of rate of growth ofpopulation, gender and age distribution ofpopulation, cultural facets and changes in socialbehaviours.

For instance; lately social media is being extensivelyutilized to discuss about products and services.

Several of these aspects might make an impact on themanner in which organizations conduct theirbusinesses with their customers and the techniquesused for interacting with them.

SOCIAL

The technological factor would refer to the rapid changes that occur in the domain oftechnology, technological research and development initiatives and automation.

Such factors are instrumental in driving decisions for outsourcing, efficiency and qualityconsiderations.

For example; use of smart phones, artificial intelligence, emergence of location basedsearching, skype meetings or mobile internet for that matter.

Over the period of the past three decades, the massive changes that have occurred inthe domain of technology has hugely impacted all industry sectors and the speed andlevel that this will occur only stands to show an upward trend.

TECHNOLOGICAL

Legal factors would pertain to every law that is directly linked withthe organization and their domain of activity.

For instance; laws on privacy, consumer protection laws,employment laws and laws against discrimination could certainlyinfluence some aspects of an organization.

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LEGAL

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The environmental factor draws reference to every factorthat is directly linked with, determined or influenced on thebasis of the natural environment where the organizationis located.

This would comprise of weather and natural disasters,climate changes, geographical position and sustainability.

For instance; if the location where the organization issituated is subject to extreme weather conditions, it woulddefinitely make a negative impact on the organization.

ENVIRONMENTAL

All the above said factors are intricately associated with thebusiness and it would do well for an organization to carry outan PESTLE analysis.

The analysis will help them to understand their externalenvironment and then they can formulate strategies to tacklethem while creating their strategic plan.

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CONCLUSION

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