SENIOR HIGH SCHOOL
SHS TNC12: Trends, Networks, and Critical Thinking in
the 21st Century
LESSON 2: Apply Strategic Analysis.
HAND OUTS
SWOT (strengths, weaknesses, opportunities, threats)
is a technique for assessing these four
aspects of business and organization
(Mindtools.com, 2021).
SWOT analysis is divided into two
categories: internal factors
(strength and weaknesses) and
external factors (opportunities
and threats)
Internal factors, strengths are the characteristics that give the business and
organization its competitive advantage, while weaknesses are characteristics
that a company or organization needs to overcome in order to improve its
performance.
External factors referred to opportunities which are elements that the company
or organization sees in the external environment that it could pursue in the
future to generate value. Threats are elements in the external environment that
could prevent the company or organization from achieving its goal or its mission
or creating value (definition adopted from CorporateFinanceInstitute.com, 2021).
PESTLE (political, economic, social, technological, legal and environmental)
analysis
PESTLE analysis, which is sometimes
referred to as PEST analysis, is an
original concept in marketing principles. It
gives a bird’s eye view of the whole
environment from many different angles that one wants to check and keep a track
of while contemplating a certain idea/plan (PestleAnalysis.com, 2021).
It allows a company and organization to form an impression of the factors that
might impact a new business or industry (Green, 2018). PESTLE is a technique for
understanding the various external influences on a business and organization
(Corporate Finance Institute, 2021).
A PESTLE analysis allows a strategic and systematic evaluation of a business's
prospects, risks and opportunities in a new environment. While a SWOT analysis
concentrates on a company's internal processes, PESTLE provides information on
external factors and both University of Sydney and Oxford University explains
through the following:
Political Factors These determine the extent to which government and
government policy may impact on an organization or a specific industry. This
would include political policy and stability as well as trade, fiscal and taxation
policies too.
Economic Factors These factors impact on the economy and its performance,
which in turn directly impacts on the organization and its profitability. Factors
include interest rates, employment or unemployment rates, raw material costs
and foreign exchange rates.
Social Factors These factors focus on the social environment and identify
emerging trends. This helps a marketer to further understand their customers’
needs and wants. Factors include changing family demographics, education
levels, cultural trends, attitude changes and changes in lifestyles.
Technological Factors These factors consider the rate of technological
innovation and development that could affect a market or industry. Factors
could include changes in digital or mobile technology, automation, research and
development. There is often a tendency to focus on developments only in
digital technology, but consideration must also be given to new methods of
distribution, manufacturing and also logistics.
Environmental Factors These factors relate to the influence of the
surrounding environment and the impact of ecological aspects. With the rise in
importance of CSR (Corporate Sustainability Responsibility), this element is
becoming more important. Factors include climate, recycling procedures,
carbon footprint, waste disposal and sustainability.
Legal Factors An organization must understand what is legal and allowed
within the territories they operate in. They also must be aware of any change in
legislation and the impact this may have on business operations. Factors
include employment legislation, consumer law, health and safety, international
as well as trade regulation and restrictions. Political factors do cross over with
legal factors; however, the key difference is that political factors are led by
government policy, whereas legal factors must be complied with.
Ethical Factors The most recent addition to PESTEL is the extra E - making it
PESTELE or STEEPLE. This stands for ethical, and includes ethical principles and
moral or ethical problems that can arise in a business. It considers things such
as fair trade, slavery acts and child labor, as well as corporate social
responsibility (CSR), where a business contributes to local or societal goals
such as volunteering or taking part in philanthropic, activist, or charitable
activities (Professionalacademy.com, 2021).
Porter’s Five Forces Framework
strategic analysis model that helps
to explain why various industries
are able to sustain different levels
of profitability. The model was
published in Michael E. Porter's
book, "Competitive Strategy:
Techniques for Analyzing Industries
and Competitors" in 1980. The five forces are frequently used to measure
competition intensity, attractiveness, and profitability of an industry or market
(Investopedia.com, 2020)
Porter's Five Forces is a framework for looking at the strength of five important
factors that affect competition - potential entrants, existing competitors, buyers,
suppliers and alternative products/services. Using this model, you can build a
strategy to keep ahead of these influences.
Competition in the industry The first of the five forces refers to the number
of competitors and their ability to undercut a company. The larger the number
of competitors, along with the number of equivalent products and services they
offer, the lesser the power of a company. Suppliers and buyers seek out a
company's competition if they are able to offer a better deal or lower prices.
Conversely, when competitive rivalry is low, a company has greater power to
charge higher prices and set the terms of deals to achieve higher sales and
profits.
Potential of new entrants into the industry A company's power is also
affected by the force of new entrants into its market. The less time and money
it costs for a competitor to enter a company's market and be an effective
competitor, the more an established company's position could be significantly
weakened. An industry with strong barriers to entry is ideal for existing
companies within that industry since the company would be able to charge
higher prices and negotiate better terms.
Power of suppliers The next factor in the five forces model addresses how
easily suppliers can drive up the cost of inputs. It is affected by the number of
suppliers of key inputs of a good or service, how unique these inputs are, and
how much it would cost a company to switch to another supplier. The fewer
suppliers to an industry, the more a company would depend on a supplier. As a
result, the supplier has more power and can drive up input costs and push for
other advantages in trade. On the other hand, when there are many suppliers
or low switching costs between rival suppliers, a company can keep its input
costs lower and enhance its profits.
Power of customers The ability that customers have to drive prices lower or
their level of power is one of the five forces. It is affected by how many buyers
or customers a company has, how significant each customer is, and how much
it would cost a company to find new customers or markets for its output. A
smaller and more powerful client base means that each customer has more
power to negotiate for lower prices and better deals. A company that has
many, smaller, independent customers will have an easier time charging higher
prices to increase profitability.
Threat of substitute products The last of the five forces focuses on
substitutes. Substitute goods or services that can be used in place of a
company's products or services pose a threat. Companies that produce goods
or services for which there are no close substitutes will have more power to
increase prices and lock in favorable terms. When close substitutes are
available, customers will have the option to forgo buying a company's product,
and a company's power can be weakened.
Soar Analysis
is a strategic planning tool that
helps the enterprises to focus on
the current opportunities and
strengths, and create a vision
for the aspirations in the future
and the outcome of the results
that they will bring.
SOAR analysis is a contrast to the SWOT analysis and utilizes appreciative
inquiries to concentrate on the strength of the business. It does not shift its focus
on the internal weaknesses or threats that may not eventuate. SOAR analysis
offers a foundation for the in-depth analysis of the business implementing other
tools (Priyanki Baruah, 2019).
Intuition
form of knowledge that appears in consciousness without obvious deliberation.
Hunches (kutob) are generated by the unconscious mind rapidly sifting through
past experience and cumulative knowledge.
Intuitive thinking
kind of thinking that helps understand reality in the moment, without logic or
analysis relying to signs and sensations. Most of the time, it goes against
whatever we might think of as “rational” (Exploring your mind, 2018).
The power of intuition
- Seshadri 2019
● Logic lives within the framework of the conscious thought and is linked to the
information gathered through the five senses, sourced either directly or
indirectly. Through logic, we cannot explain or explore the sixth sense of
intuition.
● In 2019, Niranjan Seshadri of Mind and Soul elaborately discuss the power of
intuition. Evolution of individual consciousness passes through three steps that of
instinct, intellect, and intuition. Intuition is beyond the boundaries of the
material, physiological and psychological layers of our being. Research on the
areas of the brain linked to intuitive perception is ongoing.
● Intuition is highly subjective, coming in a flash and disappearing just as quickly.
If our awareness is not in the present, we may not register information coming
through the portal of intuition. Instinctual behavior comes through an impulse
that is triggered by something external, and it is a lower brain function. The mind
is quick to pounce on a 'gut feeling' and offer its analysis and commentary.
● The right milieu is needed for the spark of intuition to ignite the mind with new
insights. Since intuition comes from the inside and not through information
derived from the world through the five senses, it is reasonable to conclude that
a clear and empty mind is a requirement to receive such insights. There is no
defined pathway or coursework to enhance this potential ability of extrasensory
perception.
Mastering the Intuitive thinking (Thomas Oppong, 2018).
Intuitive thinking is an unconscious process for rapid action, judgment, and
decisions. Most decisions we make are automatic. Our brain develop unconscious
habits for handling situations over time. Our intuitions have been finely honed
over evolutionary history for making quick decisions mostly in the social realm.
Using intuition, we translate our experiences into judgments, responses and
actions. You rely on intuition when you make decisions without concrete proof,
scientific facts, psychological evidence, or active reasoning.
Intuition helps us create expectations, connect the dots, flag inconsistencies and
warn us of potential problems. Albert Einstein has been widely quoted as saying,
“The intuitive mind is a sacred gift and the rational mind is a faithful servant. We
have created a society that honors the servant and has forgotten the gift.”
Intuition could be called “knowing without knowing why”, “thinking with your
heart” or “gut feeling”. It is this unseen force that drives us. Your rational mind
serves your intuition. Trust your gut, but it pays to think. Take a dive but
consider other possibilities. Check your hunches.
Intuition is fallible. Your mind excels at holding onto inaccurate beliefs and faulty
biases. To get unstuck from a stubborn mindset, give yourself time to form a
different story or better still invoke your rational mind. Intuitive people slow
down enough to hear their inner voice. A key to harnessing intuition is to observe
patterns, argues Professor Gary Klein, author of The Power of Intuition: How to
Use Your Gut to Make Better Decisions at Work. Patterns include routines for
responding, known as “action scripts,” he says. Intuition helps us decide how to
react, and analysis ensures our intuition won’t mislead us. When you’re intuitive
you naturally become more observant and aware of your surroundings. As a
result, you will tend to make fewer mistakes, which improves your ability to
make decisions throughout the day.
Practicing Intuitive thinking Signs and symbol in everyday life allows us to
understand intuitive thinking processes. Norms play a vital role in mastering
intuitive thinking due to pattern of practices perform as part of values, tradition
and cultural way of life. Some of intuitive thinking practices are already
manifested as part of our daily life such as, but not limited to the following:
1. Recognizing stoplight and pedestrian lane in avoiding transportation accident.
2. Giving respect to elders by saying ‘po’, ‘opo’ and performing hand bless
gestures.
3. Home practices not arguing using high pitch voice tone to our parent and
elders as respect to authority.
4. Respecting environment through no littering practices.
5. Running due to dog fear as a defense mechanism
6. Respecting individual belief and religion
7. Respecting difference in some cultural practices such as celebrating fiesta,
birthday and belief to ‘aswang’, lucky charm and among others.
8. Non conformity to corruption and red tape in the government processes
9. Respect to human rights and right to life base on moral principle.
10.Avoiding use of illegal substance such as drugs because it is taboo.
11.Respect to women and children as part of vulnerable sector
12. Immediate response to people asking help
13. Sudden hesitation to some of transaction as probable danger especially in the online
based on gut feel.
14. Wearing of facemasks and face shield as health protective equipment in avoiding
health danger.
15. Saying of ‘excuse me’ before interfering in a meeting or you’re passing by.
16. Reporting accident to proper authority for immediate assistance.
17. Non conformity to racial, origin and gender discrimination
18. Social practices of the concepts ‘awa’ and ‘hiya’ as a means of righteousness in
community way of life.
19. Social practices of ‘pakikidamay’, ‘simpatya’, ‘bayanihan’ and ‘pakikisama’ to people
and community.
20. Respect to laws, rules and order implemented in the society as concept of right and
wrong.
