Journal Entry (Week 6) - External Analysis

Questions

1. What is meant by the term „External Analysis‟? What is the purpose of „PESTLE‟ analysis?

2. Read the article about Big Mart Super Store – what external issues are the Super Markets would have to consider at this time to have competitive advantage over others? http://www.ekantipur.com/2012/08/01/business/big-mart-to-open-seven-stores-in-kathmandu-by-2012/358057.html

3.Discuss your preparations for the Activity Week field work. Have you arranged to meet your group? Have you been to the Big Mart before? How are you planning to record your data?

An organization is constantly affected by broad environmental factors. This impacts the organizational performance and effectiveness. Thus, company's management should examine these factors to understand the dynamics in which the organization is operating.

External Analysis:

An organizations business environment encompasses Internal and External environment. as shown in Fig.1. Through Internal analysis we identify the strength and weakness of a firm while the external analysis helps to identify the industry opportunity and threat.

External analysis refers to the analysis of Macro (General environment) and Meso (Industry environment) so as to understand the key drivers for change affecting the organization. The data thus collected will be useful in deducing strategies for the organization. 

Fig 1: Business Environment

PESTLE Analysis:

The purpose of PESTLE Analysis is to identify the key Macro environmental factors that are likely to impact the organization. PESTLE stands for political, economical, Sociocultural, technological, environmental and legal factors. 

Fig. 2: PEST Analysis

The above fig. 2 depicts the points to consider while conducting the PESTEL analysis for Macro environment.

PESTLE Analysis of "BIG MART Super Store"

Activity Week Field Work:

Our group of five has decided to meet up on 16th December for the activity week field work on “Competitive analysis of Big Mart”.

Questionnaires for environment component of PESTLE analysis are:

•  What is your organizational culture?? For e.g.- dress code?

•  How is the staff morale in your organization?

•  Are the staffs enthusiastic, active and polite to customers?

•  How is the Management attitudes- department wise

•  Is there a need to reduce storage needs by big mart

I will be recording my data through video of interviews, survey answer for questionnaires. I will also use literature reviews and web references as further research aid. 

Reference:

The macro environment for business. Hotelmule. Available at: http://hotelmule.com/management/html/38/n-2938.html [Accessed on: 10 December, 2012]

External Analysis. My strategic plan. Available at: http://mystrategicplan.com/resources/external-analysis/ [Accessed on: 10 December, 2012]