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Porter & PESTEL Analysis

Businesses must serve a market, but the market is always changing. From time to time, managers must assess the business landscape to determine whether they are serving the most opportune needs in the best ways and in terms of how they compare to their competition. This Milestone Activity analyzes business trends and power of competitors to gauge where opportunities and threats may arise. This practice can help you to maneuver an organization to a better competitive position in the future and will be included in the Final Assessment Project.

What do I want you to do? 

This activity scans the external business environment for factors that could meaningfully influence strategy. The focus is on business trends and power nodes within the sector.

PESTEL Trend Survey

Research to find 10 meaningful trends or shifts of trends in the world of business today that could potentially affect the company you selected in the previous module. Remember, trends are patterns of action over a period of time. For this exercise, it would be helpful to identify trends that show a pattern of at least 3-5 years. Just as it is important to note trends, shifts in trends are also something meaningful to consider when planning strategy. For this exercise, consider shifts that have happened within the last 1-3 years. Obtain at least five trends and at least five shifts of different types.

Rank the trends one (most meaningful) through five (least meaningful) and identify which of the six PESTEL dimensions best categorizes the trend (political, economic, social, technological, environmental, or legal). When making your selections, avoid selecting more than one of any particular type.

Rank the shifts of trends one (most meaningful) through five (least meaningful) and identify which of the six PESTEL dimensions best categorizes the shift of trend (political, economic, social, technological, environmental, or legal). When making your selections, avoid selecting more than one of any particular type.

1. Include at least one reference that supports each trend and at least four total references because it is important not to get all of your information from the same source since it could create a biased perspective.
2. Porter’s Five Forces Analysis
3. Distinguish competitors and substitutes – find three companies that can be considered competitors offering the same products or services as your company, and then, find three companies that can be considered substitutes offering a product or service that would be an alternative to your company’s product or service.
4. Analyze whether competitors have more power in your industry than your company by asking these questions:

Are there many competitors?

Are there larger competitors?

1. Are competitors’ offerings or strategies difficult to differentiate from each other?
2. Can customers switch between competitors easily?

Analyze whether substitutes have more power in your industry than your company by asking these questions:

1. Are there few substitutes with larger market share?
2. Are substitutes’ offerings cheaper or of better quality?
3. Can customers switch between substitutes easily?
4. Identify three new startups in the industry of your selected company.
5. Analyze whether startups (new entrants) have more power in your industry than your company by asking these questions:

Are there low barriers to entry?

1. Is there a lack of economies of scale?
2. Is there a lack of intellectual property?
3. Is there a lack of brand loyalty?
4. Analyze whether suppliers have more power in your industry than your company by asking these questions:
5. Are there few suppliers?

Are suppliers’ supplies difficult to differentiate from each other?

1. Is it difficult for companies to switch between suppliers?
2. Is it difficult to find substitutes for these supplies?
3. Analyze whether customers (buyers) have more power in your industry than your company by asking these questions:
4. Do many customers group together for collective action?
5. Are there few, big spending customers that constitute a large proportion of the income?

Are competitors’ offerings difficult to differentiate from each other?

1. Can customers switch between competitors easily?
2. Are customers price-sensitive?
3. Rank the five industry groups based on how much power they have in the industry.
4. Why do I want you to do it? 
5. Understanding the business landscape helps in identifying unmet needs in the market, which is a fundamental necessity for a business. Without needs to meet, the business has no customers for its good or services. Strategists need to develop a keen eye to capitalize on these opportunities. In addition, scrutinizing the competition helps to find ways to improve your business and find potential ways to catch up, keep up, or gain an advantage.

How do I want you to do it? 

1. What format(s) should the assessment be in?
2. List the trends in a numbered form with included citations. Start each entry with the PESTEL category they exemplify after their numerical ranking. Then, list the shifts in the same manner in a separate list.
3. Copy the Porter’s Analysis questions and put them in bold font, and write your answers after them in regular font. Cite any sources you use to support your judgments with parentheticals and a reference list at the end of the document in APA 7 form.
4. What tools or resources might be needed/useful?
5. Review Kennedy et al. (2020) Sections 3.3 & 3.4.
6. Porter’s and PESTEL analyses are common; therefore, there are abundant non-credible results that appear in simple web searches using those terms. Be careful to analyze the credibility of your sources so that you do not choose personal blogs or cheat sites for support. Ask your instructor if you question the credibility of any of your sources. It is disingenuous to copy your analyses from one you find completed online.