Week 6

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

External analysis is the analysis of all the factors outside the organization which provide opportunity or pose threats to the organization. The external factors of the organization consists of individuals, groups, agencies, organizations, events, conditions and forces with which the organization comes into frequent contact in the course of its functioning (I. o. C. A. o., 2010).

The term "PESTLE" analysis is used to describe a framework for analysis of external environmental factors. PESTLE analysis involves identifying the political, economic, socio-cultural, technological, legal and environmental influences on an organization and providing a way of examining the environment influences that have affected or are likely to affect an organization or its policy (I. o. C. A. o., 2010).

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?

External issues that Big Mart Super Store would have to consider at this time to have competitive advantage are:

Political factors: With increasing number of strikes by different political parties, it would be hard for Big Mart to operate their store efficiently. There might also be pressure from trade unions associated with various political parties.

Economic factors: As Big Mart is planning to open seven new stores within the city they might require more capital which means they might take loans from some financial institutions and with the increase in rate of interest they might bear some extra pressure.

Socio-Cultural Factors: As they are trying to cater the demand of people from all the economic groups they must bring different varieties of products. Likewise, they must be diversifying the products so that every age group people could consume it.

Technological Factors: As Big Mart is known for the availability of quality foods, to maintain this status they might bring some modern machinery which could keep these foods fresh and maintain quality. Likewise with the introduction of meat in their store they take care of quality management in these products. They can also introduce modern teller machine which could reduce the queue of people in the cashier counter.

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?

Yes, I have made an arrangement to meet my group and discuss about the preparation for the activity week. And I have already been to Big Mart before so it would be easy. We are planning to record our data in following ways:

·         Making a set of questionnaires related with our discussion.

·         Gathering information from staffs and manager.

·         Observing consumers whether they are satisfied or not.

·         Getting information from secondary sources.

References:

India, I. o. C. A. o., 2010. Strategic Management. New Delhi: Sahitya Bhawan Publications.

My Strategic Plan (2013). External Analysis. Available from (http://mystrategicplan.com/resources/external-analysis/) [accessed in 28-03-2013]

Small Business (2013). Chron. Available from (http://smallbusiness.chron.com/reason-use-swot-pestle-analysis-40810.html) [accessed in 28-03-2013]