In lecture 3, Helen has taught us about the business strategy, which entails specifying the organization's mission, vision and objectives. There are two famous analysis methods that are frequently used by big companies, such as LG, Addidas. They are PEST and SWOT analysis. I am impressed in the lecture as i have learned PEST and SWOT in my secondary school, the materials reinforce my knowledge on them.
PEST analysis is adopted to analyze the impact of the external business environment in the early stage of strategic thinking. PEST is of paramount importance in beginning the marketing process. PEST stands for Political, Economic, Social and Technology. Political factors include areas such as tax policy, employment laws, trade restrictions and political stability. The economic factors are the economic growth, interest rates, exchange rates and inflation rate. Social factors often look at the cultural aspects. The technological factors includes degree of automation and the rate of technological change.
SWOT analysis stands for Strength, Weakness, Opportunity, Threat. It analysis the business from inside to outside, it is a holistic analysis. Business likes to adopt SWOT analysis as it tells the present situation of the business. It can guide the business to formulate specific policies for the marketing process.
In my opinion, both PEST and SWOT are very useful to the business when making some marketing decision as they can analyze the internal and external environment and gives a clear situation and implication to the business. Apart from the usefulness of these analysis, they are also relatively easy to understand. These analysis have been taught in Business Studies in secondary school, it is therefore I am familiar with them. Moreover, the analysis itself is clear and easy to follow, so this topic raise my interest in learning in further.
In the lecture, I have learned much more deeper on the two analysis methods. I have learned the importance of the two methods and their usability. Even though PEST and SWOT have some similar characteristic, they are still some differences in their focus part. For instant, PEST focus mainly on external environment, while SWOT focus mainly on internal environment and micro environment. Therefore, both of them should be adopted to have a holistic analysis over the business for better decision to be made.
