SWOT and PESTEL Analyses in Business Planning Essay

SWOT and PESTEL Analyses in Business Planning - Essay Example For the purpose outlined above, it is imperative to discuss what is business planning first and how the analysis of the business environment figure play its part. Essentially, the concept of business planning should be self-explanatory or that its meaning should be plain and obvious. However, the process is actually technical and scientific and claims an important field of research in the area of business management. Perhaps the simplest but best understood definition is that it is an undertaking in the real world done in order to understand where an individual or an organization is coming from and what the future may hold. Out of this conception, it easy to understand how business planning can be fundamental in successfully starting a business and in operating established businesses. Mylonas, Harvey and Hodges (2007) listed several reasons why a business plan is crucial for start-up organization. The four most important of these are: 1) to determine the feasibility of a business idea; 2) to set the goals and outline the plan of action to achieve them; 3) develop business strategies; and, 4) help in implementing research to subsequently establ ish a business direction. And yet, business planning is needed by companies that are long past their startup stage and that they, as a rule, are useful in all stages of an business organization’s life span. ... According to Bessant and Tidd, most of these are in the area of marketing and finance, and that most plans are also bound to fail in identifying analysis on potential competitors and comprehensive financial forecast, among others that contribute to limited successes. (p170) Ideally, a business plan, according to Kariv (2011), â€Å"guide a firm’s management and staff in carrying out new projects; to guide retailers weighing the prospects of mergers; to manage mergers; to deal with rapid growth; to set priorities when planning changes; to capture new clients; to deal with difficulties and contingencies† or to address â€Å"a new financial situation relevant to the company; significant changes in the market, such as shifting tastes, changes in regulations, fluctuations in the purchasing climate; development of new products† and so on. (p138) Evidently, the list of reasons is quite numerous and diverse. But these underscore the fact that the requirement is based on the issue of survival for companies in today’s highly dynamic and competitive business landscape. In other words, a business plan can be used as a roadmap that addresses each need and requirement of an organization in all stages of its operations including the circumstances encountered. It is a tool for individuals within the organization so they can align for the company’s organizational processes and strategies to business objectives, among other goals such as change intervention, crisis management and so forth. In order to do this, however, there is a requirement for sufficient information and analysis on the business environment. The Analysis of the Business Environment A critical stage in business planning is the analysis of the business environment. The idea is that such