Strategic analysis of the external environment

Outline and discusses models used to assess the role, impacts and implications of rapid, volatile, discontinuous change for an organization

As organizations continue to grow, their complexities also increase. However, they often face rapid, volatile, and discontinuous changes in the business environment. The changes may present threats and opportunities to the business in one year or even in the long run. There are many models that can be used to identify and analyze the impact of these changes on the business, but the most effective model include the PESTLE analysis and the Five Forces Frame Work &Government.

Pestle analysis framework

The pestle analysis looks at the business environment. It is used to analysis the changes in the environment especially the Political, Environmental, Social, Technological and Economic changes. Pestle analysis analyses the changes in general environment in which the bines operates. For example, it helps the management to identify the trends, changes as well as patterns that can pose great threats and presents opportunities to the organization in the end.

It is undeniable that the key drivers of volatile and discontinuous changes include technology, fashion, and economic factors because they tend to occur more frequently. These changes can be analyzed using the pestle because the technology environment is constantly changing. On the other hand, the volatile changes include the changes in the business environment including legal system, the government regulations, and policies

Five forces + government framework

This framework is used to analyze the mega forces that present opportunities and threats in the immediate external environment such as the specific industry in the short and long run. The five forces include the customers and the suppliers who are analyzed for their bargaining power whether high or low. The threat of new entrants, substitutes and the competitors whose threats must be identified and measured whether high or low. Currently, the government is a force is also conserved to affects specific industries or markets in different way. Therefore, the five forces and government analyses the impact of changes in the specific industry in which the business operates such as the customers, the competitors

These changes can be analyzed using the pestle analysis and the five forces framework. Finally, the discontinuous changes in the business environment include changes in the economic changes, changes in the social aspect of the environment such as consumerism, and fashion and competitive environment. These changes can effectively be analyzed using the five forces framework. It is important to note that the frameworks for analyzing the impact of these changes more often overlap and this makes it plausible to consider using one framework at time to get a better perspective (Robbins, et al, 2009)

Conclusion

The Pestle and the Five Forces & Government models are useful for analyzing the changes that forces that pose threat and opportunities in the general, and specific business environments respectively.

Bibliography

Robbins, S. P., Bergman, R., Stagg, I. and Coulter, M. 2009. Management, 5th edition, Pearson Education, Australia,

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