Business Strategy: SWOT, Porter's Five Forces, and Break-Even Analysis

This document provides a detailed analysis of several key business analysis tools. It begins with a discussion of SWOT analysis, outlining its steps and benefits for assessing strengths, weaknesses, opportunities, and threats. The document then delves into Porter's Five Forces, explaining how this framework helps organizations analyze their competitive advantage. Break-even analysis is also covered, detailing its implementation and use in determining a company's financial stage. Furthermore, the document explores PESTLE analysis, a strategic tool used in marketing plans, and product life cycle analysis, which assesses a product's progress. Each tool is explained with its implementation steps and relevant references are provided.

SWOT ANALYSIS
S SWOT is an acronym of Strength, Weaknesses, Opportunities and Threats. It is a tool for
the assessment of the above four aspect faced by the business. Using this tool can help in
achieving a very good knowledge of the competitors present in the market (Sammut‐Bonnici and
Galea, 2015). The chances of failure for the organization reduces using this assessment tool and
a better crafting of the strategies takes place (Shinno, et al., 2006).
Implementation of SWOT analysis
STRENGTHS WEAKNESSES
OPPORTUNITIES THREATS
SWOT
ANALYSIS

Step 1: The process of screening of the external and the internal environment.
It is very important to have a firm knowledge about the internal and external factors that
are prevailing in the environment. Using SWOT analysis will help us getting a current scenario
of the situation that may influence the performance of the business in the long-run.
Step 2: Analysis of the internal and external environment.
This analysis is done to understand the internal environment that is any strength or
weakness present in the organization and the external environment that is any threat and
opportunity present in the environment that may influence the performance of the organization.
Step 3: Construction of the matrix.
All the internal and external factors are now listed down using a matrix from the analysis
done above.
step 1: screening of
the internal as well
as the external
environment.
step 2: analysis of
the internal and
external
environment
step 3: construction
of the SWOT matrix
step 4: defining the
SWOT matrix
step 5:
implementation of
the decision taken

Step 4: Defining the matrix.
After the construction comes the defining part which helps in understanding what future
directions will be expected out of these actions. We need to define the matrix by taking
combinations of strength-opportunity and weakness-threat.
Step 5: Decision-making
After all the steps and after analyzing come the decision making which will be
implemented in the organization and a final result will be obtained.
PORTER’S FIVE FORCES
This is a strategic tool used by organizations to have an analysis of the competitive
advantage of the organization in the market. This strategic tool helps the organization to
understand its weaknesses and strength within the organization (Grundy, 2006). It can be called
as a framework that is helpful for analyzing the competitive environment of the organization and
can also be used as a business strategy for increasing the competitive advantage of the
organization.

Implementation of Porter’s Five Forces
Step 1: understanding the threat of the new entrants
The organisation must look at this factor very seriously because most of the compaies are
effected more by the new players in the market. An industr having a very strong barrier to this
kind of entries will be ideal as the company that is existing can charge for more prices and
negotiate in a better way.
Step 2: Supplier’s power
This factor or step helps in determining the eae with which a supplier can drive or riise
up his input costs. This step must be carefully anaysed because a lot of suppliers may be present
for the same industry making the analysation complex.
Step 3: Customer’s power
Competitive
rivalry
bargaining
power of
the
customers
threat of
substitutes
bargaining
power of
the
suppliers
threat of
new
entrants

This s the analysis of the customer on the basis of him taking the price down for himself.
The significance of the customer is judged and accordingly a decision is taken based on the
analysis done.
Step 4: Substitute’s threat
The analysis of this helps in having a knowledge about the number of substitutes present
in the market. This analysis will help in taking steps pro-actively.
Step 5: Competitive rivalry
This analysis tells about the number of competitors present for the same product in the
market and will give a knowledge about the potential risks associated.
Step 6: Decision-making
After all the analysis if the above factors a decision is taken accordingly making the
process of analysis complete.
BREAK-EVEN ANALYSIS
This is a financial tool that helps in the determination of the stage the company is
currently present. In other words, it can be understood as the number of products and services the
company needs to sell to be in profits (Levy and Brooks, 1986).
Implementation of Break-even analysis

Step 1: screening of the prices
If the analysis done shows prices are very low to enable the break-even then the cost of
the item must be raised.
Step 2: analysis of the material
The cost of the material and the cost of the labor must be sustainable only then a break-
even point could be found.
Step 3: new products of the company
Before the launching of the product all the cost must be accounted that are associated
with the product.
step 1: screening
of the prices.
step 2: analysis of
the material
step 3: new
products of the
company
step 4: planning
the analysis
step 5:
implementation of
the planning done

Step 4: planning the analysis
A planning makes the process easier to implement and analyze. It is more beneficial for
the goals that are for the long-term process.
Step 5: implementation of the planning done
After all the planning done comes the time for execution. This last step tells about how
many units are to be sold for being in the profits.
PESTLE ANALYSIS
PESTLE analysis is a strategic tool that is applied in the marketing plan of an
organization when a new audience is targeted and a product is produce for the market. This
analysis requires the knowledge about how the events takes place outside a company (Yüksel,
2012).
Implementation of PESTLE analysis

Step 1: brainstorm PESTLE factors
Consider all the political, social economical, legal and environmental factors that are
linked with the business.
Step 2: brainstorm the opportunities arising
From the factors above consider all the possible opportunities that are arising and
effecting the business heavily.
Step 3: brainstorm the threats associated
From the factors above consider all the possible issues or threats effecting the business
heavily.
step 1: brainstorm
PESTLE factors
step 2: brainstorm
the opportunities
arising
step 3: brainstorm
the threats
associated
step 4: anayze all
the three steps
above
step 5: take
appropriate action

Step 4 and 5: take appropriate action
After the completion of the analysis, carry out proper action plan and implement the
action required.
PRODUCT LIFE CYCLE ANALYSIS
This is a technique that is used for plotting the progress of a product during its life span
and can be used to assess type of product an individual firm produces (Day, 1981).
Implementation of product life-cycle analysis
step 1: strategic
position
analysis
step 2: strategic
choice analysis
step 3:
implementation
of the strategic
actions

Step 1: strategic position analysis
This can be done for analyzing the relationship of the sales and profit in an organization
to establish a competitive advantage.
Step 2: strategic choice analysis
This is done for analyzing the critical factors for success and this needs to be assessed as
most of the products are produced in masses.
Step 3: implementation of the strategic actions
After the analysis of the position and choice of strategy in the market comes the time for
following the course of action (Ireland et al., 2001). This will tell the industry whether the
strategies used above are correctly implemented and the result of the action planned.

References
Day, G.S., 1981. The product life cycle: analysis and applications issues. Journal of
marketing, 45(4), pp.60-67.
Grundy, T., 2006. Rethinking and reinventing Michael Porter's five forces model. Strategic
Change, 15(5), pp.213-229.
Ireland, R.D., Hitt, M.A., Camp, S.M. and Sexton, D.L., 2001. Integrating entrepreneurship and
strategic management actions to create firm wealth. Academy of Management
Perspectives, 15(1), pp.49-63.
Levy, H. and Brooks, R., 1986. Financial Break-even Analysis and the Value of the
Firm. Financial Management, pp.22-26.
Sammut‐Bonnici, T. and Galea, D., 2015. SWOT analysis. Wiley Encyclopedia of Management,
pp.1-8.
Shinno, H., Yoshioka, H., Marpaung, S. and Hachiga, S., 2006. Quantitative SWOT analysis on
global competitiveness of machine tool industry. Journal of engineering design, 17(03), pp.251-
258.
Yüksel, I., 2012. Developing a multi-criteria decision making model for PESTEL
analysis. International Journal of Business and Management, 7(24), p.52.