Finance Report: Analysis of Assessment Tools for Company Performance

This report provides an overview of various assessment tools used in finance for company analysis. It begins with an executive summary highlighting the core tools: SWOT analysis, PESTEL analysis, and Michael Porter's Five Forces model. The report delves into each tool, explaining their methodologies and applications. SWOT analysis assesses internal strengths and weaknesses alongside external opportunities and threats. PESTEL analysis examines the external macro-environmental factors impacting a business, including political, economic, social, technological, legal, and environmental aspects. The Michael Porter's Five Forces model evaluates industry competitiveness by analyzing the bargaining power of suppliers and buyers, the threat of new entrants and substitutes, and competitive rivalry. Additionally, the report briefly mentions the McKinsey 7-S framework and discusses the benefits of using these tools for strategic decision-making. The conclusion summarizes the importance of these tools in understanding market dynamics and guiding business strategies. The report's references include academic sources that support the analysis.

Running head: Finance
Finance
Name of the Student
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Author Note

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Executive Summary
The report show about the different aspects about assessment tools which are used by
company in order to know their activities in market. It shows the tools such as SWOT
Analysis, PESTEL Analysis and Michael Five Force Model. These are the tools which are
used by company to know how the company is performing in market. So these tool which are
mention help the company to know about both internal and external factors.

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Table of Contents
Introduction................................................................................................................................3
Different Tool used for analysis of Company............................................................................3
SWOT ANALYSIS................................................................................................................3
PESTEL ANALYSIS.............................................................................................................4
Michael Five Forces Model...................................................................................................5
McKinsey 7-S Framework.....................................................................................................6
Benefits of Above Tools............................................................................................................7
Conclusion..................................................................................................................................7
Reference....................................................................................................................................9

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Introduction
. Each company have to do much market research which will help them to know about
the competitors in the market and it will help them to meet the market requirements of
business (Cadle, Paul and Turner 2014). The company have to use many research so that it
can able to have proper amount of market research as to know about the company structure. It
has to check various aspects of market so that it can able to know about the taste and
preferences which are there in customer in regards of company products. The report show
about the different tool, which are used by the company to do the internal and external
analysis of market (Dälken 2014). It shows various aspects of marketing tools which are used
by company to know about the different forces in market.
Different Tool used for analysis of Company
SWOT ANALYSIS
These analysis help the company to know about the strategic of market as it take
consideration different aspects in both internal as well as external environment. The things it
takes into consideration are:
STRENGTH
It show the different strength which the
company has in the market, it show how
the company is able to get an edge in the
market
WEAKNESS
It show the aspects in which the
company is lacking behind from others,
it show the disadvantages which the
company has in the market
OPPORTUNITY
It show the aspects in which the company can
able to make more advantage while carrying its
THREATS
This are the element which are external
but can turn as disadvantage to

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business operation as it will help them to know
how it can expand the business more easily and
effectively.
company business such as competitors
in the market, some changes in the rules
and regulation.
PESTEL ANALYSIS
The analysis is been based upon the external analysis of market. It shows about the
different external factor which can be there in regards of company business. It takes into
consideration all factors which are there so that the company will able to know how to
overcome the external factor properly and effectively (E. Dobbs 2014). This analysis is been
done so that the company can able to know where they are lacking and what are the factors
which have affected the company more and that is to be adjusted properly in business.
As per the above it can be seen about the different aspects which is covered in
PESTEL as in political aspects it take consideration how the government can affect the
company by changing some policy in regards of company business, as if there is some change

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which affect company directly so it will be very hard for company to carry business (Gürel
and Tat 2017). Economical factor is the one in which the company have to see about the
economy in which they are carrying business operation as if the company is working under
an economy in which there is high inflation so it can suffer revenue loss and also there are
many other factors (Mkude and Wimmer 2015). Social factor show about the customers and
other aspects such as culture in which company carry business, health issue in the community
so it should be taken into consideration while making any decision in regards of company
product. In Technological it cover much company have done research and development and
also how it able to cope up with the new technology which is coming in present days as
whether it able to match with the market or not. Legal factor show about the different legal
aspects which can affect the company as how it should be handle by company such as
consumer law, law related to health factor. Lastly it see about the Environmental factor such
as change in climate, ecological aspects so this also been concern as how the company is able
to meet all the environmental aspects and whether it able to fulfil all the need of environment
aspects in business.
Michael Five Forces Model
It show the analysis of Five forces which affect each industry and it should be
managed properly so that the company is able to earn proper from the business. It takes many
factors which help the organization to know about how the company is able to look forward
in future in regards of carrying its business activities (Sarsby 2016). The forces are been
shown below:
1. Competitors in Market - It show who are the competitors in the market, the one
which can affect the company revenue as due to them the company will not able to
increase their revenue properly.

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2. Supplier Power – It show about how much the company is dependent upon the
suppliers, as how much the suppliers can able to hold the price or increase so if there
is more supplier power than it can able to reduce the profit because the supplier will
charge more from the company.
3. New Entry in Market – It show how easy is for the new company to enter in the
market, if there will be no barrier in entry than this will affect the company revenue as
the more number of entry will be there, the less company will able to hold the market
so the entry in market also play an important role and it should be taken into
consideration while doing market research (Song, Sun and Jin 2017).
4. Bargaining Power of Customers – The company have to see the customers aspects
as how much it able to hold the customer in company as if the customer have the
power to hold or reduce the price of company product than it will not able to earn the
desired revenue which should be there in normal business activities (Suh 2014).
5. Threats of Substitutes – The company have to check the substitute or option which
is available against its own product as if there is many number of option available to
customers than the company will have an decrease in revenue and also the company
will not able to hold its position in market.
McKinsey 7-S Framework
This framework show about the different 7 internal elements, that should be taken
consideration to run successful business. The seven elements are:
 Strategy
 Structure
 Systems
 Shared Values
 Skills

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 Style
 Staff
Benefits of Above Tools
As per the above mention tools which help the company to know about the different
market structure. As per the SWOT analysis is been concern it help the company to know the
internal factor which is there and able to help the company to know about where the company
have to check the problem and should overcome the same. PESTEL Analysis show about the
external environment of company as how the company is able to know about the factor which
are outside the business but will affect directly to company business, so if company able to
know the factor than it will able to overcome the factor and able to carry business operation
properly in market. Lastly, Michael Five Force Model as it help the company to know about
external environment more properly as it take into consideration different aspects so the
company is able to know the competitors and other aspects which will help the company to
run the business more smoothly and effectively.
Conclusion
The report conclude about the strategic tools which are been used by the company in
regards of market. It show various types of tools which are used by the business to know the
detail of market. It shows SWOT Analysis, PESTEL Analysis and Michael Five Force
Model. These forces help the company to know about internal and external factor of market
and how the company will able to overcome the threats and able to run the business smoothly
and effectively.

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Reference
Cadle, J., Paul, D. and Turner, P., 2014. Business analysis techniques. Chartered Institute for
IT.
Dälken, F., 2014. Are Porter’s five competitive forces still applicable? A critical examination
concerning the relevance for today’s business (Bachelor's thesis, University of Twente).
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Gürel, E. and Tat, M., 2017. SWOT analysis: A theoretical review. Journal of International
Social Research, 10(51).
Mkude, C.G. and Wimmer, M.A., 2015. Studying interdependencies of e-government
challenges in Tanzania along a PESTEL analysis.
Sarsby, A., 2016. SWOT analysis. Lulu. com.
Song, J., Sun, Y. and Jin, L., 2017. PESTEL analysis of the development of the waste-to-
energy incineration industry in China. Renewable and Sustainable Energy Reviews, 80,
pp.276-289.
Suh, J., 2014. Theory and reality of integrated rice–duck farming in Asian developing
countries: A systematic review and SWOT analysis. Agricultural Systems, 125, pp.74-81.