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Porter’s five force analysis
essay about porters five forces model
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In order to identify the uncertainties in Shell’s far environment I decided to use a PESTLE analysis approach to the oil and gas industry. The deep analysis of the macro-environment is key to the organisations in order to understand which factors are impacting their operations. The main purpose of PESTLE analysis (Political, Economic, Social, Technological, Legal and Environmental) is to identify those factors that have an impact on the organisation but are outside its control area. Together with other frameworks (such as Porter’s ‘5 forces’), PESTLE framework is required to develop a comprehensive analytical strategic process. Political Factors Due to the presence of natural resources a country may be subjected to Geopolitical fights and …show more content…
For example, a major investment in renewable energy sources, such as solar and/or wind has dramatic implications in the environment (i.e. reduction of CO2 emission); this requires investments in technology, compliance and conformity to policies that regulate the utilisation of renewable resources, installation of energy plants which may an impact on the local and national economy and may change the perception of consumers. Shell’s strategy is strongly positioned to adapt to changes, their extensive scenario planning activity allowed them to constructively think of what operations to promote in order to face environmental changes (Cornelius, P. et al, 2005). They have extensively invested in new technology and renewable resources, adapting to the environmental and social-ethical variables (Shell website, 2016). Although I agree with Elena that the complex interconnection of all factor have a general strong impact on Shell’s business, I believe that the measures undertaken by Shell (large investments on technology and renewables discussed above) helped them to reduce the degree of
One major business incident happened in April 2010 shocked the world and caused an “earthquake” of British Petroleum (BP)’s brand image. The Deepwater Horizon oil rig owned by BP in the Golf of Mexico exploded, leading to a disastrous oil spill in this marine area. The maritime disaster caused by the explosion became the largest one in the history of the U.S. and brought huge financial and reputations losses to BP. What is worse, sealing the oil well took over five months. From the explosion of the completion of the sealing (announced by BP), over 780 million gallons of crude oil spilled into the sea, causing irreversible pollution and damage to the bio-system in this area and the world (Lofgren 2013). BP’s response, however, is considered as a crisis communication failure (Heller 2012) by some people and others believe BP’s response was effective (Mejri & de Wolf 2013).
A PESTLE analysis is a macro environmental framework used to understand the impact of the external factors on the organization. PESTLE stands for "Political, Economic, Social, Technological, Legal and Environment” factors.
MR: First of all, to get a new energy system, new jobs have to be created; so, economy grows up. Secondly, it is estimated that energy can get cheaper in a 20-year term. Lastly, having clean energy means having a cleaner world, which is positive to ourselves because it makes us healthier (“The Solutions Project”, 2011).
It is important to recognise the main features that affect a business in view of the macro and micro-environmental factors.
Winston A, 2010, Five Lessons from the BP Oil Spill, Harvard Business Review, accessed 1 April 2014,
As the UAE is made up of 7 Emirates so each of them have their own governmental organisations which allows for the smooth running of their economy.Dubai occupies the vice presidency,second after Abu Dhabi which has its own law so its also a primal location.It is politically safe with low crime rate.
This happens when a weaker country is invaded and its resources are exploited by a powerful country.
The world has grown increasingly complex, resulting from the greater interdependence among world economies (Thompson, 2002). Successful organization is largely determined by how well the organization adjusts all its tangible and intangible properties to keep itself on track with its surrounding (Armenakes & Bedeian, 1999). Strategy was concerned to manage firm’s activities and resources to the environment in which it operates. This essay will analyse the micro and macro external environment in the part five years (2000 to 2006) of IBM Company by using PESTEL and five forces model to analyse in the first part. The second part will discuss about the advantages and disadvantages of the two possible alternative strategies for IBM.
2. How should BP have handled an external environmental analysis ties and what environmental changes and trends (opportunity and threats) might they have discovered?
Introduction Air India airline is one of the biggest airline in the India. It was established by the famous company TATA and since its incorporation. It has grown very well and has spread all over the world in the different destinations. It has become the reputable brand in the airline industry with having the operations over 152 destinations. It has link up connections in the 35 countries and it currently has 137 fleets.
A PESTEL analysis is a framework or tool used by marketers to analyse and monitor the macro-environmental (external marketing environment) factors that have an impact on an organization. The result of which is used to identify threats and weakness which is used in SWOT analysis. (Professional Academy n.d.)
In this essay I will be discussing and critically analysing each element of the PESTLE analysis within the hospitality industry, with examples to reflect each point. Also this essay will discuss how marketers should adapt to changes in the macro-environment. The PESTLE analysis is a marketing principle used to understand the relation between a company and the external environment. Murray-Webster (2010:88) states PESTLE analysis will help to capture understanding about aspects of the context by using the prompt political, economic, sociological, technological, legal and environment.
This is a crucial part of a strategic analysis because ‘…organisations do not exist in a vacuum, they are part of a complex world’ (Bowman 1987:61) and many factors can influence operations, beneficially and unfavourably. However, these can be difficult to comprehend due to their complexity, diversity and fast changing nature. Necessarily a number of techniques have been developed to facilitate the process and to ‘…contribute to answering the key managerial question…’of what ‘…opportunities and threats might arise in the future’ (Johnson & Scholes 2002:99).
Because the subject matter of strategic management is so inherently complex and because each one of us brings his own personal biases to the analysis, it was suggested early on that virtually all case material in the field be analyzed from the perspective of more than one methodology. Profit theory and industrial chains were selected as the first of a number of viable approaches to the analytical process. It would have been equally correct to select the Five Competitive Forces analysis refined by Michael Porter, one of the major figures in the field of strategic management. This methodology addresses the same issues but differs only in the language that they use to describe corporate behavior. The five forces are:
...ination, hydrogen fuel and solar energy (World Economic Forum 2014). These are technologies that closely related to environmental and recourse preservation, which help the society switch to use renewable energy.