Introduction:

Business Environment:

According to Arthtur M. Weimer business environment is defined as ‘Business

environment is the climate or set of conditions, economic, social, political, or institutional
in which business operations are conducted

Its fact that both External and internal factors have a great influence on company as well as
on company’s growth. Nowadays organization use different type of analysis for business
environment like Porter’s five forces, Swot and Pestle analysis.

Five Forces Framework is a model developed by Michael E. Porter. He developed this model to
analyze the forces within an industry. The model consists of five forces that identifying the level of
competition and profitability in a given market. 
First force is Threat of New Entrants: This force assesses how easy or difficult it is for new companies
to enter a particular industry. The higher the barriers to entry, the lower the threat of new entrants.
Barriers to entry can be in the form of regulations, high capital requirements, proprietary
technology, or economies of scale. 
Second force is Bargaining Power of Suppliers: This force evaluates the bargaining power that
suppliers hold over the industry. Suppliers can exert significant influence by controlling prices,
quality, or availability of inputs. The higher the bargaining power of suppliers, the lower the
profitability of the industry. 
Bargaining Power of Buyers: This force assesses the bargaining power of buyers or customers in the
industry. Buyers can influence prices, quality, and quantity of products or services offered. The
higher the bargaining power of buyers, the lower the profitability of the industry. 
Third force is Threat of Substitutes: This force evaluates the threat posed by substitute products or
services. Substitutes can limit the potential profits of an industry by offering similar benefits at a
lower cost or with better features. 
Fourth force is Rivalry among Existing Competitors: This force assesses the intensity of competition
among existing firms in the industry. The higher the competition, the lower the profitability of the
industry. Factors that can affect rivalry include the number of competitors, industry growth rate, and
degree of product differentiation. 

Peters five framework

PESTLE analysis was developed in the 1950s by  Aguilar, Francis who was an American
scholar that has experti se on strategic planning. Aguilar wrote a book the ti tle of book is
Scanning the Business Environment in which the now well-known PESTLE tool was fi rst
identi fi ed. (Reding,2021)

Pestle analysis is a management tool which is used to analyze the macro-environmental factors
that have great impact on an organization. Pestle is an acronym for Political, Economic,
Sociocultural, Technological, Legal, and Environmental factors. The analysis helps organizations
identify potential opportunities and threats in the external environment, which can inform their
decision-making processes. 
The six factors analyzed in Pestle analysis are as follows: 
Political factors: These factors involves to the influence of policies of government and their
regulations on the organization. For example, changes in taxation, trade agreements, or political
stability can impact an organization's operations. 
Economic factors: These refer to the economic conditions in which an organization operates. For
example, inflation rates, interest rates, and exchange rates can impact an organization's
profitability. 
Sociocultural factors: These refer to the societal and cultural factors that impact an organization. For
example, changing demographics or shifts in consumer behavior can impact an organization's sales. 
Technological factors: These refer to the digital innovations that advancement impact an
organization. For example, advancements in automation or artificial intelligence can impact an
organization's operations. 
Legal factors: These refer to the legal and regulatory environment in which an organization
operates. For example, changes in employment laws or intellectual property rights can impact an
organization's operations. 
Environmental factors: These refer to the environmental factors on an organization. For example,
change of climate or natural disasters can impact an organization's operations. 

Swot:

SWOT analysis is a strategic planner tool used to finding and analyze the strengths, weaknesses,
opportunities, and threats of a business. Moreover, the acronym SWOT stands for Strengths,
Weaknesses, Opportunities, and Threats. 
SWOT analysis is widely apply in business and strategic planning, and it can help organizations to
identify and prioritize their goals and objectives. It can also help in identifying potential risks and
developing strategies to mitigate them. 

Strengths: These are the internal factors that are positive to the organization and lead organization
towards success. These could include factors like a strong brand ,Innovative, or advance technology.
Weaknesses: These are the factors that are unfavorable to the organization and put it at a
disadvantage. These could include things like inadequate resources, poor management, or limited
brand recognition. By identifying weaknesses, organizations can address them and improve their
overall performance. 
Opportunities: These are the external factors that present opportunities for the organization to grow
and expand. These could include things like changes in the market or new technologies that can be
leveraged to gain a competitive advantage. By identifying opportunities, organizations can develop
strategies to take advantage of them. 
Threats: Heren is external factors that could be a threat to the success of organization. These could
include things like increased competition, changing market trends, or regulatory changes. By
identifying threats, organizations can develop strategies to mitigate them and protect their
business. 
References:
David, F. R. (2011). Strategic management: concepts and cases. Pearson Prentice Hall. 
Glaister, K. W., & Falshaw, J. R. (1999). Strategic planning: still going strong? Long Range Planning,
32(1), 107-116. 
 
Reding, M. (2021). What is a PESTLE analysis? [online] CPD Online College.
Available at:
https://cpdonline.co.uk/knowledge-base/business/pestle-analysis/#:~:text=the
%20employment%20landscape.-. 

Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard Business Review, 86(1),
78-93.