1. The Business Environment B200 Understanding Business Behavior
Case Analysis
The Business Environment
B200
Understanding Business Behavior

2. Organizations operating environment are affected by:
External forces (those factors that an organization has no control over),
Internal forces (factors that an organization has direct control over)

3. SWOT ANALYSIS
Understanding Strengths,
Weaknesses, Opportunities and Threats

4. SWOT Analysis Framework
ENVIRONMENTAL SCAN
INTERNAL ANALYSIS
EXTERNAL ANALYSIS
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
SWOT MATRIX

5. Strengths: Questions that should be asked to identify Strengths:
What are your advantages?
What do you do well?
What relevant resources do you have?
What do other people see as your strengths?
Examples of such strengths include:
Patents
Strong brand names
Good reputation among customers
Cost advantages from proprietary know-how.
Exclusive access to high grade natural resources.
Favorable access to distribution networks.

6. Weaknesses: Questions asked to identify Weaknesses:
What could you improve?
What do you do badly?
What should you avoid?
 Examples of such Weaknesses include:
Lack of patent protection
A weak brand name
Poor reputation among customers
High cost structure
Lack of access to the best natural resources
Lack of access to key distribution channels.

7. Opportunities : Questions asked to identify Opportunities:
The external environment analysis may reveal certain new opportunities for profit and growth.
Where are the good opportunities facing you?
What are the interesting trends you are aware of?
 Useful Opportunities come from such things as:
Changes in technology and markets on both a broad and narrow scale
Changes in government policy related to your field or loosening of regulations
Changes in social patterns, population profiles, lifestyle changes, etc.
Local Events
Removal of international trade barriers

8. Threats: Questions asked to identify Threats:
What obstacles do you face?
What is your competition doing?
Are the required specifications for your job, products or services changing?
Is changing technology threatening your position?
Do you have bad debt or cash-flow problems?
Could any of your weaknesses seriously threaten your business?
 Examples of such Threats include:
Shifts in consumer tastes away from the firm’s products
Emergence of substitute products
New regulations
Increased trade barriers

9. The SWOT/TOWS Matrix Strengths Weaknesses Opportunities S – O Strategy
W – O Strategy
Threats
S – T Strategy
W – T Strategy
S-O strategies pursue opportunities that are a good fit to the companies strengths.
W-O strategies overcome weaknesses to pursue opportunities.
S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats.
W-T strategies establish a defensive plan to prevent the firm’s weaknesses.

10. PEST/STEP ANALYSIS
This is a simple analysis of an organization’s external environment Political, Economical Social and Technological environment.

11. The PEST Analysis Political Policies Legislations Regulations
Likely developments

12. The PEST Analysis Economic
All businesses are affected by economical factors nationally and globally. Typical categories are;
Interest rate policy and fiscal policy
Economic growth
Inflation
Market trends
Local economic market circumstances

13. The PEST Analysis Social
All businesses are affected by social factors. Typical categories are;
Demographics
Values
Lifestyle
Age structure of population
Class and income-structure of local population

14. The PEST Analysis Technological
Changes in technology is changing the way business operates. Typical categories are;
Equipment available
Technologies
Products