Hello, welcome to Content in Action, this is 5CLD week 3, ‘Analytical tools and influencing factors’.

My
name is Joanna Suvarna.
Coming up, we will be looking at analytical tools that can be used in order to help you understand your
organisation’s internal and external environment.
We will explore the key elements of PESTLE, SWOT and Porter’s Five Forces and discussing how these
have been, and can be, applied to different organisational contexts.
We will take a look at the importance of stakeholder analysis, identifying key reasons for undertaking
this analysis and ways in which the analysis will be useful in application.
At the end of the video there will be a summary and we will signpost you to the applicable criterion
within your assignment.
This week we have explored how in order to succeed, organisations must fully understand the context
in which they operate and the factors that affect them, both inside and outside the organisation itself.
We have looked at a variety of tools that L&D professionals can use to help them understand their own
business landscape, determining the relevance and potential impact of influencing factors on the
organisation reaching its strategic goals.
Changes in business environments can create great opportunities for your organisation but can also
cause significant threats. This is where business tools such as SWOT, PESTLE and Porter’s Five Forces
can be useful.
These classic analytical frameworks allow you to gain a better understanding of the market in which
your organisation operates, and identify what impacts its performance the most. The tools
complement one another, and you can use them together to formulate a business strategy.
Let’s recap on some of the tools and their key areas of focus.

PESTLE
We looked at PESTLE analysis, this technique helps us to think about the things that affect our business
in terms of categories: political, economic, social, technological, legal and environmental.
It can help you gain a ‘big picture’ view of the environment in which your organisation operates, and of
the factors that might affect your decisions in the future. You may have less influence to change these
factors as they are all externally driven.
PESTLE is popular because it allows you to single out new business opportunities and identify potential
threats. For example, you might foresee a change in your industry before anyone else and gain a
competitive advantage by adapting more quickly than your competitors. It can also give you an
objective view of an unfamiliar environment and steer you away from projects that might fail for
reasons outside your control.

TESCO – PESTLE ANALYSIS

We looked at a PESTLE analysis of the well-known multinational food retailer, Tesco.
As Tesco has a global presence, the PESTLE analysis identified that the organisation needs to be aware
of key political conditions, legislations, economic conditions and trends in each of the countries in
which it operates. The analysis identified that they need to take into account consumer preferences
and shifts, for example the expectation for organisations to operate in an ethical and environmentally
friendly manner and the growth in technological solutions such as shopping apps and self-checkout
facilities.
Having an insight into the external environment in this way gives the organisation the opportunity to
embrace new trends and changes and diversify into new markets across the globe.

SWOT
We’ve looked at SWOT analysis, this tool helps us to think about the positive and negative factors
affecting our business, both internally and externally.
This tool can be used to help any organisation review the strategy, position and direction of a project,
business venture or competitor. It’s extremely useful for when organisations look at their own

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 organisational context.
We can identify that strengths and weaknesses are internal to an organisation, and opportunities and
threats are external. For example, a company’s strength might be the quality of its training delivery,
but its weakness could be a lack of market visibility - these are aspects that a business has a certain
degree of influence over. Developments in technology or changes in government policy, however,
which could present new opportunities and threats to the organisation, are largely outside its control.

NOKIA – SWOT ANALYSIS

We looked at a SWOT analysis of Finnish company, Nokia.
The SWOT analysis identified how Nokia has failed to keep up with competitors and lost its reputation
as an innovator. However, it also highlighted how the company has the advantage of Microsoft’s
expertise and can gain ground if it invests in R&D to develop new products to diversify its portfolio.
The analysis also identified that Nokia might also consider rebranding to get rid of its ‘old school’
reputation, analysis also identified that the organisation should work to improve its after-sales service.

PORTER’S FIVE FORCES

Porter’s Five Forces can help you to understand how attractive and profitable your industry is likely to
be by looking at the main factors that make up the competitive environment: your competition,
suppliers, buyers, substitutes and new entries.
You can use this model to evaluate the industry context and your company’s strategic position in a
particular market or industry. Once a business has identified the strength of its competitive position, as
well as the position it might move into, it can exploit its strengths, reduce its weaknesses and
formulate a strategy accordingly.
The stronger the competitive forces, the less attractive an industry is. A company wants all five forces
to be weak so that the chances of profits are higher.

Once a business has identified the strength of its competitive position, as well as the position it might
move into, it can exploit its strengths, reduce its weaknesses and formulate a strategy accordingly. If
you are analysing the Five Forces for the industry that your organisation operates in, consider the
following factors:
Threat of new entrants - How easy it is for others to enter the market. If an industry is profitable,
rivalry soon intensifies and profits start to fall. Organisations need to create barriers to deter other
competitors from entering the market.
Threat of substitutes – What is the availability of alternative products and how likely is it that
customers will switch? This is particularly threatening when buyers can easily find substitutes that are
better quality or more attractively priced.
Industry rivalry – How strong are your direct competitors? This is a major factor in determining how
competitive and profitable an industry is. The more competition for market share, the lower the profit.
Bargaining power of customers – How much power do your customers have to drive down your prices?
Lower prices mean lower revenue, which leads to lower profits.
Bargaining power of suppliers - Strong bargaining power allows suppliers to sell higher priced or low-
quality materials to organisations, reducing buyers’ profits.

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 Along with the tools we have recapped, there are also a variety of other tools that can be used to help
you understand your own organisational context, we would encourage you to research these further
and find the tool that you think is most useful for your needs.

STAKEHOLDER ANALYSIS
We also took a brief look at stakeholder analysis this week, this technique can help you understand
who is responsible for business processes and decision-making within your organisation, who has an
interest or impact on them, and who should be consulted or informed about those decisions.
It asks the questions: Who is affected by your business decisions? And who has the greatest impact on
them?
Stakeholder analysis allow you to:
- Identify people who could be helpful to a project, it can also allow you to identify people who
may be affected by an implemented change – potentially these individuals could be excited
about the change or alternatively they could be extremely worried.

- Stakeholder analysis gives you a picture of the people that you need to think about with regard
to decision-making within the organisation and allows you to think about how you are going to
communicate with each set of stakeholders. For example, you may wish to engage with some
key stakeholders in order to gain an insight into their expertise and collaborate on a project.

You may need the support of other key stakeholders in order to get the go-ahead for particular
projects or spends.
Knowing your key stakeholders, and their levels of influence and interest is imperative when making
decisions.

We’ve come to the end of this week’s Content In Action Video, in summary we have looked at key
analytical tools that can be used in order to understand your organisation’s environment and think
more strategically about the future.
The learning outcome was to be able to analyse the key factors influencing the achievement of
strategic objectives in varying organisational contexts and their impact on L&D policies and practice.
This is linked to your assessment criterion, 2.2, where you are asked to apply a range of analytical
techniques to determine the relevance and impact of influencing factors in a variety of organisational
contexts.

© CIPD in partnership with AVADO 2018