In the Context of the Process of Strategic Analysis homework essay help Political Science online class help

PEST is an acronym for the following factors Political Legal Social Technological PEST factors play an important role in the value creation opportunities of a strategy However, they are usually outside the control of the corporation and must normally be considered as either threats or opportunities. Specifically the PEST is a useful tool for understanding risks associated with market growth or decline, and as such the position, potential and direction for a business or organization.

The PEST method is at times supplemented by the legal and environmental factors. http://rapidbi. com/pestle/ SWOT Analysis The SWOT analysis is a tool used in strategy formulation that can aid in identifying the Strengths, Weaknesses, Opportunities and Threats of a particular company. Strengths and weaknesses are internal factors that create or destroy value. They can be measured using internal assessments or external benchmarking. Strengths and weaknesses are within the control of the organsiation and should either be harnessed or eliminated.

For example, in 2009 Honda started the commercial production for the first time of zero-emission hydrogen fuel-cell powered vehicle as one of it’s many steps to help slow down greenhouse gases. Honda’s strength in extensive R&D made the vehicle a reality. Opportunities and threats are external factors that have the potential to create or destroy value. A company cannot control them. They emerge from either the competitive dynamics of the industry/market or from PEST factors. For example, the extremely unfavourable environment created by the global credit crunch forced Honda to withdraw from formula one racing in 2008.

Honda did this to protect its core business activities and secure the long term, as widespread uncertainties in the economies around the globe continued to mount. Pulling out of formula one racing would save Honda an estimated $108 million (US Dollar) annually. http://www. carjunction. com/infoasp2/auto_industry_news. asp http://www. timesonline. co. uk/tol/sport/formula_1/article5290919. ece Practical Relevance of the Two Frameworks The SWOT analysis is relevant to strategic planners at Honda Motors because of it’s ability to help clarify and summarise the key issues and opportunities facing the company.

Value lies in considering the implications of the things identified and it can therefore play a key role in helping Honda to set objectives and develop new strategies. The ideal outcome would be to maximise strengths and minimise weaknesses in order to take advantage of external opportunities and overcome the threats. For example, the environment may present an opportunity for Honda to develop a new product but if the company does not have the capacity to produce that product it may either decide to invest in new plant and machinery or to just steer clear.

The PEST tool can be used by strategic planner at Honda to analyse business segments, industries, particular markets or whole economies. Thus the PEST provides a summary of the driving forces in the macro environment. It will help Honda identify drivers that were of high importance in the past, indications to what extent they might change in future and how this will interfere with the organization or the whole industry.