Environmental scanning has always been a part of to-dos whenever an organisation does its year Corporate Strategic Planning. This environmental scan determines and identifies the external factors that drive a business or that may drive the business in the future.
One of the common (if not overused) business analysis tools, perhaps is the two-by-two matrix used to build SWOT, with horizontal pairings of Strengths and Weaknesses; Opportunities and Threats, and how you could then convert your Weaknesses to Strengths; your Threats to Opportunities.
Another tool is the use of Inflection Point Curve where an organisation determines some changes in the environment that may impact the business 10x or more. As believed, if an organisation gets this right, business will reach new heights. If an organisation ignores or neglects the signals, then business might fall to critical decline.
We have probably heard both tools mentioned above during our University days or even from our workplace. I , for one, is writing and illustrating right now based on learning vestiges (at least) from my marketing classes almost a decade ago.
But… what if I tell you that there are actually other more helpful analysis tools I just learned 10 years after? Yes, just now and we are going to learn it together.
PESTLE, a mnemonic, which stands for Political, Economic, Social, Technological, Legal and Environmental Analysis. This framework gives a drone view of the whole macro-environment from many different angles. Other companies call this PESTEL or STEPLE. Whichever way, this tool is a much more comprehensive form of SWOT and it is critical that companies understand the complete depth every letters represent.
VUCA, on the other hand, is actually a military acronym for Volatility, Uncertainty, Complexity and Ambiguity. This framework has been actively and frequently used by civilian business executives and leaders professing that certain elements which make soldiers combat-ready can be applied in the business prairie too. The business idea is simply to be ready for new trends that require rapid transition as our world continues to become more complex, more uncertain and much less predictable – VUCA WORLD.
Both Pestle and Vuca business analysis tools can be utilised in Scenario Planning as part of the strategic planning process. We can tackle this on my next blog post. If you have not explored Pestle or Vuca yet, I really recommend that you give it a good read and research. As of right now, I am currently doing my case studies using these frameworks. It is so much fun!
Ian’s Note: Most of the contents here are based on my learnings from Leeds Business School, UK to which I am currently enrolled as an MBA Student. This is merely a synopsis of my understanding. I hope you could learn something out of it too. Love lots and stay safe.