Company Sustainability

PEST Analysis, Porter’s 5 Forces and Sustainability Strategies

Margarita Antonova

Volunteer Trainer @ Telerik Academyacademy.telerik.com

Business System AnalystTelerik Corporation

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Table of Contents

PESTLE Analysis Porter’s 5 Forces Growth Strategies Contingency Strategies

Sustainability Questions

Are we making a profit?How do we continue to sell at a profit?

PESTLE AnalysisAnalysis of the external environment and more specifically the Political, Economic, Social, Technological, Legal and Environmental factors.

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PESTLE Questions What is the political situation of the country

and how can it affect the industry? What are the prevalent economic factors? How much importance does culture has in the

market and what are its determinants? What technological innovations are likely to

pop up and affect the market structure? Are there any current legislations that regulate

the industry or can there be any change in the legislations for the industry? Intellectual property rights for software

What are the environmental concerns for the industry?

Porter’s 5 Forces ModelFramework for industry analysis and business strategy development that helps determine the competitive intensity and attractiveness of a market.

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Porter’s 5 Forces

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Porter’s 5 Forces1. Threat of new

entries/competition – can new businesses be easily started in you industry/sector

What’s the threat of new businesses starting in this sector?

How easy is it to start up in this business?

What are the rules and regulations? What finance would be needed to

start-up? Are there barriers to entry which

give you greater power?

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Porter’s 5 Forces2. Threat of substitute products or

services - increases the likelihood of customers switching to alternatives

How easy is it to find an alternative to this product or service?

Can it be outsourced? Or automated?

There new markets targeting similar needs?

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Porter’s 5 Forces3. Bargaining power of customers

(buyers) – the ability of buyers to drive prices down caused by their number in the market, importance to the organization, and cost of switching

How powerful are the buyers? How many are there? Can the buyers get costs down? Do they have the power to dictate

terms?

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Porter’s 5 Forces4. Bargaining power of suppliers –

the ability of suppliers to drive prices up caused by their number, relative size and strength, uniqueness of their product or service, and cost of switching

Examine how many suppliers are in the market?

Are there a few who control prices? Or many so prices are lower? Do your suppliers hold the power? How easy is it to switch, what’s the

cost?

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Porter’s 5 Forces

5. Intensity of competitive rivalry – the main driver is the number and capability of competitors in the market; many competitors, offering undifferentiated products and services reduce market’s attractiveness

What’s the level of competition in this sector?

Is it a commodity market?

Sustainability Strategies

Planning for longevity.

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Growth Strategies Growth strategies:

Organic growth Research and development – the

cradle of innovation and staying in the business

Cost-Benefit Analysis Outside sources:

Mergers – combining companies Acquisitions – acquiring companies Strategic alliances – independent

organizations that pursue the same goals together

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Growth Strategies Contingency Strategies

Definition – a risk management strategy that aims to minimize the impact of a foreseeable events and to plan for how the business will resume normal operations after such events

Types: Preparing for predictable and

quantifiable crises Preparing for unexpected and

unwelcome events

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The Project – Business Plan

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Define Environment Describe Industry PESTLE Porter’s 5 Forces

Analysis

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