A Complete Analysis of Organizational Assessment Tools Sample Paper for Students

Introduction

Assessment tools are essential models and techniques that a company uses to comprehend the organizational environment and positive strategies about a business. The SWOT analysis, PESTLE analysis, and Porter’s Five Forces framework are some of the different analysis tools available and frequently used in a company study. We asked online essay experts from WriteMyPaperHub to write a high-quality analysis paper about organizational assessment tools for our audience, – and they gladly helped us with the following sample which can be used by college and university students in education.

SWOT Analysis

SWOT analysis is a tool crucial in strategic management and planning in an organization. The device examines a company’s resource capabilities, insufficiencies, market opportunities, and external threats. Gürel and Tat (2017) affirm that the method is essential in situational analysis, thus providing managers with crucial information about an organizational internal and external factor. The SWOT analysis consists of four components that are Strengths, Weaknesses, Opportunities, and Threats. Organizational strengths refer to attributes that give a company an advantage over others. Weaknesses refer to the characteristics that make a company disadvantaged when compared to others. On the other hand, opportunities comprise external elements that benefit an organization, while threats are external factors that may cause problems for organizations in the future (Gürel and Tat, 2017).

• Advantages. The SWOT analysis is advantageous as it enables organizations to focus on the negative and positive aspects of a company’s internal and external environment. The tool allows organizations to identify weaknesses and threats, thus finding suitable solutions to eliminate the disadvantages. The model enables organizations to plan by examining risks and fining a strategic solution to deal with future problems. Additionally, the tool is simple, and the organization can apply it at the organizational, national, individual, and international levels. 
• Disadvantages. However, SWOT analysis has limitations because it does not prioritize relevant and urgent concerns to address. The analysis tool only provides an organization with problems, strengths, and weaknesses but fails to offer solutions or alternative decisions to eliminate issues (Gürel and Tat, 2017). Additionally, the tool only provides for categories to define and generalize organizational attributes, which may lead to poor decision making. The information collected may become subjective, as the tool is prone to bias in the analysis process (Gürel and Tat, 2017).

PEST Analysis

The PEST analysis is an acronym that refers to the political, economic, social, and technological aspects of an organization. Sammut‐Bonnici and Galea (2015) affirm that the tool is powerful and commonly used to identify and comprehend strategic threats. The political factors analyze the negative and positive impacts of policies developed by governments in a specific region. Economic elements examine issues such as the Gross domestic product (GDP) influence on an organization (Sammut‐Bonnici and Galea, 2015). The tool also examines social concepts such as demographics, population, consumer tastes, attitudes, and the level of demand for particular services and goods. Technological factors in the analysis deal with the rate of innovations, changes, and advancements in technology. Moreover, the tool analyses legal and environmental factors that influence the operation of an organization (Parikh, 2017). 

• Advantages. PESTLE analysis is advantageous as it is easy to understand and easy to implement. The tool is vital as it assists organizations in utilizing profitable opportunities that arise due to changes in the external environment. The analysis model allows an organization to prepare for the rate that may occur due to changes in external factors such as policies or consumer patterns.
• Disadvantages. The disadvantages of utilizing the PESTLE analysis occur due to the rapid changes in external factors (Parikh, 2017). The changes in the environment, policies, and social factors occur rapidly, which may make it challenging to perform company analysis. The tool is expensive to utilize as it leads to high costs in terms of time, human resources, and financial resources relevant in the analysis process (Parikh, 2017).

Porter’s Five Forces Analysis

Dälken (2014) posits that Porter’s Five Forces is a dominant assessment tool critical in the analysis of contemporary industry profitability. The device is essential in analyzing and understanding the forces in the environment that affect a company’s profitability. Porter’s Five Forces examines competition, bargaining power of suppliers, bargaining power of the buyer, threats of substitutes, and the threats of new entrants in the market. Competition in the industry analyzes the number of competitors and their ability to destabilize an organization.

The risks of new entrants deal with profitability, access to resources, and the decrease in demand for an organization. The bargaining power of suppliers examines the influence of suppliers when they increase the prices for goods and services. Additionally, the bargaining power of the customers analyzes how the high market power for buyers affect the prices of products and organizational profits. The tool also examines how substitutes threaten the organization through the introduction of products and services that fulfill the same function.  

• Advantages. Porter’s Five Forces is beneficial as it allows companies to state their attractiveness and profitability (Dälken, 2014). An organization can realize its strengths and weaknesses, thus formulate plans to strengthen its position in the market. The tool allows managers to assess and evaluate the interactions of competitors in the market. 
• Disadvantages. However, the tool is limited, as it does not account for time hence making it difficult for markets with high competition as the change occurs rapidly. The assessment tool does not guarantee a competitive advantage that can be sustained (Dälken, 2014). Furthermore, the device does not consider the resources and capabilities of the company, which are crucial in analyzing overall profitability.

Assessment Tools in the Automotive Industry

As a brand manager in the automotive industry the SWOT analysis and Porter’s Five Forces, analysis tools will be essential in the analysis of the industry. The SWOT analysis provides a company with a platform to analyze both the external and internal environments of an organization. The internal review will aid in identifying the strengths of the industry, thus enabling the industry to find ways to strengthen its advantages (Gürel and Tat, 2017). The weaknesses will allow the industry to find solutions to their deficiencies hence gaining a competitive advantage over other companies.

On the other hand, the SWOT analysis will help the company to identify opportunities in the industry that will lead to the development of new products or services. External environment analysis offers information about threats such as the development of products that may reduce the demand for automotive products. Analyzing risks will enable the automotive industry to develop new strategies to advance technologies that will suit the needs of customers and preferences in the type of vehicles they will need in the future.

Porter’s Five Forces is also an essential tool that will aid the company gain crucial information about the competitors, the influence of the buyer and supplier’s bargaining powers (Dälken, 2014). Besides, the company will obtain information about the strategies that substitute’s use that may affect the profitability in the industry. Understanding the substitute strategy is vital for companies to develop new products that will suit the preference of the customers, thus reducing the need for substitute products and services in the automotive industry. 

Conclusion

The assessment tools are essential in the analysis process as they help organizations develop effective strategies in decision making and planning activities. The SWOT analysis tool enables organizations to analyze the internal and external environments that influence organizations. The PESTLE analysis focuses on the effect of the external factors in the operation and function of an organization. Additionally, the Porter’s Five Forces enable organizations to analyze their attractiveness and profitability in the market. Despite the limitations, all the assessment tools provide unique aspects in the analysis of a company

Reference List

• Dälken, F 2014, Are Porter’s five competitive forces still applicable? A critical examination concerning the relevance for today’s business. PhD thesis, University of Twente.
• Gürel, E & Tat, M 2017, “SWOT analysis: A theoretical review”, Journal of International Social Research, vol. 10, no. 51. doi:10.17719/jisr.2017.1832
• Parikh, V 2017, Advantages and disadvantages of PESTLE analysis. Available from: <https://www.letslearnfinance.com/advantages-disadvantages-pestle-analysis.html> [13 October 2019].
• Sammut‐Bonnici, T & Galea, D, 2015, PEST analysis. Wiley Encyclopedia of Management, pp.1-1. doi: 10.1002/9781118785317.weom120113