Introduction
This course unit is rather exciting and fascinating for me to study. For some time, I have been experiencing an interest in the business sphere after my friends started working on their startups. Seeing someone rather close to me getting engaged in the business world made me feel more connected and inspired me to learn more about that matter. Therefore, when the course began, I had certain hopes that it would help to achieve a deeper understanding of entrepreneurship. Moreover, I expected to develop some amount of critical thinking so that I could analyze and evaluate companies and the processes that operate in them. For now, I got a great comprehension of business aspects such as PESTEL and added value.
One of my best and most effective learning methods are lectures and self-directed learning. I enjoy listening to new material, especially since it is easier for me to comprehend the information that way. I feel engaged during this study format, making it possible to concentrate on the present moment. After classes, if something was unclear or I forgot some information presented, I preferred searching for additional facts in books and other study material. Sometimes I find specific video lectures and explanations useful if I struggle to understand some topic. Thus, the following paper reflects on the recent study processes and performs two case studies to demonstrate the proactive attitude to learning.
PESTEL
Evolvement of Understanding
Examining external sources and elements that affect a business’s internal operations is known as environmental scanning. Its goal is to locate prospective sources that decision-makers can consult or consider (Indeed Editorial Team, 2021). It helps those involved in decision-making, such as corporate executives and leaders, comprehend problems that might negatively influence the firm (Indeed Editorial Team, 2021). The activities of rival companies, the political climate, changes in the regulatory environment, and the environment in general within which the business works are a few examples of elements that may influence an organization’s performance. Routine environmental scanning is essential for companies of all sizes and various sectors. This enables them to see possible dangers and possibilities as well as the company’s and its rivals’ strengths and shortcomings.
Understanding these aspects of a company and the setting in which it works may aid executives and anyone involved in the organization’s strategic decision-making. The benefit of this strategy for marketing departments is that it enables them to understand better the tactics used by rivals (Indeed Editorial Team, 2021). Scanning the surroundings may assist me in learning more about the behaviors taking place there. Scanning the surroundings is crucial to learn information about the behaviors of rivals and use that knowledge in the positioning plan (Indeed Editorial Team, 2021). Marketing a service or product frequently necessitates that the offering is positioned as greater or more alluring than anything provided by competitors. The information gleaned by environmental scanning may be crucial to the company’s long-term strategy, including any plans for expansion or scalability.
Application to Projects and Career
A basic spreadsheet or pen and paper can be used to accomplish PESTEL analysis, while extra applications can assist organize input and comments. The PESTEL analysis is very simple and has only one expense: time. It is discretionary how much PESTEL analysis the company performs, how frequently it performs it, and how much research is required (What is a PESTEL analysis, no date). However, the cost to complete any stage of the research is not subject to change. Whereas a team can produce better findings, a person can also effectively complete the analysis.
Without a PESTEL study, environments that directly and indirectly affect the company might be ignored. For instance, when creating the prototype for the product, it is possible to forget about consumer protection regulations and safety. It is crucial to be unaware of the technological challenges that rural clients experience compared to those in densely populated places (Pathak, 2020). Alternatively, even if the product performs admirably in its current setting, exporting it to another part of the country can be financially disastrous. PESTEL analysis aids in examining a variety of important variables that may have an impact on the effectiveness of product announcements (Pathak, 2020). It promotes the growth of strategic planning for a more in-depth comprehension of strategic planning.
While PESTEL may be used to assess businesses broadly, it is also applied more specifically to certain goods, marketing strategies, and client relationships. PESTEL analysis, in particular, may make potential risks more visible when applied to innovations within the company, whether a current rival, a potential rival, or one of the items. Using PESTEL analysis allows for carefully assessing changes and creating a strategy to minimize potential profit growth or loss. Without it, the company can experience what seems to be an unforeseen threat.
External opportunities are frequent and may be recognized and taken advantage of by employing PESTEL analysis to examine external surroundings and a firm’s operations (model). An effective outreach strategy offers the chance to win over the users’ businesses before anybody else. Prior to completing the PESTEL analysis, identify the cause, whether it is to develop a company concept or to have a deeper understanding of the target market. PESTEL analysis may produce unimpressive results for no apparent reason.
Review of Learnt Material
PESTEL ‘s ability to assist with marketing as well as strategic thinking is one of its many wonderful features. Identifying the outside forces influencing or having an influence on a firm might help marketing and advertising. However, it is vital to be comprehensive. The secret to doing a PESTEL is that it is not what happens throughout the PESTEL. It all depends on how to employ the result. The data ought to influence SWOT, overall strategy, and, eventually, the business’s success. PESTEL is essential because staying aware of external developments is necessary to stay competitive and move more easily through difficult times. The true value lies in using a PESTEL with a SWOT analysis to discover Opportunities and threats. It ought to influence SWOT (Indeed Editorial Team (2021). Employing it this way makes it crucial to think more cohesively about the plan.
Adding Value
Review of Learnt Material
Businesses need to add value since it allows them to turn a profit. Then, it may generate more revenue when it outperforms its rivals and keeps up over time. Businesses meet consumers’ needs and want through their products and services. They increase the value of the input to generate a profit. They transform the input into a more valuable product. In this manner, companies may sell their goods for more money than they paid for the input. To cut a long tale short, they need to add value in order to profit. If clients are ready to pay a price greater than what a firm charges its input suppliers, it will succeed in producing value (Nasrudin, 2022).
However, they also need to take competition into account while generating value. Businesses must also produce a higher value than rivals in order to exceed them in maximizing those earnings. They must provide customers with higher value creation. As a result, customers purchase their items over those of their rivals. Additionally, a business acquires a competitive edge if it can outperform rivals and produce a better rate of profit, as shown by return on invested capital, than rivals. The business creates a long-term competitive advantage if it can retain it over time.
For example, the brand creates a product that sells well. Customers think their items are better valued than the competition. Due to these factors, they are more inclined to purchase and suggest their items to friends and family. Strong long-term connections with its clients are possible if the business constantly provides higher value over time (Oliver, 2019). Customers get devoted to the brand’s goods as a result. The firm will thus be able to cut expenditures for its advertising and promotional efforts, for instance, when it introduces a new product in the near future (Oliver, 2019). The business can persuade its current consumers to purchase its new product without spending much money on advertising since they know and trust the business.
Additionally, devoted clients are more willing to tout and advocate for their new items. Therefore, the firm benefits more from the same campaign at the same expenditure. Therefore, keeping a client generally costs less than finding a new one. Intense advertising is frequently needed to get new customers to make purchases. Customers are prepared to pay for products not only for their practical advantages but also for their expressive and emotional ones. If consumers believe a product, for example, suits their style or beliefs or promotes pleasant self-associations, they are much more inclined to invest more money in it.
For instance, a business sells a luxury item, and customers will be more content and delighted to purchase it at a greater price. It took place as a result of the greater price raising their social standing and reputation. Positive connections tend to affect consumers’ product choices. For instance, customers who respect and adhere to sustainability ideals do not randomly select items. They will only purchase goods that satisfy their requirements. Sustainability is a factor that is becoming more and more important as more customers accept it.
Evolvement of Understanding
During the case, I had a deeper understanding of the added value and its role in the business sphere. I learned that it could be extremely beneficial for the company, so it is worth special attention. Adding value might be subtle; for instance, outsourcing is generally not a smart option if a product is built on private technology or prized intellectual property. Additionally, ethical issues deserve attention. Suppose a corporation is linked to shady practices like sweatshop manufacturing, child labor, or ecologically harmful manufacturing procedures, all of which are common at some outsourcers. In that case, the company’s reputation may suffer significantly (Schwarting & Weissbarth, 2011). Therefore, added value is a crucial and responsible strategic aspect of business that requires decent research and thorough planning.
Application to Projects and Career
Added value is significant for the business; I should consider this aspect if I want to have my own. For instance, by studying the competitors, I can find out what makes the company attractive to current and future clients. Positive relationships are important when it comes to business. One day, the connections might act as a springboard for further ventures. Another strategy to give something back as a reward and increase brand value is to reward brand loyalty (CFI Team, 2022). It becomes possible to double or treble the consumer base and establish a rapport by showing someone who values them and establishing that first relationship.
Having able to provide individuals with a service or good may be quite beneficial for both clients and the company. Considering it for a moment, there should be a valuable service to offer that can be able to provide for free or at a minimal cost to someone. From the perspective of the customer, a company’s brand value will increase if it is recognized that it offers useful information or a fantastic product. Receiving client feedback and acting on it will be very important since it will show them that I care. A firm starts to fail when it disregards its customers’ demands and wishes. Serving clients is vital to keep in mind because they are what keep business going.
Conclusion
Overall, this assignment taught me more about analysis and how to perform it starting from the simplest tasks and questions. I realized that evaluation of the current processes is important for future progress, and it is helpful to review the work done along the way. Reviewing the results of the studies allows me to see the achievement that has been made, which inspires me to continue learning and also indicate the gaps in knowledge that needs to be filled. This approach is effective to implement in further academic and professional goals since it provides a wholesome picture of the situation and gives a chance for improvement. As a result of this exercise, I had a different view of the learning process. I understood that it is crucial to study hard and be conscious and analytical to achieve success.
Reference List
CFI Team (2022) Value added. Web.
Indeed Editorial Team (2021) What Is Environmental Scanning? (Importance and Applications). Web.
Nasrudin, A (2022) Why is adding value important for a business? Web.
Oliver, C (2019) Why adding value to your brand is important. Web.
Pathak, R (2020) What is PESTLE Analysis? Everything you need to know about it. Web.
Schwarting, D., & Weissbarth, R (2011) Make or buy. Three pillars of sound decision making. New York: Booz & Company.
What is a PESTEL analysis? (no date). Web.