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Understanding the external situation and its influence on a certain company is one of the most significant tasks. To survive and reap the benefit, an organization must evaluate the existing conditions and use reliable and relevant methods. In this context, DISH Network is not an exception. However, large organizations assessment differs from that of the smaller companies, and it is important to select appropriate frameworks. In this paper, the combination of PEST and Porter’s 5 Forces analysis is examined as a suitable way to provide information concerning the external environment. The usage of the obtained results is described. Finally, the activities necessary for the external analysis at the macro-level and their connection with micro-level analysis endeavors are viewed.
PEST and Porter’s 5 Forces Analysis
In terms of external business environment assessment, PEST analysis is one of the most advantageous and common options (Gupta, 2013). What distinguishes this type of analysis is its orientation to external factors, namely political, economic, social, and technological ones, that make an impact on a company. PEST analysis gives a chance to concentrate on targeted areas of significance for large and small businesses.
However, many present-day industries tend to “consolidate around fewer but larger competitors” (Gupta, 2013, p. 15). The sphere of direct-broadcast satellite services fits this description (Negrine, 2013). PEST approach seems to be appropriate because it takes into account the most important criteria that help keep pace with competitors. It is especially essential about large companies: while small businesses have different goals and target audience, it is easy for a large company, such as DISH, to lose their clients and take losses.
Another type of analysis is Porter’s 5 Forces framework. It is also an effective tool to assess the external environment: one can understand not only the strengths of their current competitive position but also the potential strengths of the future position (Heger & Rohrbeck, 2012). As the name of the approach implies, five significant forces are identified to evaluate a certain business situation and industry: competition, new market actors’ capacity, suppliers’ influence, customers’ influence, and threats of alternative products.
The best strategy for DISH Network and other large companies is to combine PEST and Porter’s 5 Forces analysis. In the first stage, PEST analysis helps identify the environment, particularly competitors: as it has been demonstrated above, rivalry-related risks of a large company are high. On the second stage, 5 Forces analysis determines the exact opportunities connected with the revealed risks; in other words, the problems are addressed using corresponding measures consideration. For example, having studied the environment, DISH introduced the DISH Anywhere service: subscribers can watch programs recorded on their set-top box on other devices (DISH Anywhere, n.d.).
The Results of Macro-Level External Analysis and SWOT
After the analysis of the external environment is performed, it may be useful to refer to SWOT (strengths, weaknesses, opportunities, threats) approach to detect possible areas of development and danger. It is the company’s potential that becomes the most important issue.
PEST and SWOT frameworks differ in terms of their focuses. PEST analysis pertains to the most common external considerations relevant to all market actors. To put it in other words, the current situation is explored in many dimensions outside a certain company. The political landscape takes into account the employment laws, political issues, taxes, and regulations that influence the industry; economic factors refer to currency exchange, economic conditions, and monetary policy; distribution, consumer demographics, and trends are seen from the social perspective; technological factors include the availability of technologies that make a positive impact on the business (Aithal, 2015). All these factors are examined within SWOT analysis when opportunities and threats connected with politics, economy, society, and technological development are investigated. External issues are only a part of SWOT. The connection between SWOT and PEST approaches may be represented in the following way.
As for the correlation between SWOT and Porter’s 5 Forces analysis, the latter becomes one of the constituents of the former. While Porter’s 5 Forces analysis deals with the whole industry and provides much information about the threats posed by the competitors, SWOT analysis refers to a certain company. Thus, their combination is to identify the position of the organization (Aithal, 2015).
Since large organizations, such as DISH Network, have numerous factors that should be taken into account and threats are the vital component of the situation, it is beneficial to use this two-stage model to perform a SWOT analysis.
Micro- and Macro-Level Analysis
Taking into account the facts described earlier, one can state that DISH Network and similar organizations should pay attention to the methods of environmental assessment. The mixed analysis seems to be the preferable form of evaluation. It means that neither the interpretation of different facts within various sectors of life (PEST analysis) nor the set of factors shaping industry competition (Porter’s 5 Forces analysis) alone cannot give the exact picture of the situation on condition that a large company like DISH Network is assessed.
The macro-level analysis is only one side of the same coin. To be successful, a company should realize that the task of equal importance is to analyze the concrete processes within the organization. To put it differently, macro-and micro-level components are intertwined. It is a SWOT analysis that provides the opportunity to scrutinize and generalize the results obtained by considering the external conditions and internal processes.
Principal SWOT components, strengths, and weaknesses about the micro-level because the organization’s physical, financial, and human resources, its processes, past experiences, reputation, and market movements are unique and relevant to the inner structure (Brinkman, Navarro, & Harper, 2014). In this respect, the company’s macro-level analysis overlaps with the organization’s micro-level analysis efforts: being a separate marketeer, a company is not divided from other market actors and the whole market. For instance, DISH Network acts as one of the American direct-broadcast satellite service providers and complies with the macro-level processes that take place in this sphere.
It has to watch its competitors (Comcast, DirecTV, and so on) and respond to the audience’s demands. At the same time, the company should consider its policy, terms of service use, image, and other issues. For example, the company makes decisions concerning new services: recently, live TV watching via DISH Anywhere has been introduced (DISH Anywhere, n.d.).
To sum it up, the environmental assessment plays a significant role in any organization. In the case of DISH Network and other large organizations, the two-stages model including PEST and Porter’s 5 Forces analysis proves to be beneficial to assess various aspects important for a big company. The macro-level analysis is an integral part of SWOT analysis that describes external and internal components and allows to design the future strategy.
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Aithal, P. S. (2015). A new ABCD technique to analyze business models & concepts. International Journal of Management, IT, and Engineering, 5(4), 1-15.
Brinkman, J., Navarro, I., & Harper, D. (2014). Unlocking the business environment. New York, NY: Routledge.
DISH Anywhere. (n.d.). Frequently asked questions. Web.
Gupta, A. (2013). Environmental and PEST analysis: An approach to the external business environment. Merit Research Journal of Art, Social Science and Humanities, 1(2), 13-17.
Heger, T., & Rohrbeck, R. (2012). Strategic foresight for collaborative exploration of new business fields. Technological Forecasting and Social Change, 79(5), 819-831.
Negrine, R. (2013). Satellite broadcasting: The politics and implications of the new media. New York, NY: Routledge.