An Overview Of Tools For Analyzing An Organization’s Current Situation

Analyzing Current Situation

Analyzing Current Situation

Analyzing current situation entailsthe evaluation of the present and future strengths, weaknesses, opportunities, and threats of the organization (Heizer, 2016). Conducting the analysis involves the use of theories, tools, principles, and models in measuring out the current conditions of the organization.Current situations in the firm may includeGlobalization which is the interaction among people and organizations. It is enhanced by reduced trade barriers, improvement in IT, and transport (Kerzner, 2013). To remain competitive, firms must learn to improve quality while at the same time lowering prices. Innovation is the primary key to success to any organization. Secondly, sustainabilitywhich entailsthe ability of a firm to sustain current practices while not putting future resources at risk (Katal, Wazid, &Goudar, 2013, August). The three pillars that must beconsidered include social, economic and environmental factors. The company should limit itself to the outcome of each pillar. Thirdly, there should also be effective communication which involves understanding both oral, written and non-verbal communication for the organization to be successful and achieve its goals. Fourthly, the firm should be able to come up with a system design that is in a position to produce high-quality products and services that meet the quality as well as the quantity demanded within a stipulated timeframe.

The current situation can be analyzed using various tools which include SWOT analysis, PESTLE analysis, Porter’s five forces analysis, four corner’s analysis, value chain analysis, early warning analysis, and wargaming.

SWOT Analysis

The SWOT analysis model is a broadly used tool that assists in understandingthe strengths, weaknesses, opportunities, and threats in the firm. After doing the SWOT analysis, the company should access on how to major on its strengths, minimizeits weaknesses, utilize its opportunities and lower impacts of any threats (Goetsch, & Davis, 2014). The process begins by identifying the objectives of theorganizationand determiningboth the interior and exterior factors that are necessary for the firm to achieve its goal. The interior factors include the expertise and faults of the organization while the exterior factors include the opportunities and threats that the organization faces.

An organization should be aware that opportunities can also be threats (Antony, 2012). For example, new markets could be dominated by competitors, sabotaging the position of a firm. Equivalently, threats can also be perceived as opportunities. For example, a new competitor who grows swiftly opening new markets for the firm’s products and services would assist the business to improve its performance.

Models of Analyzing Current Situation

The SWOT analysis tool provides a clear basis to examine the organization’s performance and potentials. Additionally, it is also used when preparing to raise capital or bring consultants for reviews. Once all the data is collected, it is entered into a simple table, a 2*2 matrix.

Strengths · What does the organization do better than others? · What does the firm do best than other firms? · What do the organization’s customers and competitors view as its strengths? · What makes the organization competitive?	Weaknesses · What could be avoided? · What could be improved? · What do things add small or no worth to the organization? · What does the firm’s client see as its weaknesses?
Threats · What barriers does the company face? · What is it that the firm’s competitor is doing? · Does the change in technology threaten the organization? · Are the quality standards for the company’s products changing?	Opportunities · Which are the best opportunities that the firm can spot? · Where is the unfulfilled demand in the market? · What possible invention could the firm contribute to the market?

When considering the company’s strengths, they should be related regarding the firm’s competitors. For instance, if all the firm’s competitors manufacture products and services that are of maximum standard, the high quality is not the strength of the organization but a necessity (Krajewski, Ritzman, & Malhotra, 2013). The same case applies when looking at the strengths and opportunities of the organization. Look at its strength and figure out if it gives the firm access to new opportunities and alternatively, look at the weaknesses of the company and see if there are chances of opening up new possibilities once the weak shortcomings are eliminated. To conclude, the SWOT analysis also helps the organization understand their competitors, giving the firm areas that need improvement and put it in a good competitive position.

In its expanded nature, PESTLE standards for Political, Economic, Social, Technological, Legal, and Environmental. PESTLE is both a marketing principle, as well as a tool used by organizations to ensure their performance (Ho, 2014). It gives the firm a wholesome view from distinct angles which it needs to keep track. Critical questions are asked when using this model, giving individual ideas on things that they should bear in mind. The questions include:What are the current economic factors?What is the current political situation and does it affect the firm?What effect does culture have on the market of the firm’s products?What change in technology is likely to take place and how will it affect the organization?What are laws that regulate the organization and is there a possibility of changing them?What are the concerns of the organization on the environment?

All the aspects above help the organization account for its goals and its strategies as well as defining what the organization should do about them. This tool creates a better understanding of the SWOT technique thus the organization should understand the deep meaning of PESTLE as shown:

First, political factors show the extent towhich the government may have an impact on the performance of the firm (Wahyuni, 2012). The political factors may include; tax policies, Fiscal policies, and trade tariffs. For instance, the government may apply new tax whereby the entire revenue generating structure has or might be changed.

SWOT Analysis

Secondly, economic factors such as the rise in inflation of an economy would be a key determinant on how the firm sets prices for their products and services. Also, it affects the power to purchase products by the consumer by changing the demand or supply patterns of the economy. Other factors include interest rates affecting the rate of borrowing, economic growth trends. The factors determine the performance of the economy which has a direct impact on the fulfillment of the organization and results in long-term effects. Thirdly, the social factors try to reflect on the social environment and measures determinants like population and cultural trends that affect the purchase of the organization’s products.

Fourthly, technology alludes to change in technology that may largely impact operations of the organization (Chan, Estève, Fourniols, Escriba, & Campo, 2012). It involves the level ofinnovation and knows how that a firm owns.  Fifth, the legal matters take into account both the exterior and interior sides. Exteriorlawsaffect the environment of theorganization while the internal laws the organization maintains them for themselves. They include consumer laws, safety standards, and labor laws.The environmental factors include but not limited to weather, climate changes, environmental offsets or even geographical location.

The model which was named after Michael E. Porter helps identify and analyze five competitive forces that contribute to shaping theorganization, determining the strengths and weaknesses of the organization. The model helps define why various firms are capable of maintaining varying levels of profitability. The forces that Porter identified determine the attractiveness and profitability of the firm. The effects include:

Competition in the industry has an advantage regarding the number of contestants and their ability to threaten the organization. The more the competitors, associated with the quantity of products and services that they make available, it dictates the superiority of the firm. Suppliers normally lookout for a company’s competitiveness if they are unable to choose the best firm to compete with.

The possibility of new entrants into the market that an organization is involved in reduces its power. Its position is lowered even further if cost and time of a competitor to enter into a market is less as compared to the powers of the company. New entrants are leading to erosion of the profitability levels.

The number of suppliershows how easily a competitor can influence prices of products and services by bringing them high. Price is affected by the aspects of the goods and services and how unique is their quality affected by different suppliers. The fewer the suppliers, the more power an organization holds.

PESTLE Analysis

The power of customer is associated with the capacity of the customers to bring prices down. This is determined by the number of buyers a company has, how important are each client and the cost incurred for a customer to opt for another company. Lastly,there is a threat of substitute products that increase the chances of customers of an organization to switch to the other alternatives in case the prices rise.

Four Corner’s analysis is a tool that is used to analyze opponents. It shows that the reason for the study should be to give an idea about the future (Bonnans, & Shapiro, 2013). The model helps determine the response of the competitor moves that other opponent might undertake, competitor’s response to changes in technology and environment, and develop a profile of some of the changes that the competitor might take and to what extent would they be satisfied. When carrying out SWOT analysis, motivation factors are ignored but are the ones that do encourage the organization’s opponent.

The four components essential in analyzing the competitor are;Motivation- drivers determine if the company’s competitors are satisfied with their performance at present. Hence the firm can predict some of the changes they would make. The second component is a motivation-management assumption that helps in identifying the assumptions that a competitor has about the firm or other competitors, influencing their decision (Tomlinson, & Kiss, 2013). Analyses of the assumptions would help the firm to determine theiropponent’s blind spot.Also, action-strategies of a firm decide how they will compete in the market. In instances that the current approach yields good performance, we would expect that the opponent would continue to compete in the same manner as before. Finally, action-capabilities of an organization will determine their ability to answer to the external forces.

For an individual to make a good judgment, it is of wise to perceive how the processes in the organization add value to its customers. That is why value analysis is necessary. The investigation is based on the fact that firms exist to conceivequality for their clients (Mills, 2017). The process involves grouping values depending on the way they add value. Every activity that adds value to the organization is considered a competitive advantage against the competitors. The analysis involves three steps. The first step entailsdistinguishing between primary and support activities involved. Activities involved inthe creation of a product are primary while those that support the main activities are called support activities. There is also need to allocate costs to each activity to provide information to managers about capabilities of a firm. Meanwhile, there is the step of identifying activities critical to customer satisfaction and market issues. They involve the organization’s mission, the type of industry, and system value.

Porter’s 5 Forces

Operational problems are grouped into three broad categories; the strategic problem is an issue that requires a different approach, besides procurement, new business model or even new location of a firm. The problem needs its technical team with realistic timetables depending on the magnitude (Kaisler, Armour, Espinosa, & Money, 2013, January). They require enough resources, proper assessment before being executed. The projects involve many departments, but meanwhile, they are defined by their importance.

Interdepartmental problems are tactical but are solved by allocating a project manager to push the solution forward where it involves members of the department who need to be part of the solution, while departmental problems are problems that require being solved within a department of an organization.

Fishbone diagrams also referred to as cause and effect analysis. The toolis used to address a problem by dissecting it into four contributing sources approach (Olivares, & Lopes, 2012). The horizontal line indicates the main cause while the other horizontal lines coming out of it indicate the causes which may have other sublines showing the possible causes. The four contributing issues include machinery and equipment, people, materials, and methods.The four sources allow the user to drill even deeper and identify the likely causes relating to that cause. When the fishbone diagram is complete, with all possible causes recorded, the hypothesis is tested to find out if they are valid causes. The process should then indicate some actual causes of the identified problem.

Five whys problem-solving process involve defining the problem by asking yourself why that is the case, or why is the problem the way it is. Once the cause has been identified for the problem and put down in writing, you ask yourself again why that is the case. You repeat the process five times until the primary cause has been identified. However, the technique is most useful when solving simple problems.

Root cause analysis involves analyzing the effects and the symptoms of the process and tracking the issues back to their leading causes of what initially led to the reason of the problem. At first, data has to be collected to be able to understand what is taking place. Once the major cause has been identified, it is tested to ascertain its validity.

Pareto principle and Pareto charts give rise to the start of simple data analysis of a given process, providing an early identification of a problem cause without much of analysis. The principle states that 80% effects are as a result of only 20% of the causes.

Below is a table listing steps to be taken to achieve the goals. It clarifies the resources necessary to attain a goal and formulates a timeline when major tasks need to be completed. 

Time	Objective	Action
1-3 months	To find out the operational problems within the organization.	Researching within the organization.
4-7 months	To find out all the causes of the operational problems.	Analyzing the operational problems.
8-9 months	To make sure that all the causes have been identified.	Conducting a cross-analysis of the operational problem.
10-11 months	To find out the best solution to the problem.	Coming up with measures that address the problem.
12-15 months	To solve or lower impacts of the problem.	Implementing the identified measures.
16-17 months	To find out if the measures are effective enough.	Conducting an audit of each result of solving the problem.
18-19 months.	To find out if the problem reoccurs.	Evaluating the firm’s performance.

The firm should focus on the cause and not the symptoms of a problem. Symptoms of a problem are more visible to business as compared to the main reasons. In case of a problem, the firm has the mandate of conducting a detailed investigation and find out what is causing the problem to take place. The firm should also turn-off all the key causes to a problem. The firm should not mistake control for resolution. When the company detects a problem, it should be monitored (Abramov, 2015, September). A short-termaction may remain in place for a while as the firm looks into other emerging issues. The company should audit each result of solving a problem. Once the firm has solved a problem, it should conduct cross-check up measures to ensure that the problem has been fully solved. The firm should not over-adjust. When the problem reappears, the organization may take action of changing the activities to solve the problem. It is wise to identify the problem that occurred due to failed containment or due to the process being faulty, before thinking of any adjustments.

Conclusion

In conclusion, when evaluating any current situation or when identifying the various organizational problems, it is always wise to conduct an analysis using various tools to determine the causes of the problems. This approach enables a company to come up with an effective plan for lowering or eliminating the problem and eventually contributes to the success of any firm. An analysis of the current situation is also important for the organization to identify its weaknesses, opportunities, threats, and their strengths. The study would help the firm determine the areas that it would improve on and take advantage of new opportunities. All this analysis are necessary for the organization to achieve its goals, remain competitive among its opponents, and provide good quality products to its customers.

References

Abramov, O. Y. (2015, September). TRIZ-Based Cause and Effect Chains Analysis vs Root Cause Analysis. In Proceedings of TRIZFest-2015 Conference, Seoul, South Korea (pp. 283-291).

Antony, J. (2012). A SWOT analysis on Six Sigma: some perspectives from leading academics and practitioners. International Journal of Productivity and Performance Management, 61(6), 691-698.

Bonnans, J. F., & Shapiro, A. (2013). Perturbation analysis of optimization problems. Springer Science & Business Media.

Chan, M., Estève, D., Fourniols, J. Y., Escriba, C., & Campo, E. (2012). Smart wearable systems: Current status and future challenges. Artificial intelligence in medicine, 56(3), 137-156.

Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence. Upper Saddle River, NJ: pearson.

Heizer, J. (2016). Operations Management, 11/e. Pearson Education India.

Ho, J. K. K. (2014). Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), 6478-6492.

Kaisler, S., Armour, F., Espinosa, J. A., & Money, W. (2013, January). Big data: Issues and challenges moving forward. In System Sciences (HICSS), 2013 46th Hawaii International Conference on (pp. 995-1004). IEEE.

Katal, A., Wazid, M., &Goudar, R. H. (2013, August). Big data: issues, challenges, tools and good practices. In Contemporary Computing (IC3), 2013 Sixth International Conference on (pp. 404-409). IEEE.

Kerzner, H. (2013). Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.

Krajewski, L. J., Ritzman, L. P., & Malhotra, M. K. (2013). Operations management: processes and supply chains (Vol. 1). New York, NY: Pearson.

Mills, A. J. (2017). Studying the Gendering of Organizational Culture over Time: Concerns, Issues, and Strategies?. In Insights and Research on the Study of Gender and Intersectionality in International Airline Cultures (pp. 71-91). Emerald Publishing Limited.

Olivares, I. R. B., & Lopes, F. A. (2012). Essential steps to providing reliable results using the analytical quality assurance cycle. TrAC Trends in Analytical Chemistry, 35, 109-121.

Tomlinson, R., & Kiss, I. (Eds.). (2013). Rethinking the process of operational research & systems analysis. Elsevier.

Wahyuni, D. (2012). The research design maze: Understanding paradigms, cases, methods and methodologies.