1.

3 Pros and Cons of PESTEL Analysis

Pros: Firstly, this analysis tool is helpful to evaluate the factors affect to the organization. It is simple and
easy to use for the case analysis of the business. Secondly, the company could have clearly understanding
about the impaction and affection of the outside threat to the organization. Thirdly, it help the
organization improve and develop their strategic thinking. Fourthly, the organization could identify the
new opportunities in order to make the business succeed. Finally, company could use this tool to assess
the national and global markets to have the overview about the business environment in the market(Free-
management-ebooks,2017)

Cons: It takes time to evaluate and the company has to use that tool regularly. Next, the information
about external factors is very difficult to collect because of the cost and some information in hard to
access. The making decision processes are usually based on data subjective. Then, PESTEL Analysis is
not enough to make the strategic planning because it just scan the external environment and it ignores the
internal environment, competition strengths and weakness…If the company wants to set the fully
strategic planning, they should use both PESTEL or other tools such as SWOT to collect and evaluate
clearly the situation of company and the market (Edward G.,2010).

Pros and cons of Porter’s five forces model:

Pros: This model help the company could understand what they already have, their strengths and
weakness with theirs competitors. Secondly, it provides the overview about the market and how to reduce
the damage of its business from outside factors. The model is emphasizes both on internal and external
factors based on those information, the company could make their own thinking about what they are
going to do in the future.(Provemodels,2017).

Cons: This model is suitable for the stable industries; it is very difficult for applying in the distemper
industries. Next, it cannot apply for small group or small market level. This model just help the company
brainstorm their idea and it cannot use to determine the plan with certainly. (Boundless,2017).

Pros and Cons of Value Chain:

Pros: Firstly, this tool helps the company make the advantage competition on cost and differentiation.
Secondly, based on the result of SWOT Analysis, the company could use Value Chain Analysis in order
to compare the business model with its competitors and having the clearer understand about strength and
weakness of the company (Simister P.,2011). Thirdly, Value Chain Analysis is flexibility; it could be
used for lot types of business such as Manufacturing, Retail, Services and so on. The company could use
this tool in order to consider about the business, the competitors and the industry. Finally, when they
company could manage their value chain, they could reduce the time and optimize the time for customers.
The Marketing, Sales and Servicing process is very important to build the strong relationship with
customers. The company could use the promotion, reward to make the customers loyalty and convince
them to buy the products over time. The services are also efficient to ensure the satisfaction of customers.

Cons: This tools waste too much time to analysis because it requires the comprehensive analysis from all
business activities of the organization (Research-Methodology,n.d).Next, in some cases, the information
requires in order to do the analysis in suitable way is difficult to find. Finally, because of the developing
of technology, economy and the global situation are changing every day. The managers have to change
their value chain based on the changing of the business environment. If the company wants to set the
long-term plan, the value chain is not efficient or the company will spend a lot money to change the their
value chain and get-up their employees to perform the value chain.
References lists:

Free-management-ebooks(2017) Advantages and Disadvantages [www.] Available from:

http://www.free-management-ebooks.com/faqst/pestle-09.htm

Edwards G.(2010) Limitations of a PEST Analysis [www.] Available from:

http://www.brighthubpm.com/project-planning/100700-limitations-of-a-pest-analysis/

Provenmodel (2017) five forces [www.] Available from: https://www.provenmodels.com/25/five-

forces/michael-e.-porter

Boundless(2017) Limitations of the Five-Forces views [www.] Available from:

https://www.boundless.com/management/textbooks/boundless-management-textbook/strategic-
management-12/external-inputs-to-strategy-87/limitations-of-the-five-forces-view-421-881/
Simister P. (2011) Advantages & Disadvantages Of Value Chain Analysis [www.] Available from:

http://www.differentiateyourbusiness.co.uk/the-advantages-disadvantages-of-value-chain-analysis

Research-Methodology (n.d) Value Chain Analysis [www.] Available from:

http://research-methodology.net/theory/strategy/value-chain-analysis-2/