Analysis of data is one of the most important part of decision making in any project. It is therefore mandatory that one uses the correct methods of data analysis that give him the best results. My choice of data analysis tools was a difficult choice to make owing to the numerous analysis tools. Of all the data analysis tools that exist, I felt that the PEST analysis and porters five analysis were the best tools analyze my data and give an analysis of an industry and its competitors. After the discussion we had, I discovered some more analysis tools that could be used to evaluate an industry and their merits. However, none of these other methods provide rational and effective analysis like the PEST analysis and the Porters five tools.
The PEST analysis involves analyzing an industry according to the political, economic, social, and technological grounds. This analysis provides a detailed report on the factors that contribute to the success or failure of an industry. This analysis provides an accurate platform to analyze the macro-environmental factors that affect the affairs of an industry. The PEST analysis is not only important in analyzing the risks that an industry faces when investing at a certain location but also in evaluating the environmental factors that might lead to the success or failure of an industry in a location. It offers insight on investment in different places factors that might affect the success of the industry at a certain point to help in the planning process. The PEST analysis is applicable in both the main management of a company and the departmental management of an industry. It helps the departments of a company relate their work to a certain objective knowing the challenges to expect in a given environment. PEST analysis is compatible with many other analysis tools.
The porter five-analysis method is useful in analyzing the competition levels of a given industry. It is useful in evaluating the advancement of competitors and the saturation levels of a certain market to ensure the investor has insight on what to expect in terms of competition. It helps analyze the probable profits one is to make when an industry is set up at a certain location. Unlike the PEST analysis, the porter five analysis helps in the analysis of the Microeconomic factors that affect the growth of an industry. They include an analysis of the companys ability to serve its customers and make profits, which is an important tool to ensure the profitability of a company. It includes analyzing the company in three dimensions. The horizontal competition provides an insight into the threat of substitute products to outdo a certain market, the existing competitors and new entrants into a certain market. It also includes an analysis of vertical competition, which is the clients bargaining power and the suppliers bargaining power. This analysis tool provides an insight into the factors that might affect the industry directly.
The other method that was suggested was the SWOT analysis method, which involves an analysis of the strengths weaknesses opportunities and threats of running a company. The SWOT analysis is a good analysis tool but is not compatible with other analysis tools. Combining the PEST analysis tool and the Porters analysis tool, ensures that one has accurate insight of the the macroeconomic factors and the microeconomic factors that affect the efficiency of running a company. These two tools ensure that considers all the relevant factors that affect the success of an industry.
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