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SWOT, PESTLE and Waterfall Analysis

The Management Pocketbooks Pocket Correspondence Course

This is part of an extended management course. You can dip into it, or follow the course from the start. If you do that, you may want a course notebook, for the exercises and any notes you want to make.


I used to be a director in a business where, like many businesses, once a year we would have a ‘strategy meeting’ to look at our strategy for the next year. How could we understand the market and what could we do to improve our competitive position. In the next blog, we will look at some of the more sophisticated strategy planning tools available to you. Here, I want to focus on three that have the overwhelming merit of simplicity.

Every year we would follow the same process… until, that is, until I got heartily sick of it and introduced another. But let’s start with the two tools that made up that much used process, before I offer you a powerful alternative that is guaranteed to give you insights into how your business can make more money.

SWOT Analysis

Perhaps the best known strategic analysis tool is SWOT Analysis – a structured review of your organisation’s Strengths, Weaknesses, Opportunities and Threats – often presented as a grid like this:

SWOT Analysis

The secret to making SWOT Analysis work is frankness and a determination to be really objective about how your organisation measures up to the market. Being good at something is not a competitive strength if your competitors are also good at it – or even better.

The hardest part is to understand what is coming over the horizon by way of threats and opportunities. Because it is when you pair up the top of the chart with the bottom that you start to see what strategic changes you need to make. So, how do you spot opportunities and threats?

PESTLE Analysis

Of all the tools for horizon scanning, PESTLE analysis is the simplest. We just take stock of all of the changes we can foresee under a range of headings:

 

PESTLE Analysis

Waterfall Analysis

When you get bored with these, focus on revenue. Waterfall Analysis splits your entire market into your market share and the market share you leak to your competitors. It further subdivides these to give five components and hence five parts to your strategy. It will not give you the answers, but it will focus your thinking. People who have used this for a first time often find it leads to revelatory ‘aha moments’; so why not give it a try?

Click on the figure to enlarge it

Waterfall Analysis

Further Reading 

From the Management Pocketbooks series:

  1. The Strategy Pocketbook
  2. Business Planning Pocketbook

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Learning

The Management Pocketbooks Pocket Correspondence Course

This is part of an extended management course. You can dip into it, or follow the course from the start. If you do that, you may want a course notebook, for the exercises and any notes you want to make.


  • Why do you need to learn?
  • What do you need to learn?
  • How will you learn?
  • What will you do with the knowledge if you do learn?

These four excellent questions put us in mind of Bernice McCarthy’s 4MAT System for learning – a model that will help you answer the ‘How will you learn?’ question.  But let’s start at the beginning: Why?

The true answer to ‘why learn?’ will always be ‘because you can; because it is human nature to; and because learning is a joyous process.’  But I am guessing many readers will be more specifically career-focused.  You may be a new manager, perhaps hoping for a promotion, perhaps wanting a new role.

Exercise 1: Why Learn

Look at at the previous blog post, Career Development, and then ask yourself:  ‘What is my purpose in embarking on job-related learning?’  Write your answers in your notebook.

Exercise 2: What to Learn

To determine what you most need to learn, conduct a SWOT analysis.  Take a cold critical view of your personal strengths and weaknesses.  Then look at the opportunities ahead of you and the threats that may set you back.  Compare your strengths and weaknesses with the opportunities and threats and, from that, determine your learning priorities.

SWOT Analysis

Exercise 3: How to Learn

It seems likely that we all have our preferred learning styles: reading and analysis, experimentation and playing, reflecting on experiences.  Think about a time when you learned most easily and comfortably.  What were you doing then?  This is possibly a good starting point for designing a learning process that will work for you.

Further Reading

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