Pest Analysis Of Al-Kharafi Construction Industry

This article has started revolutionary thinking about what are the different forces in addition to direct competitors that affect competitive strategy of an organization and how better understanding of industry structure and these forces, also known as " Porter 's Five Forces", derive organization 's strategy to achieve sustainability and higher profitability. Author has explained the other factors that contribute for industry structure like industry growth rate, technology and innovation, external factors, government & regulations and complementary products and services. Industry structure changes while responding to changes in competitive forces. Author also discussed the framework to perform industry analysis and avoid common pitfall while conducting analysis. In this review I will summarize five competitive forces explained by Micheal E. Porter and their implication on organization 's strategy. Further, I will discuss the relevancy of Porter 's five forces framework in current scenario.

The main purpose of this paper is through the company 's external and internal environment analysis to evaluate the company in the industry and future developments. Assess the external environment mainly through PESTLE Analysis and Porter 's 5 Forces. Strategic Recourses & Capability Analysis for internal environmental assessment is conducted. Finally, the company somehow SWOT analysis, concluded ••••

PESTEL analysis is widely used to better understand the external environment of the company. The acronym PESTEL stands for political, economic, sociocultural, technological, environmental, and legal factors. PESTEL analysis helps managers better understand the threats and opportunities a company faces.

The competition has been analyzed by using Porter’s Five Forces Model. By gathering an analysis of the threats that can come from competitive rivalry, potential new entrants, bargaining power of buyers, bargaining power of suppliers, and substitutes, Company G can be better compared to its competitors.

Pestel analysis consists of environmental factors that lead to the understanding weaknesses and strengths of the organization in an attempt to influence the organization’s success. The macro-environmental factors are political, economic, social, technological, environment and legal.

Macro environment is crucial to the development of a company. All the external factors can have huge positive or negative influences on Travis Perkins plc, therefore a better understanding of the environment of the company is of supreme significance (Peng & Nunes, 2007). Among all the analysis tools, PEST analysis is one of the most effective tools to analyze the external environment of a company (Riley, 2012). This part will demonstrate PESTLE analysis of Travis Perkins plc below. The result of PESTLE analysis can be demonstrated in the following table 1.

As we begin to strategically plan for our business, it is important for us to take a deep dive into our competitive environment to understand where we are strong competitively and where we are weak competitively. An analysis of the forces driving industry competition using M.E. Porter’s Five Forces Model will assist us in determining where the power lies in a business situation as we begin to plan. We must understand how they work in our industry and how they affect our particular situation. Whatever the collective strength of these forces is, our job as the strategists of the organization is to

The PESTLE analysis can be used to assess the strategic relevance of the six principal components of the macro-environmental: political, economic, social, technological, environmental, and legal forces. It can be used as a tool by companies to better understand of the macro- environment they are operating in.

Porter’s Five-Forces Model of Industry Competition is the most widely utilized tool to evaluate the competitive environment (Dess, Lumpkin, Eisner, & McNamara, 2014). Dess, Lumpkin, Eisner & McNamara (2014) define Porter’s model

PESTEL analysis helps to infer whether a particular factor is helping the organization to achieve its goals or is affecting in its road to success.

External analysis of general environment will be done using PESTEL which refers to how the political, economic, social, technological, environmental and legal environment affects an organization. Below will be a diagram of PESTEL, followed by a brief explanation of each factor and their examples.

Porter's Five Forces can be applied to particular companies, market segments and industries with the step-by-step analysis of market structure and competitive situation. First of all, when implementing this module in organizations, it is necessary to determine the scope of the market to be analyzed. Following, all relevant forces for this market analyzed and key forces are identified (Gerry and Kevan, P.117). Actually some organizational strategy and the longer-term goals are mainly based on or consistent with the key forces. Hence, it is not necessary to analyze all elements of all competitive forces with the same depth. Moreover, the key forces in the competitive environment will vary in different industry. Different forces take on prominence in shaping competition in each industry (Porter,

PESTEL analysis is a method used to study macroeconomics - the macroeconomic environment of an enterprise. Otherwise, it is called the general segmentation of the environment. It defines the basic spheres of the environment, which are areas that have a crucial impact on the functioning of the organization. Also marks the future strategy of the organization through an in-depth analysis.

This article summarizes the key ideas and gives an overview of how this concepts works. Describes, how this five competitive forces shape every organization and every market. Summarizes how these forces will define the power of profitability, competitiveness, and attractiveness of the industry. Depending on the facts which is derived from the five forces analysis, the management of organizations will decide how to effect or abuse specific features of their industries.

The latter includes (4) bargaining power of suppliers; and (5) bargaining power of buyers. ‘The strength of each of these competitive forces is determined by a number of key structural variables’ (Grant, 1998 in Mazucatto, 2002). The importance of this framework is emphasised by Porter who argues that ‘Understanding the forces that shape industry competition is the starting point for developing strategy. Every company should already know what the average profitability of its industry is and how that has been changing over time” (Porter, 2012, p.235). In the context of the building materials industry, the application of Five Force analysis indicates that the industry has growth rates that are mostly lower than the GDP growth across regional economies. It is cyclical in nature and fragmented in structure with a large number of small and mid-sized firms that create micro-markets and heterogeneous customer needs in different geographies. This becomes a big deterrent for any member firm that intends to exploit and enjoy economies of scale beyond a limit. What’s more, commoditization and lack of differentiation erode any scope for healthy margins. High weight to value ratio of ‘heavyside’ building products renders global sourcing ineffective. Entry barriers are virtually non-existent owing to the standardised, low technology nature of products that are devoid of patents and produced with non-proprietary technologies, and this particular industry attribute strips