SWOT Analysis means knowing the company’s strengths (S) or weaknesses (W), and those external factors affecting the firm such as opportunities (O) or threats (T). STEEPLE analysis stands for Socio-cultural, Technological, Economic, Environmental, Political, Legal and E-business. And finally, PLC models of change are about Product Life Cycles.
SWOT Analysis Defined
SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is important in coming up with strategies as businesses are planned. For instance, knowing the threats to business such as competition beforehand could enable the business to handle competition well. This could be done by promoting the product’s strengths and downplaying its weaknesses. The SWOT analysis enables the firm to match resources and capabilities with the competition.
STEEPLE Analysis
STEEPLE (Social, Technological, Environmental, Economic, Political, Legal and Ethical) analysis enables the business to anticipate future trends. This enables the business to determine, more or less, the factors that will influence it in the coming years.
Socio-cultural factors could include population demographics, income distribution, lifestyle changes, the levels of education. Technological factors are research, new technologies/developments, transfer of technology mechanisms. Environment such as environmental protection laws, the Local Authority environmental policies. Economic such as business cycles, GNP trends, interest rates, inflation, unemployment, disposable income.
Political factors such as the stability of the government, foreign trade regulations, taxation policy. Legal factors such as monopolies legislation, employment laws, and discrimination laws. Ethical considerations pertain to ethical and moral standards governing the policies and practices of thebusiness. STEEPLE analysis determines the key issues affecting the company and how these issues will affect business strategies.
Product Life Cycle (PLC) Analysis
PLC (Product Life Cycle) pertains to the life of the product in the market. Every product has a "life cycle" which is similar to a living organism; the product will grow, become mature and decline. The stages of product's development, called Product Life Cycle, are made up of five: Product Development, Introduction, Growth, Maturity and Decline.
1. Product Development – the company spent a huge amount of development and research cost for the product in the development stage.
2. Introduction Stage – As the name implies, the product in this stage is new and just beginning to enter the market.
3. Growth Stage – The growth stage is when the company starts to generate and gain momentum in sales.
4. Maturity Stage – The product is now on its way to the maturity phase. Having gained a large, loyal following, it is at a phase when it does not need much promotion in order to generate sales.
5. Decline Stage – Because of the increase of new competitors entering the market, the competition is much keener than before. The product's market share dropped down.
Product has a limited life, it goes through a lot of stages which provide a lot of challenges and opportunities to the business. A product life cycle enables the business to determine the growth potentials of a product. At some point it may go out of market or die. It could also reach stability or continuity depending on the demand for the product.
PLC is a useful model for managers in order not to be complacent about their marketing and management strategies and to keep the product continuously evolving to cater to the evolving tastes of the consumers.
These three strategic models and frameworks provide management with the tools to strengthen the business' position in the market.
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