Business Analysis

Palepu et al (2010) states the purpose of a business analysis is to identify the key profit drivers and the risks associated to the business, by conducting an assessment of the company’s potential profits at a qualitative level. Law (2014) similarly suggests that business analysis is “a means by which the current performance of a firm is evaluated as part of the strategic planning process”. Therefore, business analysis involves assessing a company’s external environment. Using a PESTAL analysis to assess what can affect the organisation at a macro level, which can influence the future performance of the company. While also conducting an internal analysis that can be achieved via a SWOT analysis, which identifies micro factors affecting the current performance of the company and how it correlates to market share, within the service industry (Law, 2014).

Conducting business analysis is a vital component of any company,to plan and predict any changes within the business environment that could affect the organisation financially or operationally. For example, changes within the macro environment regarding political agenda can influence sport organisations but also the wider business community, such as issues surrounding minimum wage (BBC, 2014). Due to increases within living costs and the minimum wage failing to rise with this correlation, political parties are basing future election campaigns upon this current issue to win votes. However, this change within the macro factor that is increasingly likely to occur due public popularity. Can have massive implications towards business owners, because of the increase within expenditure for wages and the taxation associated with having a work force such as, PAYEE and pensions. Leading to organisations having to cut jobs that will affect the company operationally due to a drop in efficiency, which could potentially lead to bankruptcy.

By conducting a STEEPLE analysis that identifies both the micro and macro factors affecting the future organisation. Can have massive implications towards operations and financial decisions that contribute towards the potential performance. Therefore, it is important to be aware of the influences surrounding the organisation, in order to make a more informed decision that could lead to organisational success.               

	Strengths	Weakness	Opportunity	Threat
Political	Aspiring more people through Olympic legacy.	Change in government	Linking in with government policy of increasing more volunteers	Minimum wage increased
Economical	Sponsorship, opportunities	Increased living costs, affordability for the average individual	Increase the sports awareness	Colliding with other international events, such as Wimbledon.
Social	Increasing participation, improving health	Equipment to get started is expensive	To use and promote a volunteer system	Niche market
Technology	Use of video technology, to broadcast via YouTube	Potentially lose control of marketing	Using social media to talk directly to target audience	The actions of the athletes could damage brand
Ethics	Values, ideologies	Risks associated with extreme sports	To be taught more frequently with mainstream schools	Increase dependence upon government\education system
Legal	Rights and association to sell	Permission needed to use venues	To increase number of locations available (e.g. a tour)	Events can be contested by local residents

References

BBC. (2014) BBC website. Available at: http://www.bbc.co.uk/news/uk-politics-29299230 (Accessed 10th December 2014.

Law, J. (2009) A Dictionary of Business and Management. 5^th edn. Oxford University Press.

Palepu, K. Healy, P and Peek, E. (2010) Business analysis and valuation. 2^nd edn. Andover : South-Western Cengage Learning.