PEST ANALYSIS

Analysis to Analyse the Various Strategic Issues Currently Acting Upon Aviva Plc Inc.

Analysis to Analyse the Various Strategic Issues Currently Acting Upon Aviva Plc

Theoretical Background

Organizational diagnosis is concerned with identifying what is that needs to be changed.

PEST analysis

“PEST analysis can be used to examine the organization's environment and search for evidence of change that might signal a problem or opportunity. Pest refers to political? economic? socio-cultural and technical factors. Political Factors:-Include new legislation in area such as environment management? consumer protection and employment; regulation of markets in area such as telecommunications and broadcasting? fiscal policies and so on (www.aviva.com). Economics Factors:-Economics Factors include issues such as exchange rates? cost of borrowings? change in levels of disposable income? cost of raw materials? security of suppliers? new competitors and the trade cycle. Socio-cultural Factors:-Socio-cultural Factors include demographic trends such as a fall in the birth rate or an ageing population. They also include shifting attitudes towards education? training? work and leisure? which can have knock- on effects on the availability of trained labour? consumption patterns and so on. Cultural factors can also affect business ethics and the way business is done in different parts of the world. Technical Factors:-Technical Factors include issues such as the levels of investment that competitors a remaking in research and development and the outcome of this investment; the availability of new materials? products? production processes? means of distribution and so on; the rate of obsolescence and the need to reinvest in plant and people (www.aviva.com).

SWOT analysis

SWOT analysis offers a more comprehensive approach to diagnosing organization-environment fit. In addition to assessing the opportunities and treats that a PEST analysis might reveal? it also includes an assessment of the organization's strengths and weaknesses and its capability of responding to the threats and opportunities that confront it (http://findarticles.com).

This remarkable piece of history as to the origins of SWOT analysis was provided by Albert S Humphrey? one of the founding fathers of what we know today as SWOT analysis SWOT analysis came from the research conducted at Stanford Research Institute from 1960-1970. The background to SWOT stemmed from the need to find out why corporate planning failed. The research was funded by the fortune 500 companies to find out what could be done about this failure. The Research Team were Marion Dosher? Dr Otis Benepe? Albert Humphrey? Robert Stewart? Birger Lie.A scan of the internal and external environment is an important par of the strategic planning process. Environmental factors internal to the firm usually can be classified as S strength (S)? or Weakness (W) and those external to the firm can be classified as O opportunities (O) or Threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis (www.aviva.com).

The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such? it is instrumental in strategy formulation and selection. The following diagram shows how a SWOT analysis fits in to ...