Some exam questions I need explained Essay Example | Topics and Well Written Essays - 750 words - 1

Some exam questions I need explained - Essay Example PEST (Political, Economical, Socio-cultural, Technological factors) analysis is an important strategic planning tool. It proves to be a useful stepping stone for the analysis of external factors for an organization. It is also useful to analyze the feasibility of a certain project with reference to different external factors that might affect its execution. This model covers a broader aspect of the prevailing environmental factors than SWOT analysis. Porter’s 5 Forces: This model was developed by Michael E. Porter in 1980. He formulated the model on the basis of 5 competitive forces that tend to determine the nature of every industry. Organization can evaluate the level of competition, profitability and acceptance rate of an industry with the help of these forces; threat of new competitors, bargaining power of the suppliers, rate of rivalry in the industry, bargaining power of customers, threat of substitutes. Value Chain Analysis: It is considered to be a systematic approach; involves a sequence of functions and actions that build value for the organization. Value chain analysis plays a major role in the development of competitive advantage in the market. It equals to the cumulative value that is provided by the organization. Experience Curve Effect: This concept was formulated in 1966 by Bruce Henderson. Experience is considered to be an asset for any organization. The concept promotes the increment of this asset in different forms in the organization, for example, hiring of experienced resources, collaboration with other companies etc. According to the experience curve effect; if a company gains greater experience in a specific field or production process then 25 to 30 % of the costs can be decreased. It can help the organization to evaluate the success rate of the company and increase revenues. BCG (Boston Consulting Group) Matrix: is a portfolio management model. It categorizes the products of the organization