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Business Report 1

Business Report

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Business Report 2

Executive Summary
The case study aims to show an understanding of the relevant theories, principles, models, and
tools used to analyze the current situations and operational problems in the organization. An 18-
month action plan has also been developed to show the organization problem-solving process.

Conclusion

To solve any organizational problem, an individual is required to analyze to find out what is
causing it. Hence, the firm can come up with an effective plan to control the reason of the
problem thus improving the company’s performance.

Recommendations

Suggestions to solve operational problems are:

 The firm should focus on the cause rather than symptoms of the problem.
 The firm should be in a position to turn off all the reasons to a problem.
 The company should audit each result of solving a problem.
 The firm should not over-adjust.
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Table of Contents
Executive Summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
Analyzing Current Situation.........................................................................................................................4
Models of Analyzing Current Situation........................................................................................................4
SWOT Analysis.............................................................................................................................................4
PESTLE Analysis...........................................................................................................................................6
Porter’s 5 Forces..........................................................................................................................................7
Four Corner’s Analysis.................................................................................................................................8
Value Chain Analysis....................................................................................................................................9
Key Operational Problems.........................................................................................................................10
Tools of Analyzing Problems......................................................................................................................10
Conclusion.................................................................................................................................................11
Recommendations.....................................................................................................................................11
Action Plan................................................................................................................................................12
References.................................................................................................................................................14
Business Report 4

Introduction
Analyzing Current Situation
Analyzing current situation entails the evaluation of the present and future strengths,
weaknesses, opportunities, and threats of the organization (Heizer, 2016). Conducting the
analysis involves the use of theories, tools, principles, and models in measuring out the current
conditions of the organization. Current situations in the firm may include globalization which is
the interaction among people and organizations. It is enhanced by reduced trade barriers,
improvement in IT, and transport (Kerzner, 2013). To remain competitive, firms must learn to
improve quality while at the same time lowering prices. Innovation is the primary key to success
to any organization. Secondly, sustainability which entails the ability of a firm to sustain current
practices while not putting future resources at risk (Katal, Wazid, & Goudar, 2013, August). The
three pillars that must be considered include social, economic and environmental factors. The
company should limit itself to the outcome of each pillar. Thirdly, there should also be effective
communication which involves understanding both oral, written and non-verbal communication
for the organization to be successful and achieve its goals. Fourthly, the firm should be able to
come up with a system design that is in a position to produce high-quality products and services
that meet the quality as well as the quantity demanded within a stipulated timeframe.

The current situation can be analyzed using various tools which include SWOT analysis,
PESTLE analysis, Porter’s five forces analysis, four corner’s analysis, value chain analysis, early
warning analysis, and wargaming.

Models of Analyzing Current Situation

SWOT Analysis
The SWOT analysis model is a broadly used tool that assists in understanding the
strengths, weaknesses, opportunities, and threats in the firm. After doing the SWOT analysis, the
company should access on how to major on its strengths, minimize its weaknesses, utilize its
opportunities and lower impacts of any threats (Goetsch, & Davis, 2014). The process begins by
identifying the objectives of the organization and determining both the interior and exterior
factors that are necessary for the firm to achieve its goal. The interior factors include the
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expertise and faults of the organization while the exterior factors include the opportunities and
threats that the organization faces.

An organization should be aware that opportunities can also be threats (Antony, 2012).
For example, new markets could be dominated by competitors, sabotaging the position of a firm.
Equivalently, threats can also be perceived as opportunities. For example, a new competitor who
grows swiftly opening new markets for the firm’s products and services would assist the business
to improve its performance.

The SWOT analysis tool provides a clear basis to examine the organization’s
performance and potentials. Additionally, it is also used when preparing to raise capital or bring
consultants for reviews. Once all the data is collected, it is entered into a simple table, a 2*2
matrix.

Strengths Weaknesses

 What does the organization do  What could be avoided?

better than others?  What could be improved?
 What does the firm do best  What do things add small or no
than other firms? worth to the organization?
 What do the organization’s  What does the firm’s client see
customers and competitors view as its as its weaknesses?
strengths?
 What makes the organization
competitive?

Threats Opportunities

 What barriers does the  Which are the best

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company face? opportunities that the firm can spot?

 What is it that the firm’s  Where is the unfulfilled
competitor is doing? demand in the market?
 Does the change in technology  What possible invention could
threaten the organization? the firm contribute to the market?
 Are the quality standards for
the company’s products changing?

When considering the company’s strengths, they should be related regarding the firm’s
competitors. For instance, if all the firm’s competitors manufacture products and services that are
of maximum standard, the high quality is not the strength of the organization but a necessity
(Krajewski, Ritzman, & Malhotra, 2013). The same case applies when looking at the strengths
and opportunities of the organization. Look at its strength and figure out if it gives the firm
access to new opportunities and alternatively, look at the weaknesses of the company and see if
there are chances of opening up new possibilities once the weak shortcomings are eliminated. To
conclude, the SWOT analysis also helps the organization understand their competitors, giving
the firm areas that need improvement and put it in a good competitive position.

PESTLE Analysis
In its expanded nature, PESTLE standards for Political, Economic, Social, Technological,
Legal, and Environmental. PESTLE is both a marketing principle, as well as a tool used by
organizations to ensure their performance (Ho, 2014). It gives the firm a wholesome view from
distinct angles which it needs to keep track. Critical questions are asked when using this model,
giving individual ideas on things that they should bear in mind. The questions include: What are
the current economic factors? What is the current political situation and does it affect the firm?
What effect does culture have on the market of the firm’s products? What change in technology
is likely to take place and how will it affect the organization? What are laws that regulate the
organization and is there a possibility of changing them? What are the concerns of the
organization on the environment?
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All the aspects above help the organization account for its goals and its strategies as well
as defining what the organization should do about them. This tool creates a better understanding
of the SWOT technique thus the organization should understand the deep meaning of PESTLE as
shown:

First, political factors show the extent to which the government may have an impact on
the performance of the firm (Wahyuni, 2012). The political factors may include; tax policies,
Fiscal policies, and trade tariffs. For instance, the government may apply new tax whereby the
entire revenue generating structure has or might be changed.

Secondly, economic factors such as the rise in inflation of an economy would be a key
determinant on how the firm sets prices for their products and services. Also, it affects the power
to purchase products by the consumer by changing the demand or supply patterns of the
economy. Other factors include interest rates affecting the rate of borrowing, economic growth
trends. The factors determine the performance of the economy which has a direct impact on the
fulfillment of the organization and results in long-term effects. Thirdly, the social factors try to
reflect on the social environment and measures determinants like population and cultural trends
that affect the purchase of the organization’s products.

Fourthly, technology alludes to change in technology that may broadly impact on

operations of the organization (Chan, Estève, Fourniols, Escriba, & Campo, 2012). It involves
the level of innovation and knows how that a firm owns. Fifth, the legal matters take into
account both the exterior and interior sides. Exterior laws affect the environment of the
organization while the internal laws the organization maintains them for themselves. They
include consumer laws, safety standards, and labor laws. The environmental factors include but
not limited to weather, climate changes, environmental offsets or even geographical location.

Porter’s 5 Forces
The model which was named after Michael E. Porter helps identify and analyze five
competitive forces that contribute to shaping the organization, determining the strengths and
weaknesses of the organization. The model helps define why various firms are capable of
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maintaining varying levels of profitability. The forces that Porter identified determine the
attractiveness and profitability of the firm. The effects include:

Competition in the industry has an advantage regarding the number of contestants and
their ability to threaten the organization. The more the competitors, associated with the quantity
of products and services that they make available, it dictates the superiority of the firm. Suppliers
normally lookout for a company’s competitiveness if they are unable to choose the best firm to
compete with.

The possibility of new entrants into the market that an organization is involved in reduces
its power. Its position is lowered even further if cost and time of a competitor to enter into a
market is less as compared to the powers of the company. New entrants are leading to erosion of
the profitability levels.

The number of supplier shows how easily a competitor can influence prices of products
and services by bringing them high. Price is affected by the aspects of the goods and services and
how unique is their quality affected by different suppliers. The fewer the suppliers, the more
power an organization holds.

The power of customer is associated with the capacity of the customers to bring prices
down. This is determined by the number of buyers a company has, how important are each client
and the cost incurred for a customer to opt for another company. Lastly, there is a threat of
substitute products that increase the chances of customers of an organization to switch to the
other alternatives in case the prices rise.

Four Corner’s Analysis

Four Corner’s analysis is a tool that is used to analyze opponents. It shows that the reason
for the study should be to give an idea about the future (Bonnans, & Shapiro, 2013). The model
helps determine the response of the competitor moves that other opponent might undertake,
competitor’s response to changes in technology and environment, and develop a profile of some
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of the changes that the competitor might take and to what extent would they be satisfied. When
carrying out SWOT analysis, motivation factors are ignored but are the ones that do encourage
the organization’s opponent.

The four components essential in analyzing the competitor are; Motivation- drivers
determine if the company’s competitors are satisfied with their performance at present. Hence
the firm can predict some of the changes they would make. The second component is a
motivation-management assumption that helps in identifying the assumptions that a competitor
has about the firm or other competitors, influencing their decision (Tomlinson, & Kiss, 2013).
Analyses of the assumptions would help the firm to determine their opponent’s blind spot. Also,
action-strategies of a firm decide how they will compete in the market. In instances that the
current approach yields good performance, we would expect that the opponent would continue to
compete in the same manner as before. Finally, action-capabilities of an organization will
determine their ability to answer to the external forces.

Value Chain Analysis

For an individual to make a good judgment, it is of wise to perceive how the processes in
the organization add value to its customers. That is why value analysis is necessary. The
investigation is based on the fact that firms exist to conceive quality for their clients (Mills,
2017). The process involves grouping values depending on the way they add value. Every
activity that adds value to the organization is considered a competitive advantage against the
competitors. The analysis involves three steps. The first step entails distinguishing between
primary and support activities involved. Activities involved in the creation of a product are
primary while those that support the main activities are called support activities. There is also
need to allocate costs to each activity to provide information to managers about capabilities of a
firm. Meanwhile, there is the step of identifying activities critical to customer satisfaction and
market issues. They involve the organization’s mission, the type of industry, and system value.

Key Operational Problems

Operational problems are grouped into three broad categories; the strategic problem is an
issue that requires a different approach, besides procurement, new business model or even new
Business Report 10

location of a firm. The problem needs its technical team with realistic timetables depending on
the magnitude (Kaisler, Armour, Espinosa, & Money, 2013, January). They require enough
resources, proper assessment before being executed. The projects involve many departments, but
meanwhile, they are defined by their importance.

Interdepartmental problems are tactical but are solved by allocating a project manager to
push the solution forward where it involves members of the department who need to be part of
the solution, while departmental problems are problems that require being solved within a
department of an organization.

Tools of Analyzing Problems

Fishbone diagrams also referred to as cause and effect analysis. The tool is used to
address a problem by dissecting it into four contributing sources approach (Olivares, & Lopes,
2012). The horizontal line indicates the main cause while the other horizontal lines coming out of
it indicate the causes which may have other sublines showing the possible causes. The four
contributing issues include machinery and equipment, people, materials, and methods. The four
sources allow the user to drill even deeper and identify the likely causes relating to that cause.
When the fishbone diagram is complete, with all possible causes recorded, the hypothesis is
tested to find out if they are valid causes. The process should then indicate some actual causes of
the identified problem.

Five whys problem-solving process involve defining the problem by asking yourself why
that is the case, or why is the problem the way it is. Once the cause has been identified for the
problem and put down in writing, you ask yourself again why that is the case. You repeat the
process five times until the primary cause has been identified. However, the technique is most
useful when solving simple problems.

Root cause analysis involves analyzing the effects and the symptoms of the process and
tracking the issues back to their leading causes of what initially led to the reason of the problem.
At first, data has to be collected to be able to understand what is taking place. Once the major
cause has been identified, it is tested to ascertain its validity.
Business Report 11

Pareto principle and Pareto charts give rise to the start of simple data analysis of a given
process, providing an early identification of a problem cause without much of analysis. The
principle states that 80% effects are as a result of only 20% of the causes.

Conclusion
In conclusion, when evaluating any current situation or when identifying the various
organizational problems, it is always wise to conduct an analysis using various tools to determine
the causes of the problems. This approach enables a company to come up with an effective plan
for lowering or eliminating the problem and eventually contributes to the success of any firm.

Recommendations
If an individual is not careful when solving operational problems, they might replicate
themselves. When an organization resolves the core issues, there is reduced wastage of resources
when dealing with issues, and create a sustainable improvement in the company. Hence, the team
involved in problem-solving should look deeply into the problems and find permanent solutions.

The firm should focus on the cause and not the symptoms of a problem. Symptoms of a
problem are more visible to business as compared to the main reasons. In case of a problem, the
firm has the mandate of conducting a detailed investigation and find out what is causing the
problem to take place. For example, if there is a delay in delivery, the firm should look deeper
and find out what is causing the delay.

The firm should turn-off all the key causes to a problem. If the company solves only one
cause to a problem that has many causes, the problem re-occurs again, taking a new form hence
considered a new problem which is not the case. Thus, when the organization finds out the
causes to a problem, they should be in a position to identify all of them and come up with an
effect to turn off each of them, preventing the problem from establishing itself again.

The firm should not mistake control for resolution. When the company detects a problem,
it should be monitored. The company should create awareness so that the affected employees can
Business Report 12

work together and find a short-term plan to make sure that the problem does not spread till a
permanent solution is found (Abramov, 2015, September). However, the short action may remain
in place for a while as the firm looks into other emerging issues. The organization should avoid
this and use resolution tools to curb the whole problem and avoid putting the containment actions
to remain in place for long.

The company should audit each result of solving a problem. Once the firm has solved a
problem, it should conduct cross-check up measures to ensure that the problem has been fully
solved. The company should exercise honesty when performing the process.

The firm should not over-adjust. When the problem reappears, the organization may take
action of changing the activities to solve the problem. The company should keep in mind that as
the problem is being solved, other problems might emerge. It is wise to identify the problem that
occurred due to failed containment or due to the process being faulty, before thinking of any
adjustments.

Action Plan
Below is a table listing steps to be taken to achieve the goals. It clarifies the resources
necessary to attain a goal and formulates a timeline when major tasks need to be completed.

Time Objective Action

1-3 months To find out the researching within the

operational problems within organization.
the organization.

4-7 months To find out all the Conducting an

Business Report 13

causes of the operational analysis of the operational

problems. problems.

8-9 months To make sure that all Analyzing the

the causes have been operational problem.
identified.

10-11 months To find out the best Coming up with

solution to the problem. measures that address the
problem.

12-15 months To solve or lower Implementing the

impacts of the problem. identified measures.

16-17 months To find out if the Conducting an audit

measures are effective of each result of solving the
enough. problem.

18-19 months. To find out if the Evaluating the firm’s

problem reoccurs. performance.

References
Abramov, O. Y. (2015, September). TRIZ-Based Cause and Effect Chains Analysis vs Root
Cause Analysis. In Proceedings of TRIZFest-2015 Conference, Seoul, South Korea (pp.
283-291).

Antony, J. (2012). A SWOT analysis on Six Sigma: some perspectives from leading academics
and practitioners. International Journal of Productivity and Performance
Management, 61(6), 691-698.
Business Report 14

Bonnans, J. F., & Shapiro, A. (2013). Perturbation analysis of optimization problems. Springer

Science & Business Media.

Chan, M., Estève, D., Fourniols, J. Y., Escriba, C., & Campo, E. (2012). Smart wearable
systems: Current status and future challenges. Artificial intelligence in medicine, 56(3),
137-156.

Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence. Upper
Saddle River, NJ: pearson.

Heizer, J. (2016). Operations Management, 11/e. Pearson Education India.

Ho, J. K. K. (2014). Formulation of a systemic PEST analysis for strategic analysis. European

academic research, 2(5), 6478-6492.

Kaisler, S., Armour, F., Espinosa, J. A., & Money, W. (2013, January). Big data: Issues and
challenges moving forward. In System Sciences (HICSS), 2013 46th Hawaii International
Conference on (pp. 995-1004). IEEE.

Katal, A., Wazid, M., & Goudar, R. H. (2013, August). Big data: issues, challenges, tools and
good practices. In Contemporary Computing (IC3), 2013 Sixth International Conference
on (pp. 404-409). IEEE.

Kerzner, H. (2013). Project management: a systems approach to planning, scheduling, and

controlling. John Wiley & Sons.

Krajewski, L. J., Ritzman, L. P., & Malhotra, M. K. (2013). Operations management: processes

and supply chains (Vol. 1). New York, NY: Pearson.

Mills, A. J. (2017). Studying the Gendering of Organizational Culture over Time: Concerns,
Issues, and Strategies☆. In Insights and Research on the Study of Gender and
Intersectionality in International Airline Cultures (pp. 71-91). Emerald Publishing
Limited.

Olivares, I. R. B., & Lopes, F. A. (2012). Essential steps to providing reliable results using the
analytical quality assurance cycle. TrAC Trends in Analytical Chemistry, 35, 109-121.
Business Report 15

Tomlinson, R., & Kiss, I. (Eds.). (2013). Rethinking the process of operational research &
systems analysis. Elsevier.

Wahyuni, D. (2012). The research design maze: Understanding paradigms, cases, methods and
methodologies.