These days, companies should quickly adapt to changing market conditions to succeed in a dynamic environment. Organizations are demanded to outperform their competitors in quality, speed of service, wide range of products, and price. A balanced scorecard is a strategic management model based on measuring and evaluating a company’s effectiveness (Quesado, Guzmán, and Rodrigues, 2018). The latter is assessed regarding a set of optimally selected indicators that reflect all aspects of an organization’s activities, both financial and non-financial (Quesado, Guzmán and Rodrigues, 2018). It suggests the balance between short-term and long-term goals and external and internal factors of the company’s activity.
Regarding current trends, one of them is automation; however, the full-fledged application of the methodology requires significant resources. The development of a balanced scorecard model can take more than two months; consequently, it requires profound quality control of the results (Frederico et al., 2020). Even though the implementation is challenging, it would help businesses exploit Industry 4.0, which is the automation trend in manufacturing technologies. For instance, according to Frederico et al. (2020), supply chain performance can be measured through a balanced scorecard model. Therefore, this model is beneficial in terms of automation, linked to the Industry 4.0 phenomenon.
PESTLE analysis is a tool for determining the company’s long-term strategy. Concerning the positioning of the business, PESTLE analysis is used in the development and revision of strategy for the existing market (Perera, 2017). For instance, it is crucial to explore the external environment when launching a new product or service (Perera, 2017). It is necessary to assess the potential impact of such circumstances on the company’s performance from two perspectives: how they influence the market and the company’s operations. If a company sells its products in different geographic areas and operates in various industries, it is recommended to conduct a PESTLE analysis for each market. Regarding current trends, sustainability has become an influential aspect. For instance, according to Islam and Mamun (2017), the company can use the PESTLE model to assess the profitability of green initiatives. As environmentally-friendly products are advantageous for the company’s reputation, this mode is helpful to attract investors and stakeholders.
Porter’s five forces model refers to examining the company’s external environment and, in turn, provides material for conducting a SWOT analysis. Referring to the company’s positioning, it is crucial to determine direct competitors and analyze how competitors position their brands (Musonera and Cagle, 2019). Musonera and Cagle (2019) used Porter’s Five Forces model for conducting market analysis, suggesting profitable strategies. Competition is a significant threat to business, affecting newly created startups and large corporations. Hence, it is recommended to know other businesses’ actions within the market that can affect the company’s performance. Therefore, this model can be beneficial due to identifying a value-based positioning idea. Even though the model might be considered outdated, it addresses Porter’s framework and provides opportunities for mergers, alliances, and negotiating large contracts (Bruijl, 2018). Moreover, the model helps corporate management make rational decisions. In some cases, it can serve as the final point for the business closure to avoid bankruptcy and debts in the future.
Reference List
Bruijl, G. H. T. (2018). The relevance of Porter’s five forces in today’s innovative and changing business environment. Web.
Frederico, G. F. et al. (2020) ‘Performance measurement for supply chains in the Industry 4.0 era: A balanced scorecard approach. International Journal of Productivity and Performance Management, 70(4), pp. 789-807.
Islam, F. R. and Mamun, K. A. (2017) ‘Possibilities and challenges of implementing renewable energy in the light of PESTLE & SWOT analyses for Island countries’, In Rabiul, F.M., Mamun, K. A, and Amanullah, M. T.O. (eds.) Smart energy grid design for Island countries Cham: Springer, pp. 1-19.
Musonera, E. and Cagle, C. (2019) ‘Electric car brand positioning in the automotive industry: Recommendations for sustainable and innovative marketing strategies. Journal of Strategic Innovation & Sustainability, 14(1), pp. 120-133.
Perera, R. (2017). The PESTLE Analysis. Puwakpitiy: Nerdynaut.
Quesado, P., Guzmán, B. A., and Rodrigues, L. L. (2018) ‘Advantages and contributions in the balanced scorecard implementation’, Intangible Capital, 14(1), pp. 186-201.