Different business analysis models and their pros and cons

Shot of a mature businessman having a discussion with a colleague in an office

Struggling to figure out the best way to achieve your business goals? We’ve weighed up the good and bad of some of the most popular business analysis models below to help you out.

With data being at the forefront of so many business decisions, it’s no longer enough to simply go with your gut. In a digital-forward age, there are all manner of options that businesses can take advantage of when it comes to improving their operations. With that said, the sheer number of options available right now can certainly make choosing how to act a little difficult.

Business analysis seeks to reduce this option paralysis by using structured techniques to identify businesses needs, expose flaws and wade through vast swathes of data to uncover a solution that’s right for your business – regardless of sector.

Below, we’ll take a look at business analysis in more detail, and present some of the most commonly used techniques – along with their pros and cons – to help your business form the plans, strategies and solutions it needs to achieve its goals with greater certainty in the future.

What is business analysis?

Business analysis is a discipline that combines techniques, tasks, and knowledge as a way of identifying business needs. Once these needs have been identified, business analysis then seeks to propose changes and create solutions in ways that provide stakeholder value.

Through the use of business analysis models and techniques, employees and stakeholders can better understand their organisation’s structure, policies and operations in greater detail, which allows them to improve processes, create new ones, and more readily involve themselves in strategy planning.

Rear view photographed through window of diverse male and female executive team video conferencing with CEO in office board room.

Four of the most popular business analysis techniques

SWOT Analysis

One of the most popular business analysis techniques out there, SWOT analysis involves identifying the strengths and weaknesses of your business (i.e., internal factors) along with external factors that you may view as opportunities or threats. This straightforward method allows you to make evaluations on the business itself, where it’s positioned within the market, as well as any new projects, campaigns, and initiatives you plan on carrying out.

The four elements of SWOT analysis can be broken down as follows:

Strengths: The parts of the business or project that give you an edge over your competitors

Weaknesses: The parts of the business that create problems or issues within the business or project, particularly when compared to your competition

Opportunities: External elements, facts and figures that could be used to the business’ advantage

Threats: External elements that could disrupt or hinder the business or project in some way.

Cropped shot of a group of businesspeople having a boardroom meeting in an office

What are the pros of SWOT Analysis?

– Highly cost-effective

– Easily applied to a wide range of contexts

– Provides a visual overview since each element is arranged into four quadrants

– Fosters collaboration and discussion

What are the cons of SWOT Analysis?

– Can result in oversimplification of high-level issues

– Works on generalities rather than specificities, which can lead to vagueness and ambiguity

– Lacks objectivity

– The analysis can be easily affected by something that wasn’t possible to predict

PESTLE Analysis

Sometimes called PEST analysis, the PESTLE model identifies environmental factors that can influence a business, as well as how to best address these factors when making business decisions. These influences are as follows:

Political: Financial support and subsidies, government initiatives and policies

Economic: Labour and energy costs, inflation, and interest rates

Sociological: Education, society, culture, media, and population

Technological: Incoming communication, IT, and other innovative tech

Legal: Local and national government regulations and employment standards

Environmental: Waste, recycling, pollution, and weather

When a business analyses these factors, it can more thoroughly understand how these outside factors can create opportunities or threats to its operations. This information then makes it easier to develop strategies to address the potential opportunity or threat.

Shot of a group of smiling coworkers having a meeting in an office

What are the pros of PESTLE Analysis?

– Time and effort are the only costs involved

– Involves cross-functional skills and expertise

– Creates a simple, straightforward mechanism with which to identify new opportunities

– Encourages more strategic thinking

What are the cons of PESTLE Analysis?

– The rapidly changing pace of outside factors mean it must be conducted regularly

– Can lead to oversimplification of information

– Must be combined with internal factors in order to be most effective

– Can lead to further option paralysis

MOST Analysis

For businesses in need of more in-depth internal analysis, MOST analysis frequently proves to be a popular method. MOST analysis investigates a business’ overall mission, the goals they’ll need to obtain to achieve this mission, and the methods they’ll use to get there. More succinctly, it can be broken down as follows:

Mission: The business’ purpose

Objectives: The key goals to help achieve this mission

Strategies: The options available to achieve the objectives

Tactics: The methods the business will use to put its strategies into action

What are the pros of MOST Analysis?

– Simple and straightforward

– Helpful when communicating strategy

– Easily understood by multiple teams

– Makes misalignment easy to understand

Young smiling black businesswoman at the wall with stickers communicating with her colleagues. Mixed team of entrepreneurs

What are the cons of MOST Analysis?

– Lack of formal scoring method when used to compare and decide on suitable strategies

– Most effective when used with other tools

Business Process Modelling

Still in the analysis phase of a project? Business Process Modelling (BPM) can be used to understand and analyse the gaps between current business processes and any future processes the business has its sights set on.

The technique involves four tasks:

– Strategic planning

– Business model analysis

– Defining and designing the process

– Technical analysis for complex solutions

Through BPM software, the model creates a visual/graphical representation of a business’ moving parts, with symbols representing duties, conditions, relationships, and events that make up the workflows of business processes.

What are the pros of BPM?

– Provides a more transparent view of how work activities are performed

– Improves business processes’ agility

– Standardises best practices

What are the cons of BPM?

– Models can often seem too complex

– Can lead to legacy processes that create a lack of innovation

Click here for the latest news and features from SEFE Marketing & Trading or visit our homepage to find out about our latest career opportunities.

The views, opinions and positions expressed within this article are those of our third-party content providers alone and do not represent those of SEFE Marketing & Trading. The accuracy, completeness and validity of any statements made within this article are not guaranteed. SEFE Marketing & Trading accepts no liability for any errors, omissions or representations.