PoliticalHi everyone!
My name is Maria and I am a Product Lead at TCLA and future trainee. ☺️
With assessment centre season well underway and many of you wanting to start preparing for your training contract applications, @NatashaS98 , @Orla , @Erin and I have been thinking of ways to provide you with opportunities to practice your commercial awareness.
I wanted to start by giving you an opportunity to conduct a PESTLE & SWOT analysis. This is commonly used in group exercises or individual assessment centre activities, mainly because it allows recruiters to see your ability to think commercially and consider current news stories that may impact clients (both positively and negatively!). You can find a quick summary of what each acronym stands for in the PDF below.
Here is a scenario that you could be given in a law firm assessment centre:
You are an entrepreneur seeking to start your own independent coffee shop in London. Using PESTLE and SWOT, what are some factors that you would consider when building your business plan?
Make sure to share your ideas on this thread, and we’ll be sending everyone who participates an email with a summary of our team’s answer to this question by next Wednesday, the 8th of February.
------
Quick note:
Don’t worry if you find this hard, this is normal! There is also no such thing as a “perfect” answer here. The most important thing is to give this practice exercise a try!
Also, there is no need to use both PESTLE and SWOT or to consider every single factor of each - feel free to refer to as many points as you want! In fact, as you can see, both Strengths and Weaknesses refer to an internal assessment of the business, while Opportunities and Threats relate to external factors. Because we’ve given you little information about the business, it is normal if you can’t think of many strengths and weaknesses, so don’t worry about that!
Looking forward to seeing everyone’s thoughts! 🌟
- Depending on where the beans and other materials are sourced, so will need to consider whether we have a trade agreement post-Brexit and the impact if we do/don't, and whether there are any trade restrictions in place.
- Gvmt announced corporate tax raise would go ahead so will need to factor that into the costs of business.
- Labour laws are strong and require high standards so may need to consider automation to reduce costs.
Economic
- Supply chain issues after covid and due to China's covid policy so will need to consider bulk buying and whether and factor in the costs of storage.
- High inflation and high interest rates mean that loans to buy premises/materials will be extremely expensive. May need a different source of investment.
- However, commercial real estate is struggling recently so rent may be cheaper.
- Who are competitors and how are competitors doing now? Starbucks has reported record revenue despite rising costs.
Social
- January health kick and savings trend may mean that this is a bad time to open a shop. Moreover, agile working means less customers in central London. Consider a mobile business.
- People more likely to shop smaller local business following covid.
Technological
- Automation can help reduce costs and spending on employees e.g. coffee vending machine.
- Could consider buy now pay later financing.
Legal
- Ensure branding etc does not breach any IP.
- How are employees to be employed? As workers, employees or ICs. Unlikely to be the latter, but consider how contracts need to be drafted and the protections required for each kind.
Environmental
- Ensure packaging and materials are environmentally friendly. Danone is being sued over plastic pollution and Shell lost a case for not doing enough to stay in line with net zero goals.
Strengths: The city is full of people needing coffee and during a time when costs are very high coffee may be a 'treat' a lot of people can afford when they cut out more expensive ones. People often prefer (at least in theory) the idea of independent coffee shops.
Weaknesses: Unlikely to have much funding so will need to rely on debt. No clear USP.
Opportunities: Could do a subscription service as Pret's seem to be going well, or a mobile service.
Threats: Highest rate of insolvencies since 2009 particularly due to inflation and supply chain issues so the market isn't in the best shape for a new business. Also investors do not seem to have much appetite for risky businesses atm.