As you are aware, the major thing in ISO 9001:2015 is “Risk Based Thinking” where you have to consider risks and opportunities related to your organization with regard to every aspects like socio, economic, political, technological, etc. This would be not only in macro scale but for micro scale at production lines.
For do this, there are many types of tools available.
The following methods can be used for determining the inputs for identification of risks and opportunities to the company. There can be many, but these would be the more frequently used ones.
- SWOT Analysis
- PESTEL Analysis
- Porter’s Five Forces
- Views of Senior Managers
- Views of Consultants
- Benchmarking findings
Let’s discuss more on the above methods in little more details.
SWOT Analysis
SWOT analysis (alternatively SWOT matrix) is an acronym for strengths, weaknesses, opportunities, and threats and is a structured planning method that evaluates those four elements of a project or business venture. A SWOT analysis can be carried out for a company, product, place, industry, or person. (https://en.wikipedia.org/wiki/SWOT_analysis)
The well known and the most easiest risks and opportunity assessing method. You should know the meaning of the 4 letters which gives its name.
- Strengths
- Weaknesses
- Opportunities
- Threats
Weaknesses and threats are the risks for the organization while opportunities and strengths are the positive things for the organization.
By knowing these things, the organization can act on improving and taking advantage of their strengths, giving solutions to overcome their weaknesses, Keep the power of their opportunities and get maximum out of those and answer the threats identified and find answers to overcome those.
Porter’s Five Forces
Porter’s five forces analysis is a framework that attempts to analyze the level of competition within an industry and business strategy development. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of an Industry. (https://en.wikipedia.org/wiki/Porter’s_five_forces_analysis)
The types of risks can be identified on five categories as per Porter’s Five Forces.
- Bargaining power of Buyers
- This goes with the customers’ perception on the product or service offered by you. If the customer is not satisfied, they will go to another.
- Bargaining power of Suppliers
- If you do not have several suppliers for one service, raw material you purchase for you, you are at risk. Always try to keep 2 or more suppliers to one service, product, machine you purchase.
- Threats from new entrants
- There can be new competitors or competing products / services in the market. It can be the same product or service provider of a separate kind of product/service. You should consider all those as risks.
- Threats from substitutes
- These are your current competitors. They can be a bigger threat than new entrants as they already have their market share and all required infrastructure. Also other replacement products.
- Internal rivalries
- Other industries marketing their products as a replacement for your product can be a major threat to your organization.
PESTEL Analysis
As the name denotes,
PESTEL stands for:
- P – Political
- E – Economic
- S – Social
- T – Technological
- E – Environmental
- L – Legal
A PESTEL analysis is a framework or tool used by marketers to analyse and monitor the macro-environmental (external marketing environment) factors that have an impact on an organisation. The result of which is used to identify threats and weaknesses which is used in a SWOT analysis. (http://www.professionalacademy.com/blogs-and-advice/marketing-theories—pestel-analysis)
In the SWOT analysis, it does not talk about the macro levels beyond the company’s scope. But in PESTEL, the risks and opportinities are to be identified using macro level statistics related to Political, economical, social, technological, environmental and legal areas.
Views of Senior Managers
Senior Managers / Directors are the decision makers of an organization. They will decide what to do, how to do, when to do and who will do it.
They know the market situation, global economical issues, what is happening in the outside world, etc.
Views of Consultants
Consultants are experts in their subject and they may know more on any specific subject than you. Therefore, they can give more practical solutions for your issues and they may identify any risks and opportunities you have. Also they can educate you more on a subject which ultimately improve your strengths.
Benchmarking findings
Benchmarking would be a very easy methods to identify your selves over others. You can refer / visit a better performing company and investigate on how they perform better than you. You can see what are their strengths and the opportunities which they are taking.
You can learn and understand how they cope with the risks and threats they are facing.
