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Palisade plc is a large listed group operating in diverse sectors. It is considering buying 50% of a company, Jengo Ltd, which has been operating as a ladies’ fashion retailer for five years. Jengo Ltd started with leased shops in prime locations in London and in Birmingham, and has added one similar leased shop per year in major cities of the UK since then. Jengo Ltd is owned jointly by Jenny and Gordon Freer, who between them have many years of experience in the fast-moving fashion and retail industries.
Although Jengo Ltd is not a large company and is operating in a very competitive market, it is highly regarded by consumers as offering long-lasting, fashionable clothes by a variety of established designers/manufacturers that represent good value, even though the retail prices are high. Jengo Ltd employs between four and eight well-qualified staff in each shop. At its head office there are five employees who are primarily involved in procurement and marketing. All the clothes are made in low-cost countries and are delivered straight to the shops by the manufacturers.
Jengo Ltd has supplied Palisade plc with financial statements for each of its five years of trading, and Palisade plc is satisfied that its financial performance has been excellent for the last three years and that its financial position is currently sound. Jengo Ltd has stated its strategy, using funds supplied by Palisade plc, is to expand its shop portfolio over the next year at three times the previous rate, and to start an online shop. Palisade plc is concerned however that, Jengo Ltd has prepared neither forecasts nor budgets for the trading period. Palisade plc’s board of directors believes this indicates weak planning and control within the company, and is reconsidering the purchase.

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Report on Measuring Performance
Introduction
Dear Mr. and Mrs. Freer,
In order to ensure Palisade plc board of directors in reliability of planning and control processes in Jengo Ltd, we need to supply them with the budget forecasting for the next year ended 30 June 2012. As Abraham Lincoln once said, “We must plan for the future because people who stay in the present will remain in the past.”(Garner, 2005)
The methods that need to be used in order to improve the quality of decisions making and forecasting in the company include SWOT analysis, PESTEL analysis and Porter’s Five Forces analysis.
Researchers define four basic questions that need to be asked in the beginning of any strategic planning process: 1) Where is the organization now? 2) Where does it want to be? 3) How will it get there? 4) How does it measure its progress? (Garner, 2005)

SWOT analysis
SWOT Analysis can be considered as a key to the company’s future success.
SWOT is actually an abbreviation of Strengths, Weaknesses, Opportunities and Threats. Business planning can’t be effective without usage of SWOT Analysis, because it helps business to evaluate “the existing weaknesses and threats, to reinforce strengths and to take advantage of opportunities as they appear.” (“Make Sure You SWOT Up to Survive & Thrive”, 2009).
Successful entrepreneur knows that it’s important to understand what’s happening in your industry; therefore SWOT Analysis helps to examine the organizational environment in details and to create a strategic plan determining where the company wants to be in the future.
Of course the vital condition of SWOT tactic isn’t only to determine the impact and trends of the environment but to implement the plan. Strong organizational leadership and initiative at this stage ensures strategic plan’s successful implementing.

PESTEL analysis
Some researches and companies especially in the United Kingdom use PESTEL analysis as a strategic tool in an addition or as an alternative to the SWOT method. PESTEL analysis means “Political, Economic, Social, Technological and Legal analysis” and includes analysis of macro-environmental factors as a part of strategic management analysis.
Actually, in the recent years PESTEL analysis model was updated and nowadays some analysts “extended it to STEEPLE and STEEPLED, adding Ethics and Demographic factors. (“PESTEL analysis of the macro-environment”, 2007)
PESTEL analysis helps to overview the variety of macro-environmental factors that needs to be considered by the organization; it also helps to understand the market trends (growth or decline), business position, potential and direction for operations. (“PESTEL analysis of the macro-environment”, 2007).
An important environmental factor is an ecological factor and factor of a green business growth. In my opinion, this factor definitely needs to be taken into consideration by fashion retailing companies, as customers have started to pay their attention to the ecological issues recently.
So, PESTEL framework ensures that all the influential factors of macro environment are analyzed.
Fashion retailing companies while making PESTEL analysis will have to overview the following factors:
• Local factors such as local economic growth rates;
• National factors such as UK laws on retailer opening hours and trade descriptions legislation and UK interest rates;
• Global factors such as the opening up of new markets making trade easier. For example, the labour force issues and recruitment opportunities may have a positive tendency for the retailers due to the new labour force arrival from the new members of EU. (“PESTEL analysis of the macro-environment”, 2007).