The Muamalat Newsletter Vol. 1 2024

FEM eNewsletter | June 2024 48 Unfortunately, a significant number of SMEs exhibit a tendency to seek easy fixes, opting for quick fixes rather than engaging in the rigorous analytical processes that strategic planning demands. This mindset is driven by the assumption that a more direct resolution appears to be within reach. While this approach might promptly produce an actionable plan, it often fails to address the underlying, more critical needs of the business. Indeed, anyone can propose a solution or provide advice, but the real question is whether these suggestions are truly tailoredtotheuniquerequirementsof the business and capable of addressing its core issues. If the issues can be easily identified, then remedies would have been deployed earlier. What is the value of implementing a strategy that fails to resolve the fundamental challenges faced by a business? The key to discerningthemostappropriateandeffective course of action lies in the comprehensive understanding that can only be achieved through diligent engagement with both PEST and SWOT analyses (Al-Araki, 2013). By conducting these evaluations, the owners and management teams of SMEs can gain a deep insight into their current situation, recognize the challenges they face, and identify potential opportunities. Hence, SME owners are reminded not to undermine the complexity of the issues and the importance of seeking a thorough understanding. Easy fixes are for easy problems, there is no easy fix for critical problems. Enterprises, regardless of their size and the sector in which they operate, function within a specific business environment where the influence of external factors can be profound and, in many cases, critical—particularly for SMEs. To overlook these environmental factors is not only negligent but potentially disastrous. Conversely, recognizing and comprehensively understanding these external forces can equip SMEs with the necessary insights to navigate through complexities, thereby significantly enhancing their chances of survival and success in a competitive landscape. Therefore, by utilizing the PEST analysis tool, SMEs can gather, synthesize, organize, analyse, and consolidate information in a meaningful manner (Sammut-Bonnici & Galea, 2014; Seow, 2022). Upon gaining a comprehensive understanding of the macro-environment through PEST analysis, it is imperative to conduct a SWOT analysis to assess how a firm measures up against its industry rivals (Puyt et al., 2023; Seow, 2024). This evaluation demands a high level of honesty and should not solely relyon internal perceptions. Instead, it gains significance when it incorporates the views of customers, suppliers, and competitors. Firms often tend to rate themselves favourably, which may skew the real picture. A more objective approach— gathering external feedback—can reveal vital insights into how a business might improve beyond its current operations. The opportunities and threats analyses enable SMEs to make good reference from the valuable insights derive from PEST analysis.