Assignment (Doc) | Competitive Strategy

Running head: COMPETITIVE STRATEGY
Competitive Strategy
8/14/2019

COMPETITIVE STRATEGY 1
Introduction
Strategic development is also called as strategic planning, is essential for
establishing and operating a business. In order words, it is said to be a game plan
that helps in setting goals and objectives but same like a game plan, it can be
changed depending on the changing market trends (Evans, 2013). The intent of this
essay is to present a paper based on different strategic development tools used by
different industries or businesses to identify, threats, challenges, strengths, etc. to
modify or design business strategies. The essay is focused on discussing the role
and use of three tools that are PESTLE, SWOT, and Porter Five Force Framework in
the business.
PESTLE Analysis
PESTLE Analysis is a strategic development tool that is used by the businesses for
analyzing and monitoring the factors of macro-environment that have a major impact
on the performance of the business. This tool support business in framing its
strategies based on all the six factors to reduce their impact on the financial as well
as non-financial performance (Perera, 2017). In addition to this, the tool also
supports business in taking expansion decision in any specific country by analyzing
its external factors. The six factors of the tool are explained below:
Political Factor – Political factor is focused on identifying the level of intervenes of
government in the country. This is comprised of foreign trade policies, trade
restrictions, political stability, etc. For instance, the Australia retail and supermarket
industry is majorly getting affected by the policies and laws implemented by the
government. The Australian federal government has introduced a competition policy
within the country to stop the big retailers like Coles and Woolworths in reducing the
competition from the market through their low price offering. This policy has been
implemented by the government because the dominance of these big players has
impacted the revenue of small businesses (OECD, 2010).
Economic Factor – Economic factor has a major influence on how the business
operates its functions and how much profitable it is. Economic factors comprise
exchange rate, economic stability, interest rates, inflation, etc. (Hasan, 2013). A drop

COMPETITIVE STRATEGY 2
in the economic condition of Australia has majorly affected the performance of
Woolworths because the economic activities in the market have decreased in
number. Besides this, the currency exchange rate fluctuations and the weakening
dollar of Australia dollar have negatively impacted the international retail operations
of the company.
Social Factor – This factor talks about the areas that comprise the attitude and
common belief of the country’s population. The factors that are comprised in this are
career attitude, population growth, age distribution, and health consciousness, etc.
The social factor has a major influence on the retail industry of Australia because the
people in the country now rely on that organization that meets their social
responsibilities. To meet this, for instance, Woolworths is involved in the CUFA
initiative. The motive of this program is to a neighboring village in Cambodia by
inviting investors to invest in the development (Woolworths Employees’ Credit Union
Limited, 2016).
Technological Factor – The increasing development of the technology in the market
raises the requirement for the business to have digital and technological advanced
operations to meet the changing shopping habits of the customer (McGrath and
Bates, 2013). If the business does not incorporate technologically advanced
operations it fails due to advance competition. For instance, to overcome the
challenges of this factor the Woolworths has installed a green refrigeration
technology such that the perishable goods can be stored for a longer period.
Legal Factor – This factor comprises equal opportunities, consumer rights, product
safety, health and safety, advertisement standards, etc. The implementation of the
carbon tax in the Australian retail industry has impacted the performance of
Woolworths and other businesses.
Environmental Factor – The environmental factor has recently become an important
aspect due to increasing raw material or natural resources scarcity, increasing
pollution, carbon footprints, etc. For instance, the performance of the Woolworths
has been influenced due to environmental factor because the winemaking and petrol
business of the company is posing negative threats on the environmental conditions.