Business Strategy Development Tools

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Business Strategy Development Tools

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1. Executive Summary
Wesfarmers is one of the listed company in the Australian stock exchange which is located in
Perth. It is the most recognized brand in Australia and operated in retail, manufacturing and
industrial sectors. It deals in a wide variety of products which provides high sustainable profit
to the company. The paper summarizes several business strategic development tools such as
PESTEL, SWOT, Five forces and Strategy formulation. Each tool is used for identifying
different factors and in a different process. PESTEL analysis is used for identifying the
external environment aspects that impact the business in various ways. Hence, it has been
found that Wesfarmers applied the PESTEL analysis tool to determine the external factors so
that it could increase its profitability. SWOT analysis is essential to evaluate the strengths as
well as weaknesses, threats, and opportunities. It is found that Wesfarmers identified its
strengths, weaknesses, opportunities, and threats so that it could improve its strategy and
take advantage of its strength to get success in the market.
Five forces analysis is used for understanding the rivals of the company, power of consumers
and suppliers, threats of new business and threats of substitutes. Wesfarmers has used the
application of five forces for gaining competitive advantage as well as profitability. Strategy
formulation is a critical process for selecting a suitable course of action to accomplish goals.
Hence, Wesfarmers has successfully applied this process for accomplishing several goals of
the business. It could be recommended to Wesfarmers that it should provide a memorable
shopping experience to its customers by offering the products at a reasonable price.

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Table of Contents
2. Introduction....................................................................................................................................................3
3. Main Tools......................................................................................................................................................3
3.1 PESTEL....................................................................................................................................................3
3.2 FIVE FORCES...........................................................................................................................................4
3.3 SWOT......................................................................................................................................................5
3.4 STRATEGY FORMULATION......................................................................................................................5
4. Conclusion......................................................................................................................................................7
5. References......................................................................................................................................................8
6. Appendices.....................................................................................................................................................9

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2. Introduction
The primary purpose of the paper is to evaluate the essential strategic business development
tools used by several companies. The tools which will be described in the paper are PESTEL
analysis, Porter’s Five Forces model, SWOT analysis and Strategy formulation. Every
business should have strategy development tools for achieving the primary goals of the
organization. Wesfarmers is one of the leading company in Australia. The company was
founded in 1914 and engaged in retail, manufacturing of chemical and fertilizers, gas
distribution and coal mining businesses. The strategy development tools are used for
analyzing the business of Wesfarmers. The strategic tools are useful in determining the
competitive environment, external as well as internal factors that have an impact on the
performance of the company. Formulation of strategy is the critical part of a business
management process. The analysis of various factors by using the tools would help in
executing better strategies.
Figure: Activities of Wesfarmers
(Source: Bondarenko et al., 2017)
3. Main Tools
3.1 PESTEL
3.1.1 Theories including journal articles
According to the theoretical framework based on the article, PESTEL analysis is an essential
tool for the business entity to determine the external factors of the environment ( Nguyen,
2016). It also helps in evaluating certain advantages or disadvantages of the company.
PESTEL mainly stands for political, economic, social, technological, environmental and legal
factors. It is crucial for every business to use PESTEL analysis.
3.1.2 Application and its impact