Strategic Analysis Tools for Competitive Advantage in Management

This essay discusses the most common strategic analysis tools like SWOT analysis, Pestle analysis, Ansoff matrix and more for competitive advantage in management. It also provides their application in companies like Starbucks, Apple Inc., and Woolworth.

Management
Competitive Advantage
Student’s name
8/7/2019

Competitive advantage 1
Strategy development tools carries the most common analysis tools which mainly includes
SWOT analysis, Pestle analysis , ansoff analysis and much more which they helps the
organization to set their goals accordingly (shtal, et al, 2018). Other than this, these strategic
aspects helps in building future actions that what is most important things to be done, how to
manage the suppliers and the partners effectively. Moreover, helps in getting resources on
marketing strategy and helping in getting sure that which product or the services are always best
for the organization success (Cadle, Paul, & Turner, 2014).
PESTLE analysis is one of the macro environmental framework or the business strategic tool,
which mainly applied to analyze or to monitor the environmental factors effect over the
organizations workings. This tool is mainly used at the starting of the business, which mainly
talks about the political, economic, social, technological, environmental and legal aspects of the
environment, and how do they affect the organization performance (Pestle analysis, 2019).
Political factors- This factor mainly highlights about the government intervenes which mainly
includes government policy, political stability, instability, foreign trade policy, tax policy, labor
law and trade restriction. Other than this, the government also tackles infrastructure and health
regulation. This is all done because of seeing or accessing the attractiveness of the potential
market. Example- Woolworth before entering in the market analyzed the legal framework for
contract enforcement, trade regulations, taxation rates, incentives, and most importantly, seeing
the political stability and importance of food retailing sector in the country’s economy (França,
et al, 2017).
Economic factor- This factor mainly highlights about economies performance, which includes
economic growth, exchange rates, interest rates, disposable income and it mainly comprises of
the income of the consumers and the unemployment rates within the economy. All these factors
have direct or the indirect relation with the company performance and majorly affects the
purchasing power and the demand and supply model of the economy. Example- Woolworth at
initial faced my financial crisis, which hits the company performance at large, but in some
market the company has well performed despite of financial disruption. Hence it is seen that
Woolworth has more stability which helps them in continuing the business operations (Pestle
analysis, 2019).

Competitive advantage 2
Social factors- social aspect mainly highlights about society culture, demographics, customs,
norms, value of the population, which mainly affects the organization operations. This factor also
highlights about population growth, age, distribution, career attitudes, safety emphasis, lifestyle
attitude and cultural barriers. Example- Woolworth mainly focuses on target market and the
development of the plan so that with customers they can earn success. In this, they keeping the
social trends in considerations, target the large customer base, and earn success in financial terms
as well as in reputation (Pestle analysis, 2019).
Technological aspect- this aspect highlights about the technology which the company applies
and enhances the shopping experience of the customers which are the main constitute and the
focus of the organization. Various companies applies service oriented architecture in helps them
in managing the effective management, supply across the retail outlets. Hence, it is mandatory
for all the organization to incorporate the upgraded technologies which surely affects the sales
and also helps in gaining the strong position in the market as compared to their competitors..
Woolworth in this case, is innovative and has had adopted the various updated technology to
touchdown the large audience. Moreover, it has seen that business need to link the technology
with or according to the customers taste and the preferences, which will further affects the sales
and the operation of the organization at large (Ho, 2014).
Legal- legal framework mainly comprises of taxation policies, employee management
regulations and recruitment aspects. Moreover, in fooding industries companies’ needs food
licensing, this is all based on the countries regulations, which are set by their government.
Environmental- this aspect displays knowledge about the environment friendly business
practices. As Woolworth works over it very effectively as they reduce the wastage of the natural
resources, they also participates in recycling activities and also adopting various sustainability
practices which helps in establishing the image of the organization which supports the
sustainability initiatives and helps in building the reputation of the organization in the market in
sustainable context (Pestle analysis, 2019).
Ansoff matrix- Ansoff matrix mainly highlights about the product and the market growth, which
mainly helps the businesses to determine whether the market is new of the existing. It comprises

Competitive advantage 3
of four main marketing strategies named as, market penetration, product development, market
development and diversification.
Market penetration- Market penetration mainly highlights about the selling of the existing
products in the existing market. In terms of apple company it operation divides into the 5 main
segments such as America, china, Europe and Asia pacific. Moreover, all around the world they
are having around 500+ stores.
Product development- these aspects mainly comprises of development of the new products,
which are need to be sell in the existing market. As it is one of the core growth strategies of the
company to be successful in future. Apple does the same for its growth. They keep on
experimenting new features for the new launch in the same market and tap a greater customers
segment than before. According to the analysis, every year with the new launch they have earned
around USD 14,24 billion till 2018.
Market development- market development strategy highlights about the finding the new market
for the existing products. This strategy is also good for the growth generation of the apple
company. As they are targeting the many different customers such as people with the good living
standards are the first priority. This strategy shows the more earning of the firm and also good
the long perspective of apple Inc.
Diversification- diversification aspect states that developing a new product to sell into the new
market and this is one of the most risks taking business strategy, which the company does for
more earnings. In this case, apple does not engage in diversification business strategy but in
global context, apple has earned the largest source of revenue and is expected to embrace the
diversification strategy for the short or the medium term perspective (Darroch, 2014).
SWOT analysis- SWOT analysis is one of the strategic frameworks, which is mainly applied for
analyzing the external as well as internal factors for the business, which mainly affects the
business growth and earnings. It mainly helps the company to set their plans accordingly so that
without any fear the set objectives can be achieved. SWOT analysis mainly highlights about
strength of the company, weaknesses, opportunities and threats are the external sources, which
the company needs to consider furthering out, perform (Van Vught, & Huisman, 2014).

Competitive advantage 4
Strength- If we talk about strength it mainly highlights about the company strong points, which
can be taken as plus points and will further helps in earning good profits. In terms of Starbucks,
Strong brand image, strong financial performance, extensive international supply, quality, taste,
and standardization in product making, employee treatment with well customers services are the
plus points which makes the company more known (Haskova, 2015).
Weaknesses- Weaknesses aspect is also highlights about the internal weaknesses of the firm,
which the company faces and works over to reduce it. Like in Starbucks, high price, imitability
of the products, procurement practices and lastly the recalling of the product, which can
generates the negative affect over the brand image of the company and leads to the loss of large
customers base (Geereddy, 2013).
Opportunities – opportunities mainly highlights about the external aspect from which the
company can gain a lot of which they have missed out due to the internal weaknesses. Therefore,
by grasping those opportunities Starbucks earns more than they expected. Likewise, expansion in
the developing countries such as India. Moreover, introducing new flavors, new products in the
market to again tap the large customer base. Other than this, business diversification and the
product specification are also the opportunities, which the company can grasp to earn more from
the market (Haskova, 2015).
Threats- Threats are also the external sources from the company will be majorly harmed if they
are not removed or ignored from the way of success. Likewise, in Starbucks case, competition
with the low cost sellers is much seen as their plus point is that they sell their coffee at lower
prices than Starbucks. Other than this, Starbucks is also facing competition with the big outlets,
as due to the aggressive competition with the multinational companies like McDonalds, Burger
king has also pose threat in the market position for Starbucks (Geereddy, 2013).
Conclusion
From the above essay we can conclude that, there are the numerous strategic market analysis
tools, but the most famous tools which most of the company applies before entering into the
market are- Pestle analysis, SWOT analysis, ansoff matrix analysis. All these help the company
to know about the external as well as internal markets and accordingly they set their future
targets or the objectives with the main aim of achieving them. Similarly, in this essay, three

Competitive advantage 5
companies such as Starbucks, apple Inc., and Woolworth market strategic analysis is done to
know more about the market and set the future actions accordingly so that the company earns
profits effectively and efficiently.
References
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Darroch, J. (2014). Ansoff’s Growth Matrix—In Detail. In Why Marketing to Women Doesn’t
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