Competitive Analysis Techniques

Competition 1
COMPETITIVE ANALYSIS TECHNIQUES
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Competition 2
Competitive Analysis Techniques
Introduction
An organization faces competition in an industry. To survive, it needs to come up with
strategies that give it a competitive advantage. As a result, companies use analytical tools to
know about their position, competitors' position, and industry. This essay explores the use of
PESTLE, SWOT and Porter's Five.
PESTLE
PESTLE stands for political, economic, social, technological, legal and environmental
factors. Evidently, it is mainly used to analyze the external factors that influence an organization.
According to Sammut‐Bonnici (2015), this tool is used in making strategic decisions and
planning. For example, knowing about economic factors can assist in setting prices.
Additionally, PESTLE is used with SWOT analysis to get a comprehensive understanding of the
organization’s position (Mullerbeck 2015). In analyzing the company, first, the SWOT analysis
identifies the factors affecting it and the PESTLE analysis provides a detailed discussion of these
factors.
PESTLE analysis is advantageous due to the following. Firstly, it creates a deeper
understanding of the organization (“PESTLE analysis” n.d.). The understanding is acquired from
evaluating its external environment. Secondly, PESTLE allows the organization to take
advantage of new opportunities identified (“PESTLE analysis” n.d.). For example, from the
analysis, the organization gains knowledge of opportunities in the external environment that it
can use to increase production. Thirdly, the tool is easy to use and provides a simple outline
(“PESTLE analysis” n.d.). PESTLE is used to analyze the factors mentioned earlier, which
provides a simple framework for analyzing an organization.

Competition 3
PESTLE analysis also has the following limitations. The first one is that it is based on the
study of the external environment (“PESTLE analysis” n.d.). Therefore, the tool does not provide
a complete analysis of the organization, which may make it difficult to make decisions. The
second limitation is that it can lead to accumulation of too much data. The article “Advantages
and disadvantages of PESTLE Analysis" (n.d.) states that the excess data may make it difficult to
analyze the environment and draw conclusions. The last limitation is that the tool is simple and
may not provide comprehensive results (“PESTLE analysis” n.d.). Therefore, the organization
may require additional tools for analysis.
SWOT
SWOT is a tool used to analyze a firm's strengths, weaknesses, opportunities, and threats.
According to Sammut‐Bonnici and Galea (2015b), the use of SWOT analysis aids in identifying
the competitive advantage of the firm. This objective is achieved through the analysis of internal
factors because the firm identifies areas to improve to gain a competitive advantage. The tool
also analyzes the external environment through opportunities and threats (Sammut‐Bonnici &
Galea 2015b). The organization can use the information acquired to create a competitive
advantage. Overall, the tool is used to analyze the internal and external environment to gain a
competitive advantage.
SWOT analysis has several advantages. The first benefit is the ability of the tool to be
used on a specific objective of the company (“SWOT analysis” 2013). For example, a SWOT
analysis of an existing product’s market can be conducted. For the second one, the SWOT
analysis provides a guide that can be used by the organization (“SWOT analysis” 2013). SWOT
analysis indicates areas of weakness, which a company can apply as a guide when improving
performance. The last benefit is the use of SWOT to acquire a deeper understanding of the