Competitive Strategy: SWOT, PESTLE and Porter’s Five Forces Analysis

This paper elaborates on the competitive analysis of three companies- Japara aged care, CostaExchange limited and Apotex pharmaceuticals based on SWOT, PESTLE and Porter’s five forces analysis.

Running head: COMPETITIVE STRATEGY
Competitive Strategy
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1COMPETITIVE STRATEGY
Competition has always stayed as the core to success as well as failure of an
organization belonging from an industry. The organizations through their very own strategy
tend to achieve their desired positions within their industries and competitive advantage is the
ability of the organizations for gaining their seeking position via the attributes and available
resources (Wagner and Hollenbeck 2014). However, each and every organization faces
threats and challenges from their rival companies in the market. Therefore, it is very
important for each and every company to have its own competitive strategy in order to make
sure that they are obtaining continuous returns for longer period of time. This paper shall
elaborate on the competitive analysis of the three companies- Japara aged care,
CostaExchange limited and Apotex pharmaceuticals. It will shed light on the business
analysis these three companies based on the three strategic analysis tools- SWOT, PESTLE
and Porter’s five forces.
The SWOT analysis refers to the process of strategic planning, which is used for
helping a firm identify its own internal strengths and weaknesses and for assessing its
external threats and opportunities present for it (Xingang, Jiaoli and Bei 2013). It is basically
aimed for specifying the objectives of the business ventures and that of the projects in order
to identify the internal and external factors which are favorable for achieving the desired
goals and objectives. It greatly helps in minimizing the effect of the weaknesses in a business
by maximizing the strengths of it (Yuan 2013). It is intended especially to specify the
external and internal factors that are required to take into consideration for attaining the
objectives of the business. Different companies belonging from different industries has
difference their SWOTs (Aithal 2016). For example, if taking into account the aged care
companies like Japara aged care, in Australia, the strengths of it include Strong free cash
flow, superb performance, reliable supplier and a successful track record of product
innovation. On the other hand, the strengths of Pharmaceuticals Company like Apotex are

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that it offers a long array of services to the customers including retail services, business
advisory services and wholesale product delivery. With the same CostaExchange agriculture
company has a huge number of landmark banners and products available to serve its
customers (Wright and Lyrene 2016). Secondly, the weakness of the aged care company is
that its total percentage of contribution, profitability ratio and its financial planning is very
low. It also has a very short success outside its main business. In case of the Apotex
pharmaceuticals, the supposed accounting discrepancies as well as the sigma takeover dispute
and controversies have influences the company in great ways. Furthermore, the opportunities
that are present for the aged care is that there is a good scope of growth in the field of
personal care in the Australian region. With the same, in Australia are emerging of new
markets, low rate of inflation, and emergence of new technologies, introducing latest taxation
policy, different trends in the behavior of consumers and attaining more customers from
online platforms. Apparently, the threats include increase in trend of isolation in the
economical environment of Australia that has the possibility of affecting the global sale
market. Along with this the growing power of the Australian local distributors and the
seasonality in customer demand are also acting as a major threats now-a-days.
The term PESTLE is an acronym for Political, Economic, Socio-Cultural,
Technological, Legal and Environmental (Talamini et al. 2013). PESTLE analysis presents a
complete composition of the macro-environmental factors, which are used in the scanning of
environmental components of strategic management. The PESTLE analysis is a strategic tool
that is used to understand the directions for the operations, growth and decline of market as
well as the present business position. Political factors of the PESTLE are generally the way to
assess how a country’s government can intercede in the economy (George et al., 2015).
Secondly, the economical factors consist of the economic growth, rates of interests and
everything else related to the economy. Thirdly, the social factors refer to the increase or

3COMPETITIVE STRATEGY
decrease in health consciousness among the customers, the cultural aspects, population rates,
safety issues and age distribution. Fourthly, technological factors include aspects like R&D
activities, automation, as well as the rate of technological changes (Shin 2014). Moreover, the
last two factors of legal and environmental is all about the changes in laws and regulations
within a country as well as change in climate that can affect the overall business of a
company in great terms. These factors affect the firms more or less in similar ways. They are
nearly same for each and every organization. While considering these three companies, the
political factors that can affect them are level of corruption, taxation; employee benefits
favored trading partners, and product labeling. Pricing regulations is also one of the major
political factors that have an impact on the business of these organizations. The economic
factors include interest and inflation rates, discretionary income, labor costs, economic
growth, level of education, unemployment, as well as the different stages of business cycle
like recovery, recession and prosperity. Furthermore, the socio-cultural factors consist of the
attitudes, culture such as gender roles, class structure, demographics, education standard etc
(Lawah and Zanna 2013). On the other hand, the technological factors also affect these three
companies by affecting their cost structure, value chain and product offering. Moreover, the
changes in the laws and regulations, introduction of new governmental policies such as
employment law, health and safety laws greatly affect the businesses in every industry.
Lastly, climate change, waste management, water and air pollution, weather and sustaining
renewable energy etc all falls under the aspects of environmental factors.
Finally, Porter’s five forces is another set of tools that is used to assess the
competition of a particular business in the market (E. Dobbs 2014). It was introduced by
Michael Porter and is divided into horizontal and vertical forces. The horizontal forces
include the competitive rivalry, threat of substitutes and threats of new entrants, while the
vertical forces include the bargaining power of the customers and that of the buyers (Yunna

4COMPETITIVE STRATEGY
and Yisheng 2014). As competition is increasing rapidly in the current business environment,
the rivalry among the players is thus getting more intense. As a result, in order to sustain, the
companies has to decrease down its product and service prices, which will in turn decrease
the profitability of the organizations. For example, the Japara aged care, CostaExchange
limited and Apotex pharmaceuticals are currently operating in a very competitive industries
and this competition is taking the toll on the long term profitability of the organizations. The
threats of new entrants puts pressure on these companies by reducing costs, providing value
proposition to the customers and by lowering down the pricing strategy (Porter and
Heppelmann 2014). However, it also brings in innovation as well. With the same, the
bargaining power of the suppliers has the tendency to drive down the margins that these
organizations could have earned. The customers also tend to buy best things in lowest price
possible. This puts a great pressure on each of these companies’ profit margins.
From the above discussion it can be concluded that SWOT, PESTLE and Porter’s
Five Forces are the three different set of business tools that are used in order to analyze and
help the companies in improving their competitive positions in the business environment.
SWOT helps the companies to focus on their critical factors by ignoring the ones that are less
important. Pestle identifies how the macro environmental factors can affect the competitive
standing of a business. Porter’s five forces, on the other hand gives a clear view on where the
power lies in competitive situation.

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