Competitive Strategy: PESTLE, Porter Five Forces and SWOT Analysis

This article discusses the significance of PESTLE, Porter Five Forces and SWOT analysis in determining the competitive scenario of business organizations. It provides examples of how TechnologyOne, Qantas Airways and Woolworths use these tools to design their business strategies. The article also explains the different elements of each tool and how they help in identifying the positive and negative factors for the organizations.

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Competitive strategy
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PESTLE analysis
Pestle analysis is one of the major strategic tools that are witnessing the growth in
popularity in the recent time. This strategic tool has different and diversified elements covering
different aspects of the current business scenario. The main objective of using pestle analysis is
to determine the external environments of business organizations that will determine their
business approaches (Ho 2014). In the present time, pestle analysis is gaining more importance
due to the reason that current political, social and economic scenario are rapidly changing and it
is important for the business organizations to use this analysis in order to have the idea about the
current external environment and design their strategic moves accordingly.
For instance, TechnologyOne is one of the major tech companies of Australia. They are
having their business operations outside of Australia but they are based in Australia
(Technologyonecorp.com 2018). The sector where they are operating is highly competitive in
nature. Moreover, the external environments in this sector are also rapidly and frequently
changing. In this case, the pestle analysis helps them in determine all the aspects effectively and
have their business approaches in accordance to that. The first element of the pestle analysis is
the political environment. This element helps in determining the political environment faced by
the organization. It helps them to have their business operation according to the political scenario
of Australia.
The next element is economical environment. This refers to the economic factors
including the competitive scenario faced by the organization. TechnologyOne will be able to
determine their competitive scenario with the help of the economic environment analysis. The
next element is the social environment. This refers to the social trends and brand value in the
market. Determination of this element helps in understanding the market trends and offering
products and services accordingly. The next aspect is the technological environment. This is the
most important element for TechnologyOne due to the reason that they are operating in the tech
market and development and evolution of the technological environment will determine their
business operation.
The next element is the legal environment. This refers to the regulations and legislations
faced by the business organizations in their business operation. TechnologyOne faces different

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and diverse legislations especially in their global business. Determination of this element will
helps in having the understanding of relevant legal aspects. The last element is the environment.
In the current time, TechnologyOne faces different environmental issues such as climate change
and pollution. Thus, it is important to determine the environmental issues and have effective
business strategies in place.
Porter five forces
Porter five forces help in determining the competitive scenario of the business
organizations. The current business scenario poses huge competitive challenges for the
organizations due to the presence of number of rivals in the same market sector (Dobbs 2014).
Qantas airways are one largest airliner in Australia and have their operations in number of
countries around the world (Qantas.com 2018). However, they are having number of competitors
in the global market. Thus, they are having the importance of determining the competitive
scenario in their business operation. Porter five forces are having five aspects or elements
covering different stakeholders in the business.
The first element of this model is the threat of new entrants. Entry of the new competitors
in the market will further reduce the profitability of Qantas airways and will increase the
competition. Thus, this aspect is used by the organization to determine the intensity and
probability of threat of new entrants in the market. The next aspect is threat of substitutes. This
determines the intensity of the presence of substitute offerings in the market. It is also important
due to the reason that the more will be the substitutes, the more will be the competitive risk of
Qantas airways.
The next element is the bargaining power of the buyers. In the current business scenario,
customers are having the upper hand in bargaining with the organizations due to the presence of
number of options. Thus, Qantas airways use this element of the porter five forces in order to
determine the bargaining power of the buyers and initiates strategies in order to reduce the
bargaining power of the buyers. The next element is the bargaining power of the suppliers. It
denotes the influencing power of the suppliers in the business operation. Determination of this
element helps Qantas to determine the influence of the suppliers and initiate strategies

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accordingly. The last element is the competitive rivalry. This is important because the more will
be the rivalry in the market, the more will be the requirement for extensive marketing activities.
Thus, it can be concluded that porter five forces will help Qantas in determining their
competitive scenario in relation to all of their associated stakeholders. This tool also helps them
to design strategies in accordance to the identified aspects of the competition in the market.
SWOT analysis
Swot analysis is probably the most popular and widely used management tools in the
current business state of affairs. This is due to the reason that swot analysis is easy to use and
implement and covers a vast area of the business scenario. It denotes the strengths, weaknesses,
opportunities and threats for the organizations. The key objective of using swot analysis is to
identify the positive and negative factors for the particular business organizations. Thus, it helps
the business organizations to initiate strategies to overcome the negative factors and enhance the
effectiveness of the positive factors. Retail sector is one of the business sectors, which is much
more competitive in nature and witnessing rapidly changing business and market environment.
Woolworths is the leading chain of supermarkets in Australia with having the market leadership
status (Woolworths.com.au 2018). However, due to the increase in the competition in the market,
they are in the need of determining the positive and negative aspects of them.
The first element of the swot analysis is strengths. This denotes the competitive
advantages of the organizations, which helps them to be ahead in the competition. Determination
of the strengths helps Woolworths to identify their areas of advantages and using them in
overcoming the challenges in the market. Determination of the strengths also helps them to
identify the area of differences with their rivals. On the other hand, identification of the
weaknesses helps Woolworths help in determining the area of improvements for them. This also
helps to determine the areas where they are lagging behind the competition. The next element is
the opportunities. This denotes the business potentiality for Woolworths that they can tap in the
future. This is also important to determine in order to design the future business approaches
according to the identified factors of the opportunities.
The last factor is the threat. It identifies the probable risks that will be faced by
Woolworths in their future business operation. This is also important and helpful for them due to

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the reason that, similar to the opportunities, identification of the threats will help them to design
their business strategies in order to overcome their future business threats. Thus, it can be
concluded that swot analysis helps the business organizations to have an overview of the
negative and positive factors faced by them in the current time and to be faced in the future.

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Reference
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), pp.6478-6492.
Qantas.com. (2018). www.qantas.com. [online] Available at:
https://www.qantas.com/travel/airlines/company/global/en [Accessed 16 Apr. 2018].
Technologyonecorp.com. (2018). www.technologyonecorp.com. [online] Available at:
https://www.technologyonecorp.com/about-us [Accessed 16 Apr. 2018].
Woolworths.com.au. (2018). www.woolworths.com.au/. [online] Available at:
https://www.woolworths.com.au/ [Accessed 16 Apr. 2018].