Competitive Strategy: SWOT, PESTLE and Five Force Analysis

This paper discusses the importance of management tools like SWOT, PESTLE and Five Force Analysis in achieving competitive advantage in the market. It includes practical examples and how these tools help in evaluating internal and external factors of the business. The paper concludes that these tools help to enhance the profits and productivity level of the company and accomplish overall goals and objectives.

Running head: Competitive strategy
Competitive Strategy

Competitive Strategy
Table of Contents
Five force analysis........................................................................................................................................1
PESTLE ANALYSIS.........................................................................................................................................2
SWOT ANALYSIS...........................................................................................................................................2
References...................................................................................................................................................4
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Competitive Strategy
Introduction
It is analyzed that there are many tools of management which is important to conduct the
activities smoothly. The tools of management assist in achieving the competitive advantage
prevailing in the market. This tool helps to minimize the issues arising in the organization. There
are various management tools like SWOT, Porter five force models and PESTLE. In this paper,
the discussion will be made on these 3 management tools which will help to conduct the
activities in a smooth manner. It is seen that management tools help to implement the strategies
so that business can attain overall goals and objectives in an effective manner.
Five force analysis
Five Force analyses is related to the five factors like the threat of entrants, power of
suppliers, the power of buyers, rivalry against the competitors and threat of substitute. This tool
assists the organization to evaluate the performance and also the productivity level of the
company. Also, the five force factor helps to analyze the opportunities that are prevailing in the
market (Porter and Heppelmann, 2014). It is seen that five force analyses helps to consider the
changes that are made in the company. Also, the plans are made by focusing on five force
analysis of the company. It is analyzed that when the company takes into consideration effective
strategies then they use five force analyses so that profitability can be enhanced by the company
(Elmes and Barry, 2017).
The practical example that can be discussed is related to Coles. If a threat of substitute is
seen in the company then it is analyzed that it is high as the customers have many choices to
substitute the products. Also, if rivalry against the competitors is seen then it is high as there are
many competitors who are from the same sector like Woolworth. If the focus is given to the
power of suppliers then it is seen that it is low as there are many online stores available for the
company. Power of buyer is seen then it can be analyzed that the wants of the customer's changes
from time to time. The threat of entrants is also related to the company and it is seen that it is
high as there are many companies who are entering the market (Laszlo and Zhexembayeva,
2017). So, it is seen that the five forces are analyzed by the sales department or by the top
management of the company.
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Competitive Strategy
PESTLE ANALYSIS
This is also one of the essential management tools which help to evaluate the market
conditions in a proper manner. It is seen that this analysis focuses more on political, economic,
social, technological, legal and environmental factor. This tool helps the organization to enhance
the overall growth of the activities in a market. It also assists to evaluate the business in terms of
economic and social growth (Rothaermel, 2016). This tool is taken into consideration by the
managers of the company to analyze the market condition. By considering the market conditions
the company tries to promote the product in the market. It also helps to know the actual position
and also increase the overall knowledge of the company (Lee, Yoo, and Kim, 2016).
For example: Hershey's is one of the largest companies in the food sector and it is
important to follow the rules and regulations which are imposed by the government. The rules
and regulations that are followed by the company come under legal factor. In the economic
factor, the analysis is made of the customer consumption pattern and the company also gives
emphasis on the innovation of the product so that growth can be enhanced. In the technological
factor, the company gives emphasis on the latest technology so that productivity can be
enhanced. It is seen that this factor helps the company to analyze the actual position of the
company (Jarzabkowski and Kaplan, 2015).
This tool mainly focuses on the specification of the product and also assists in creating a
plan so that goals and objectives can be accomplished. It is seen that opportunities that are seen
in the market can be analyzed by this tool and the company can easily grab that opportunity
(Madsen, and Walker, 2015). Pestle analysis helps the company to enhance the overall
motivation level of the company by focusing on the strategies so that large market can be
captured. This tool helps the company to reduce the threats and also best strategies can be
considered by the company. It is seen that if this tool is considered by the company then it can be
possible to understand the target market by focusing on the age and population growth.
SWOT ANALYSIS
This tool is related to the strength, weakness, opportunities, and threats prevailing in the
company. Strength and opportunities of the company help to enhance the market share.
Weakness and threats of the company give negative impact on the overall activities of the
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Competitive Strategy
company. It is seen that by focusing on this tool it is seen that right direction can be chosen for
the company so that success can be achieved (Menga et al., 2015). It is also seen that the
organization can minimize the weakness by giving focus on this tool. The growth can also be
planned by analyzing the strength and weakness of the company. The threats that are analyzed
can be minimized if the company takes into consideration this tool as it helps to implement the
strategies in an effective manner (Grant, 2016).
This tool helps to enhance the overall productivity of the business by analyzing the
overall weakness of the company which is prevailing in the market. This tool also helps in
analyzing the traits and qualities so that customers can be attracted and financial resource can
also be enhanced. It is evaluated that this approach is one of the cost-effective approaches that
helps the business to analyze the internal factor in a proper manner (Ramkumar, Schoenherr and
Jenamani, 2016).
For instance: Tesco analysis all the factors and conduct the activities accordingly. It is
seen that the strength of the company is that it is one of the largest so it can expand its business
in a proper manner. The threat is from the other competitors who are prevailing in the market
like Wal-Mart. Opportunities can the strategies that should be taken into consideration so that
growth can be achieved. Weakness is that the company depends more on UK and Europe to
enhance the sales in the market.
Conclusion
So, by analyzing the paper it is concluded that the company can achieve success in the
market by focusing on the management tools. It is seen that these tools play a great role to give
information to the organization so that activities can be done accordingly. These management
tools help to evaluate the internal and external factor of the business. As it is seen that there are
many competitors prevailing in the market are high so it is important to consider these
management tools so that growth can be achieved. These tools help to enhance the profits and
productivity level of the company. It also gives a positive impact on the satisfaction level of the
customers. These tools can also help to accomplish the overall goals and objectives of the
company. The purpose of the business can be easily elaborated with the help of management
tools.
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Competitive Strategy
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Competitive Strategy
References
Elmes, M. and Barry, D., 2017. Strategy retold: Toward a narrative view of strategic discourse.
In The Aesthetic Turn in Management (pp. 39-62). Routledge.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Jarzabkowski, P. and Kaplan, S., 2015. Strategy tools‐in‐use: A framework for understanding
“technologies of rationality” in practice. Strategic Management Journal, 36(4), pp.537-558.
Laszlo, C. and Zhexembayeva, N., 2017. Embedded sustainability: The next big competitive
advantage. Routledge.
Lee, S., Yoo, S. and Kim, D., 2016. When is servitization a profitable competitive
strategy?. International Journal of Production Economics, 173, pp.43-53.
Madsen, T.L. and Walker, G., 2015. Modern competitive strategy. McGraw Hill.
Menga, E., Dan, A., Lu, J. and Liu, X., 2015. Ranking alternative strategies by SWOT analysis
in the framework of the axiomatic fuzzy set theory and the ER approach. Journal of Intelligent &
Fuzzy Systems, 28(4), pp.1775-1784.
Porter, M.E. and Heppelmann, J.E., 2014. How smart, connected products are transforming
competition. Harvard Business Review, 92(11), pp.64-88.
Ramkumar, M., Schoenherr, T. and Jenamani, M., 2016. Risk assessment of outsourcing e-
procurement services: integrating SWOT analysis with a modified ANP-based fuzzy inference
system. Production Planning & Control, 27(14), pp.1171-1190.
Rothaermel, F.T., 2016. Competitive advantage in technology intensive industries.
In Technological innovation: Generating economic results (pp. 233-256). Emerald Group
Publishing Limited.
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