Competitive Strategy: PESTLE, Five Forces and SWOT Analysis

This essay discusses the competitive strategy tools like PESTLE, Five Forces and SWOT analysis that are required within an organization to identify the threats and opportunities present in the market. The PESTLE analysis and the Five Forces analysis are used to identify the risks that are present in the external environment, which may affect the smooth operations present within the company. The SWOT analysis on the other hand is used to identify the opportunities and the threats that are present within the organization.

Running head: COMPETITIVE STRATEGY
Competitive Strategy
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1COMPETITIVE STRATEGY
Table of Contents
Introduction......................................................................................................................................2
PESTLE analysis.............................................................................................................................2
Five Forces analysis.........................................................................................................................3
SWOT analysis................................................................................................................................4
Conclusion.......................................................................................................................................5
Reference List..................................................................................................................................7

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Introduction
This essay will be dealing with the competitive strategy tools that are required within an
organization so that they can function in a proper manner and identify the threats and
opportunities that are present in the market. It will help the organization in understanding the
competitors that are present in the market, which can affect the internal and the external
environment of the particular company (Team 2013). The PESTLE analysis and the Five Forces
analysis are used to identify the risks that are present in the external environment, which may
affect the smooth operations present within the company. The SWOT analysis on the other hand
is used to identify the opportunities and the threats that are present within the organization. These
tools will help Woolworths in gaining a better insight regarding the factors that affect their
business so that they can function in a proper manner (Ho 2014).
PESTLE analysis
This tool is used in keeping a track of the external environment in which the company is
operating so that they can have a clear idea of the market before they are launching a new
product or a service in the market. The analysis is a mnemonic that stands for Political,
Economic, Social, Technological, Legal and Environmental. The political factors help in
determining the influence of the government within the economy of the industry. The tax and
fiscal policies that are adopted by the government may affect the overall strategy of the business
within the industry (Del Marmol and Feys 2015). The economic aspect enables the company in
understanding its performances, which has a long-term effect on the company when it is
impacted directly on the organization. The rate of inflation and the foreign exchange rates
influence the economic performance of the company in a direct manner that needs to be analyzed
(Newton 2014).
The social factors help in understanding the cultural trends, population size and the
demographic of the area so that the company can manufacture or sell the products that will be
consumed by the local masses. The technological factors refer to the level of automation along
with the research and development that needs to be done so that it can help in gaining a
competitive advantage in the market (Ho 2014). The legal factors need to be assessed so that the

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policies and the safety laws that are present in the country can be understood. The environmental
factors need to be assessed as well so that it can help the company in gaining a better knowledge
regarding the surrounding environment (Team 2013).
The managers of Woolworths uses this tool so that it can help them in identifying the
possibilities that are present in the external environment before they are launching a particular
product or service.
Five Forces analysis
This analysis helps the company in evaluating and assessing the competitive strength so
that the position of the company can be identified within the chosen industry. The strength of the
organization needs to be determined so that it can provide the current position of the company
within the market and the profitable ways when a new product or service is being launched by
the company (Barney 2014). The supplier power provides an assessment of the impact that the
suppliers will have in raising the process of the materials that are being supplied within the
organization. The company also gains an insight regarding the strength that suppliers possess in
the market and the switching cost of the company from one supplier to another. The buyer power
helps in assessing the impact that the buyers have in reducing the prices of the products in the
market. The company needs to identify the number of buyers present in the market and the cost
that they are willing to pay when the company switches to another supplier (Franek and Kresta
2013).
The competitive rivalry helps in assessing the capability of the competitors in influencing
the product or the service in the market. The competitors provide the same products in the
market that reduces the attractiveness of the original company in the market (Grant 2016). The
threat of substitutes need to be analyzed so that the company can get a better understanding of
the likeliness of the customers in changing to the alternative company if they increase the price
of the particular products. The threat from the new entries in the market needs to be analyzed so
that the profitability of the company does not get hampered (Barney 2014).
This analysis is mostly done by the managers of marketing team that is present in
Woolworths so that they can have a better understanding of the market before launching a
product or service in the market.

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SWOT analysis
This analysis is done so that the strengths and weaknesses can be identified for the
company based on which the opportunities and threats that may affect the company can be
analyzed. It will help the company in improving its business and identifying the areas, which
needs to be improved so that the competitive landscape can be identified for the business. The
internal environment of the company is analyzed mainly with the help of this tool (Helms and
Nixon 2013).
The strengths of the company are the major factors that help them to survive in the
market. These factors need to be identified so that it can be improved on a constant manner. The
intellectual properties that are present within the organization are its strengths, which need to be
improved on a constant manner. The weaknesses on the other hand needs to be identified as well
so that it could be improved by the company, which will help in turning the negative in to
positive aspects. The identification of the weaknesses by the company will help in assessing the
loopholes so that it can be rectified in a proper manner (Hill and Westbrook 2015).
The opportunities that are present within the company need to be identified by the
company so that it can help in attracting the customers towards its products and services. It will
also help the company in improving its rate of profitability by identifying the opportunities that
are present within the company. The analysis of the threats will help in identifying the obstacles
that are present within the company that needs to be overcome so that the company can gain a
competitive advantage in the market (Gable et al. 2017).
The managers of Woolworths will be doing this analysis so that they can gain a better
knowledge of the internal strengths and weaknesses that are present and identify the
opportunities and threats that are present within the company.
Conclusion
Therefore it can be concluded that the use of the competitive strategy tools will help
Woolworths in understanding the internal as well as the external environment in a better manner.
The managers of Woolworths need to identify the potential and the weaknesses of the company
so that the resources can be utilized in an efficient manner, which will help in improving the
operation of the company as well. It will also result in identifying the opportunities and the risks

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that needs to be dealt with so that the company can be competitive in the market. This will help
the company in gaining a competitive advantage in the market, which will help in attracting the
customers towards the products and services that are being offered by Woolworths.

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Reference List
Barney, J.B., 2014. Gaining and sustaining competitive advantage. Pearson higher ed.
Del Marmol, T. and Feys, B., 2015. PESTLE Analysis. 50Minutes.
Franek, J. and Kresta, A., 2013. Competitive strategy decision making based on the five forces
analysis with AHP/ANP approach.
Gable, G.G., Lee, J.N., Kwahk, K.Y. and Green, P., 2017. Administrative placement of the
information systems academic discipline: a comparative SWOT analysis. Communications of the
Association for Information Systems, 21(1), p.8.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Helms, M.M. and Nixon, J., 2013. Exploring SWOT analysis–where are we now? A review of
academic research from the last decade. Journal of strategy and management, 3(3), pp.215-251.
Hill, T. and Westbrook, R., 2015. SWOT analysis: it's time for a product recall. Long range
planning, 30(1), pp.46-52.
Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), pp.6478-6492.
Newton, P., 2014. What is the PESTLE Analysis?.
Team, F.M.E., 2013. PESTLE Analysis. Strategy Skills. Free management ebooks, p.15.