Importance of Competitive Strategy and Analysis Tools for Business Development

This article discusses the importance of competitive strategy and analysis tools like SWOT, PESTEL, and Five Forces for business development. It explains how these tools help in identifying the competitive environment and exploring marketing, operations, and manufacturing areas. The article also provides a brief overview of each tool and its benefits. References are included for further reading.

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Table of Contents
Competitive strategy.............................................................................................................................2
SWOT Analysis...................................................................................................................................2
PESTEL Analysis..................................................................................................................................2
Five Forces Analysis...........................................................................................................................2
References.............................................................................................................................................3

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Competitive strategy
There are various management tools needed for business development. These tools
allow business to work smoothly by avoiding all the problems. Some of the tools available
are SWOT, PESTEL, 5F, RBV, PROFIT and I/O. Thus discussing the importance of these
tools for development of business. These strategies help in knowing the competitive
environment which helps in identifying the competitors market. It helps in exploring and
improving marketing, operations and manufacturing area (Thokala, et. al, 2016). These tools
help in.
 Preparing the plan for identifying the requirements.
 Scanning the environmental conditions by considering internal as well as
external conditions of the business.
 Applying techniques to analyse the present state of business and taking to
better future.
SWOT Analysis
It firstly maps the position of business in the market by analysing the strengths,
weaknesses, opportunities and threats associated with the business. It analysis the business on
terms of these four factors, focuses on maximizing the strengths and opportunities and
minimizing the threats and weaknesses (Rauch, et. al, 2015). It helps the business by
providing a clear view that provides a way to meet the objectives designed. It showcases the
ways in which weakness could be revised. The growth plans are drafted according to the
strengths and weaknesses so that market opportunity can be known. The threats which are
discovered are studied and possible changes are made in the policy or strategies by revising it

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from the ground level. It also helps in creating weakness matching and converting it
accordingly. This tool plays a significant role as it provides motivation in the business plan
by determining the success (Phadermrod, Crowder and Wills, 2016). It helps in knowing the
traits and qualities that the business possesses to attract more customers and improve the
financial resource. It assures to maintain the productivity of business by identifying the
weakness and working on it. It helps to know what competitors are doing in the market, what
is the reason of their success. Apart from that it is a cost effective approach and has wide
range of usability, helps in promoting discussions and provides visual overview of business
so that integration and synthesis could be done. It delivers motivation to upgrade the business
plan by focusing on skills, capabilities, abilities and capacities. Thus to achieve business
goals opportunities are capitalised and weakness is addressed.
PESTEL Analysis
This is also a tool that is used by businesses for development as it evaluates potential,
economic, social, technological surroundings of a business. It helps in exploring business to
good level by understanding the foreign market. It is very useful as it tracks the laws related
to business and the growth of the company in terms of economy (Derbyshire and Wright,
2017). It also helps in understanding the target market by knowing the demographic factors
like the population growth or the age distribution. It looks for the latest technologies and
reveals better opportunities and resolves the failed cases. This tool is very easy to understand
and helps the company for preparing the plans to remove the possible threats. It provides
deeper understanding of business by raising the awareness. It is basically used for product
specification, developing marketing plans and improving customer relations. This helps in
reducing the impact of threats on an organisation and encourages the employees for
developing better strategies. It exploits new opportunities by identifying the current need in
the market and helps the business to enter into the market globally. It helps an organisation in

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exploiting new options and monitoring developments in the environment so that sustainable
development evolves over time (Madsen and Walker, 2015).
Five Forces Analysis
It helps in knowing the position of business in the market. Thus to improve the
position in the market it focuses on suppliers, customers, issues in the market place, threats
related to the competitors in the market. It determines the scope of by understanding the
current state and defining a path to move forward by establishing a baseline (Lee, Yoo and
Kim, 2016). This tool helps in analysing the business and future prioritizing the opportunities
on the behalf of business value. It focuses on identifying the steps to increase the positive
changes in the market place. It creates plan to attract more customers and remove the barriers.
It enables the suppliers to improve the uniqueness of the product, and also increase the buyers
by gaining a good position in the market. Five forces help an organisation to know the factors
that are affecting profitability of the competitor industry, so that decisions could be taken
related to specific industry; whether to raise the capability of specific industry by deploying
competitive strategies (Gabrielsson, Seppälä and Gabrielsson, 2016).
Thus it can be concluded for betterment of business a development tool is needed as
they play an important role in providing the information about the market so that an effective
business process can be developed. It analysis the complete external environment along with

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the internal capabilities implemented. As every business has a competitor in the market to
defeat them strategy is needed (Acquaah, Amoako-Gyampah and Jayaram, 2016). It
includes the acquisition of the current outcomes and coordination to serve better. Any
development tool like SWOT, PESTEL or 5F can be used for defining the business purpose
and describing what actually need to be achieved, by outlining a plan to achieve the ultimate
goals and beat the competitor. It focuses on the efforts that need to be taken by redefining the
long term goals and objective. These tools contribute in bringing more profit for an
organisation by gaining more market share. It deals with customer satisfaction to be more
successful. It can be stated that strategic analysis are essential for every business and is one
of the most elementary and valuable tool for business planning.

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References
Acquaah, M., Amoako-Gyampah, K. and Jayaram, J., 2016. human resource Management
and Market Orientation Strategies in Family and Non-family Firms in Ghana: how Do they
relate to Competitive Strategy and Firm performance?. In Family Businesses in Sub-Saharan
Africa (pp. 123-153). Palgrave Macmillan, New York.
Derbyshire, J. and Wright, G., 2017. Augmenting the intuitive logics scenario planning
method for a more comprehensive analysis of causation. International Journal of
Forecasting, 33(1), pp.254-266.
Gabrielsson, M., Seppälä, T. and Gabrielsson, P., 2016. Realizing a hybrid competitive
strategy and achieving superior financial performance while internationalizing in the high-
technology market. Industrial Marketing Management, 54, pp.141-153.
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.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2016. Importance-performance analysis
based SWOT analysis. International Journal of Information Management.
Rauch, P., Wolfsmayr, U.J., Borz, S.A., Triplat, M., Krajnc, N., Kolck, M., Oberwimmer, R.,
Ketikidis, C., Vasiljevic, A., Stauder, M. and Mühlberg, C., 2015. SWOT analysis and
strategy development for forest fuel supply chains in South East Europe. Forest Policy and
Economics, 61, pp.87-94.
Thokala, P., Devlin, N., Marsh, K., Baltussen, R., Boysen, M., Kalo, Z., Longrenn, T.,
Mussen, F., Peacock, S., Watkins, J. and Ijzerman, M., 2016. Multiple criteria decision

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analysis for health care decision making—an introduction: report 1 of the ISPOR MCDA
Emerging Good Practices Task Force. Value in health, 19(1), pp.1-13.