Journal of International Social Research

Running head: COMPETITIVE STRATEGY
COMPETITIVE STRATEGY
Student’s Name
University Name
Author note

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COMPETITIVE STRATEGY
Introduction
Strategic planning can be defined as the direction or decision taken by the managers or
the leaders of the organization on allocation of resources including capital and people. There are
various tools and techniques through which the business organizations can use for strategic
planning and decision making. Proper strategic planning includes the future course of actions
that are to be taken by the organizations for beating high level of competition in the market.
Business strategic development involves appropriate analysis of the external and internal
business environment which can impact the smooth running of the business organization directly
or indirectly (Jarzabkowski and Kaplan 2015). Strategy development involves identifying the
strengths and weakness of the internal business environment and identifying the threats and
opportunity of the external business environment. The purpose of this essay is to discuss on the
strategy development tools including PESTLE, Five Force Analysis and SWOT analysis. It also
discusses the ways in which they are used in the business.
Discussion
Developing a business strategic is a slow process, and involves number of stages. These
stages enable the business organization to define the measurable outcomes and work accordingly
to attain the goals and objectives of the organization (Team 2013). It lays down day to day
planning about the activities of the organization and determines the progress of the organization.
PESTLE Analysis
PESTLE is an acronym for Political, Economic, Social, Technological, Environment and
Legal. PESTLE analysis is used by different business organization to take business decisions as
per the changes and situations of the internal and external business environment. This framework

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COMPETITIVE STRATEGY
is used to analyze the macro environment factors which directly or indirectly affect the
performance of the organization (Team 2013).
Political factors: Various political factors such as corruption, legal laws and framework, trade
regulations, taxes and tariffs, pricing regulations, mandatory benefits for the employees and
wage regulations can impact the long term profitability of company. For example, Wesfarmers
operating in food retailing industry is exposed to various political risks, hence it needs to analyze
the political environment such as the levels of government regulation in food retailing sector.
Economic Factor: The external environment factors such as the interest rates, savings rate,
foreign exchange rate, economic cycle, in an economy determines the aggregate level of demand
and investment prevailing in the economy (Ho 2014). For example, Wesfarmers need to analyze
the level of government intervention in the economy related to the food retail sector. It needs to
determine the efficiency of the financial market to determine the capital required in the local
market.
Social market: The culture, habits and attitudes of the society in which the organization
operates impact the culture of the company. The class structure, hierarchy, culture, skills level of
the population plays an important role in understanding the consumer behavior in a given market
(Ho 2014). Hence, Wesfarmers should analyze the consumer behavior and attitude for designing
the marketing message.
Technological factors: In today’s business scenario technology and industry is transforming and
advancing a fast rate. Therefore, the business organizations need to analyze the technological
factor to pace up with the changes in the business environment. For example, the car industry is
advancing towards automation powered by technology companies like Google (Ho 2014).