Competitive Strategy

Running head: COMPETITIVE STRATEGY
Competitive Strategy
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COMPETITIVE STRATEGY
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Competitive strategy refers to long term plan of a company that helps a business in
gaining the competitive advantage over the competitors within industry. It can help a
company in the creation of defensive position within industry that can help in the generation
of the superior return on the investment. It plays a significant role in the event of an industry
being competitive when the consumers are provided with the similar kinds of products. These
are essential as it helps the companies in competing within the markets that has different
alternatives for the customers. This essay discusses about the competitive strategy of
PESTEL, Porter’s Five Forces Analysis, SWOT Analysis and the generic strategies. The
essay throws light on the implication of the business strategies for the various business of
Australia.
A PESTEL analysis can be said to be a tool that helps in the identification of the
external forces that are faced by an organization. The situational analysis can help a company
in surviving within the competitive environment. The organizations that respond to the
changes within macro-environment can differentiate from competition that helps in the
creation of competitive advantage for a company. PESTEL is an acronym and the “P” stands
for the political factors that helps in determining the influence of the government on the
specific industry. The economic factors refer to the interest rates along with the raw material
cost that has impact on the performance of a company (Madsen and Walker 2015). The social
factors refer to the social environment that helps in understanding the needs and the wants of
the customers. The technological factors refers to rate of the technological innovation that can
have an effect on the market or the industry. The legal factors includes the employment
legislation along with the consumer law that has influence on the performance of a company.
Qantas airline is the name of the flagship carrier within Australia that operates flights at
domestic along with international destination (Qantas.com 2019). The government provides
support to finances of the airlines that helps in the operations of company. The airlines is

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instrumental in providing the concession in airline tickets that helps the company in making
profits. The airline has been instrumental in making the technological developments that has
helped in the growth of the company.
Porters Five Forces is indicative of a tool that helps in the analysis of competition of a
company. It is drawn from that of industrial organization economics for deriving the five
forces that helps in the determination of competitive intensity. The five forces are the threat
of the new entrants, competitive rivalry, threat of the substitutes, bargaining power of
customers and the bargaining power of the suppliers. The profitable industries can help in
yielding the high returns that can help in attracting the new firms (Thompson, Strickland and
Gamble 2015). The new entrants can decrease profitability for the other firms within
industry. The threat of the substitutes can prove to be threatening in the event of the buyers
finding the substitute products having attractive prices or having better quality. The
bargaining power of customers means that customers have power of demanding the lower
price or product of the high quality in the event of the bargaining power being strong. The
bargaining power of the suppliers has an effect on the profits of a firm as a company have to
pay more for the materials. The competitive rivalry helps in determining the profitability of
an industry. Within the competitive industry, the firms carry out competition in an aggressive
manner that results into the low profits for a firm. Wesfarmers Limited tackles threat of the
new entrants by bringing about innovation in the products and the services
(Wesfarmers.com.au 2019). The companies in the retaining industry buys the raw materials
from the numerous suppliers. The suppliers are in the dominant position and it can decrease
the margins of a company within market.
SWOT analysis can be said to be useful technique that helps in the understanding of
the strengths and the weakness of a company. It can help in the identification of the
opportunities and the threats in relation to a company. The strengths talk about the