Competitive Strategy: Overview of Strategic Management Tools

Running Head: Competitive Strategy
Competitive Strategy

Competitive Strategy 1
Introduction
The aim of this paper is to provide a brief overview about the strategic management tools and
use in business process. Strategic management refers to the activity that helps an organization to
effectively manage their business functions in the external environment. These activities are
initiated in an organization with the help of strategic management tools like PESTEL, Porter five
forces, SWOT, resource based view model etc. Further the below mentioned task provides
details about the use of these tools in an organization and its importance in business as well.
Use of strategic development tools
The strategic development tools refer to those tools that are used by the business to initiate heir
strategic decision in the external environment. These tools enhance the decision making process
of an organization. Further, there are many tools, definitions and techniques that can be applied
to strategic analysis. The external market has become challenging now days due to which it has
started becoming difficult for organizations to appropriate initiate their activities and increase
sales in the market. Resulting to which, these strategic tools are used that helps the business to
gain adequate knowledge about the initiate actions accordingly (Reymen, et. al., 2015). These
strategic tools are simple as well as complex that is used by marketers to analyze the attributes
that can help a business to survive in long run. Further, the below mention paper provides the use
of three strategic tools that are PESTEL, Porter five forces and resource based view.
Starting with PESTEL analysis, it is a framework or tool used by the marketers to analyze and
monitor the macro environmental aspects that can affect the activities of an organization. This
tool calculates the external environmental feature related to the company. The full form of this
tool is Political, Economic, Social, Technological, Environmental and lastly Legal. These are all
the external environmental attributes that form a part of this analysis (Armstrong, Kotler, Harker,
and Brennan 2015). This analysis explains features of the country, place of region that can affect
the internal activities of an organization. Analyzing a deeper view of this tool it should be noted
that, political factors includes the degree of governmental intervention in the business industry of
a region. It also talks about the stability of government in that area. Economic factors includes
the per capita income and the GDP of a region that affects the buying behavior of the customers

Competitive Strategy 2
for a particular product. The economic factors also include growth rate, inflation rate, poverty
rate etc. (Goetsch, and Davis 2014).
Source: (Marketing Minefield, 2018)
Further social factors refer to those factors that talk about the culture of the society. These factors
include the belief, background, religion etc. of people that affects the activities of an organization
prevailing in that area. Technological factors talks about the presence and use of technology in
that particular area. Environmental factors relate to the attributes present in that environment that
affect the working of an organization like air pollution, sustainability activities etc. And lastly the
legal factors talks about the rates of taxes and regulations levied by government. Now this tool is
used by organization to gain knowledge of market. For instance, Walmart wants to enter in UK
but due to brexit, the country’s economic conditions are not stable nor are the governmental
control adequate. Also, the communes do not like using the products of foreign organizations.
Thus, the company will not expand in this region by gaining knowledge about its external
environment (Archer-Brown, and Kietzmann 2018).
Coming to the next tool that is Porter analysis that talks about the industry overview in brief.
This tool was framed by Michael E. Porter who explained different aspect present in the
environment that affect as organization. This tool includes five aspects that are, threat from