Competitive Strategy: Porter Five Force Analysis and Pestle Analysis

Running head: Competitive Strategy
Competitive Strategy

Competitive Strategy
Introduction
In this paper, the discussion will be made on development tools. The development tools that will
be discussed in this paper are Porter five force analysis and Pestle analysis. It has been seen that
these tools help the company to identify the environment so that it can be simple to accomplish
goals and objectives in a proper manner. To achieve competitive advantage the company has to
focus on the development tools so that the operations can take place in a smooth manner. It is
essential for the company to consider these tools as it helps to complete the activities in the right
direction. There are two companies which are selected for the paper first is Estia which is Aged
Care Company and second is Abbott which is a pharmaceutical company. The proper discussion
will be made by considering these two companies for this paper.
It is important for the company to focus on these development tools as through this actual
position of the company can be evaluated. By focusing on these development tools companies
will be able to analyze the actual position which can help to compete with the other competitors
prevailing in the market.
Estia (Aged Care Company)
Porter Five force Model
This is one of the development tools which are taken into consideration so that proper focus can
be given to competitive forces so that growth and profits can be earned. This tool gives
emphasis on the overall activities of the company.
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Competitive Strategy
(Source: Porter five force analysis, 2018).
Threats of new entrants
There are many new companies who are entering the market by offering the same services. It can
be analyzed that when new companies enter into the market then the negative impact is seen on
growth. The pressure which company has to face is related to low price strategy. The level of
threat is high in this sector (Grant, 2016).
Bargaining power of buyers
Bargaining power of buyer is high in this sector as they get attracted towards the best and fewer
prices offered by the company. It can be seen that if the company is giving effective services
then it can be simple to attain a large market share and also through this goodwill can be
maintained. The bargaining power of buyers can be managed if the proper customer base is
maintained.
Bargaining power of suppliers
The companies who are in the healthcare sector can easily avail raw materials from their
suppliers and also the suppliers who are powerful in this sector can focus on the power of
negotiation. It is essential to create dedicated suppliers whose profits depend on the company.
The example can be taken of Wal Mart and Nike who have less bargaining power.
Threat of substitutes
The substitution rate is high in this sector as there are companies who are offering the same type
of services in the marker. The threat can be reduced by emphasizing on a service-oriented firm.
The company emphasizes on the need of the customers rather than focusing on what the
customer wants to purchase. The switching cost of consumers can assist in managing the threat
of substitutes (Rothaermel, 2016).
Rivalry among the competitors
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