Understanding Competitive Strategy: SWOT, Ansoff, PESTLE and Porter’s Generic Strategies

This paper discusses the four fundamental strategic analysis tools - SWOT, Ansoff, PESTLE and Porter’s Generic Strategies - used by organizations to assess their internal and external environment for business operations. Practical examples are provided for each tool.

Running head: COMPETITIVE STRATEGY
COMPETITIVE STRATEGY
Name of the Student
Name of the University
Author Note:

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1. Introduction
Strategy development tools are considered to be very useful tools for understanding the
organisational environment and to think in more strategic manner regarding the business. There
are different strategy development tools that are used by several different contemporary
companies to assess their market environment. This is due to the fact that in this present
scenarios, there are a wide range of factors that affects the business process of the organisation
and they are essentially be considered by the them in making strategic planning. There are
different tools for analysing different business environments. Some of the very common and the
most used ones are SWOT, Ansoff, PESTLE and Generic Strategies. This paper is going to
elaborate on presenting a comprehensive discussion of these four strategy development tools and
how they are used in the businesses. It would provide practical life examples for the same.
2. Discussion
2.1. SWOT
SWOT is one among the most commonly used tools used by the organizations to assess
their internal and external environments. It stands for Strengths, Weaknesses (Internal),
Opportunities and Threats (External). These four elements helps the businesses in determining
their positive and negative aspects that are present within the companies (strengths and
weaknesses) as well as could have an impact on the company (opportunities and threats) (Yan,
Xia & Bao, 2015). One of the best examples of companies that makes use of SWOT analysis tool
is that of Woolworths. Woolworths have several strengths that makes it worldwide popular
supermarket chain. It has a huge market coverage in Australian region and it is regarded to be
one of its major strengths. However, its weakness include that it is known to be partial to the

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upper class people or the higher income demographic segments as it given them much attention
and better services and products. Furthermore, opportunities is regarded to be the positive
potential factors for Woolworths in Australia. One of its significant opportunities is that entering
into the developing nations could increase its market revenue. Lastly, the last element of the
SWOT analysis tool is that of Threat. In terms of Woolworths, the potential negative factor that
could threaten its business or is acting as a barrier to its business operation is that of the rise of
the economic recession.
2.2. Ansoff
Ansoff matrix is a strategy development tool which provides a clear framework for helping the
business managers to devise strategies for the future growth and development of the business
(McDonald, 2016). It has a total of two different axes- one for markets and the other for
products. The example of Nestle shall be used for explaining this tool. The first strategy in the
Ansoff matrix is that of market penetration. Nestle seeks to earn the confidence of its consumers
and to follow and anticipate their trends, by creating and responding to the demand for its
products. The second strategy is of product development. For example, Nestle's first product was
milk pack. It further developed considering the needs and preferences of its customers. The third
strategy is of market development. For instance Nestle had developed its market by gaining the
trust of its customers by providing them good quality and pure products. The last strategy is of
diversification. It refers to selling of new products to new markets. Nestle has introduced pet care
in Pakistan.
2.3. PESTLE

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PESTLE stands for Political, Economic, Social, Technological, Legal and Environmental
factors that could impact the business operation of the organizations. These are the six
fundamental external factors that affect the businesses worldwide. It refers to the technique that
is used for understanding the external influences on the business. According to Rastogi & Trivedi
(2016), it is a key tool for the business planning. For example, Coles is one of the largest
Australian supermarkets. However, it is also affected by different external factors. Firstly, the
political factor like the different government regulations that are against the duopolistic nature of
the market is affecting the operation of Coles in present era. Moreover, the economic
environment of it is also quite unfavourable now. The bargaining power of the suppliers have
been reduced significantly and with the same, there is low spending on the parts of the Australian
customers now a days. Thirdly, the determination of the Social factors have identified that there
are different tastes and needs of customers. Also, different customers have different preferences.
Hence, it is very important for Coles to change its product strategy as per the market trend.
Fourthly, in terms of technological situation, advancement in technology in recent years have
increased the use of internet among the customers and this in turn have influenced the business
profile of Coles to great terms. Fifthly, the legal environment for Coles is also very challenging.
This determinant helps in identifying the influence of the legal regulations for the businesses. For
example, ACCC is against Coles and this is greatly influencing its business in the Australian
region in recent year. Lastly, the environmental factors helps in determining the influence of the
eco-friendly and green standards in the business operation. Coles makes use of sustainable
products in its business.
2.4. Porter’s Generic Strategies

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The Porter’s generic strategies determines how an organisation pursues the competitive
advantage over its chosen market scope. In other words, it can be said that these generic
strategies is used for determining the direction or the strategy of the organisation (Wicker,
Soebbing, Feiler & Breuer, 2015). There are a total of three major generic strategies used for
gaining competitive advantage and they are cost leadership, market focus and differentiation. For
this case, the example of Samsung as an organisation is used. It is to note that cost leadership
involves being the leader in context to cost in your market. It is all about decreasing the
organisational cost for delivering the services and the products. It is to mention that Samsung
follows cost leadership strategy for its huge number of products and this helps it in penetrating in
the business environment as well as to cover large area. Secondly, the market focus is the
strategy that is used for targeting the niche business market as well as for attracting them by
offering services and products as per their choices and preferences. Samsung does not follow this
strategy as it has extended target market. Thirdly, the differentiation strategy is about the process
of initiating the different features for remaining unique from the rest of the potential competitors
in the market. Samsung uses this strategy as it proven that Samsung mobiles are way different
from the rest other mobiles and smart phones.
3. Conclusion
Hence, from the above analysis it is to state that SWOT, PESTLE, Ansoff and Generic
Strategies are four of the most fundamental strategic analysis tools to assess the internal and
external environment for the organizations to operate its business in the contemporary
environment. These tools are fundamental to ensure that there is consistency as well as a proper
level of rigor is applied to the business market analysis. Furthermore, it is also to conclude from

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the above analysis that these tools has different set of utilities for the organizations and hence,
none is inferior to other to consider while business analysis.
References
McDONALD, M. A. L. C. O. L. M. (2016). Strategic marketing planning: theory and practice.
In The marketing book (pp. 108-142).
Rastogi, N. I. T. A. N. K., & Trivedi, M. K. (2016). PESTLE technique–a tool to identify
external risks in construction projects. International Research Journal of Engineering
and Technology (IRJET), 3(1), 384-388.
Wicker, P., Soebbing, B. P., Feiler, S., & Breuer, C. (2015). The effect of Porter’s generic
strategies on organisational problems of non-profit sports clubs. European Journal for
Sport and Society, 12(3), 281-307.
Yan, J., Xia, F., & Bao, H. X. (2015). Strategic planning framework for land consolidation in
China: a top-level design based on SWOT analysis. Habitat International, 48, 46-54..
Strategic planning framework for land consolidation in China: a top-level design based
on SWOT analysis. Habitat International, 48, 46-54.

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