Important strategy development tools

This article discusses important strategy development tools that organizations use to positively affect their operations in the highly competitive business world. It covers SWOT analysis, PESTLE analysis, Porter Five Force model, and Ansoff tool. Examples of companies like Nestle, Tata Motors, and Blackberry are provided to illustrate the application of these tools.

Running head: Competitive strategy
Competitive strategy

Competitive Strategy
Important strategy development tools
In the present era, it has been seen that there are different strategy development tools that are
used by the organizations. It is believed that strategy development tools positively affect the
overall operations of the company in the highly competitive business world (Verhoeven and
Johnson, 2017). The tools that are considered important are SWOT, PESTLE, PORTER FIVE
FORCE and Ansoff strategy.
SWOT ANALYSIS
It can be said that SWOT ANALYSIS is considered as a powerful tool that assist the company to
develop their strategy and also it guide the overall activities of the company. SWOT ANALYSIS
stands for Strength, weakness, threats and opportunities. Strengths and weakness are considered
as the internal factor of the company as it helps to maintain control over the change.
Opportunities and threats can be considered as the external factor as it helps in protecting the
threats that prevails in the market. SWOT analysis is considered as the effective tool and it also
involve the leaders of the company. The innovative companies consider this approach to look
towards the different factors that affect the growth of the business. By considering the SWOT
analysis approach the current situation can easily access in reference to the resources of the
company (Phadermrod, Crowder and Wills, 2019).
 SWOT ANALYSIS OF Nestle
Strength
 One of the largest company in the food sector
 More than 330000 employees
 Largest R&D
 Popular brands Maggi and Kit Kat
 Strong marketing and advertising
 Brand loyalty
Weakness
 Big global brand
2

Competitive Strategy
 There are many controversies in different countries
Opportunities
 Focus on capturing the rural markets
 Should emphasize on joint ventures and acquisitions
 Tie ups with leading hotel chains and schools
Threats
 High competition level
 High cost of the raw materials
 Failure of complex supply chains
 Economic instability
 Competitors are Unilever and Kraft foods
Pestle analysis tool
Pestle analysis is considered as the strategy developmental tools that are taken into consideration
by the companies to manage the external environment. It is the analytical tool that is used by the
businesses for planning purpose. This is also considered as a strategic framework that externally
influences the activities of the business. There are different macro environment factors that
impact the strategic planning such as new laws, tax changes, and trade barriers and also change
in demographic. By having proper understanding of the external environment, the companies can
easily maximize the opportunities and also reduce the threats in the workplace. There are 6
factors that are related to this tool: political, economic, social, technological, legal and
environmental. These factors are considered at the time of maintaining the overall activities of
the company (Moutinho and Phillips, 2018).
 Example of Tata Motors
There are different trade agreements that impact the overall activities of the company the
political stability is one of the important aspect that affect the growth of the business. It has been
observed that in Asia, flexible trade practices have helped the company to attain success and it
enhanced the demand of the cars in the market. In relation to the economic factor, it has been
3

Competitive Strategy
seen that the company the GDP of the Asia is maintained which assist the company in boosting
the demand of the services. By considering the social factor, it can be said that company focused
on the hybrid cars that has boosted the opportunities of the companies in the competitive market.
The electric cars have also generated the new avenues for the company. E-commerce is also the
right platform for the company that has promoted the trade of the company. The advancement in
the technology offered the chance to enhance the operations of the business. The state laws also
affected the activities but it has created positive image among the customers. In relation to the
environmental factor, it is examined that decline in the reserves of oil has enhanced the
opportunity for the company in context to innovation (Sell, 2017).
PORTER FIVE FORCE MODEL
It is considered as the tool that assists in understanding the competitive forces and also maintains
the strategic decision making process. This tool is related with understanding both competitive
forces and also the industry structure that is used in maintaining the high level of competition
that exist in the market (McDONALD, 2016). In relation to this tool, there are five factors that
determine the success of the company such as competitive rivalry, bargaining power suppliers
and buyers, threats of new entrants, threat f substitute products and services. So, it can be said
that these forces are considered for maintaining the overall operations of the company (Koks and
Kilika, 2016).
 Example of Nestle
There are different companies who are offering similar nature of products, so it can be stated that
new entrance ratio is high. The product substitution can also be considered as high as there are
many companies who are providing the similar types of products in the market. The companies
who are offering similar products are CADBURY. The power of buyers is also high as the
customers have the scope to avail the products from different competitors. By considering the
bargaining power of the suppliers, it can be said that it is also high as there are many buyers
present in the market. The rivalry ratio is high in the market as there are many companies who
are engaged in the same category of products (Desai, 2019).
Ansoff Tool
4

Competitive Strategy
It can be considered as the alternative of corporate growth strategies. The Ansoff matrix
showcases the potential and present capacity of the company. In this tool, there are four parts
such as market penetration, product development, market development and diversification. This
tool describes these aspects which directly affect the planning process of the company. The main
purpose of considering these tools by the companies is to focus on the growth strategies so that it
could be easy to attain the positive outcome in the highly competitive market. So, it can be said
that this is one of the important tool that highlight the growth strategies for the business
(Murdock, 2017).
Source: QUICK MBA, 2019.
 Example of Blackberry Company
The company penetrated in the market and boosted the sales of Z and Q phones among the youth
and also the corporate individuals. In relation to product development, it is seen that the
company re innovate the device design and also introduce the phones on the Android platform.
Market development has also considered in which the sales of curve series phones has been
enhanced by re launching them in new market. Diversification is done by company by launching
the Blackberry application for android (Sminia, 2017).
5

Competitive Strategy
References
Desai, C., 2019. Strategy and Strategic Management. In Management for Scientists (pp. 65-84).
Emerald Publishing Limited.
Koks, S.C. and Kilika, J.M., 2016. Towards a Theoretical Model Relating Product Development
Strategy, Market Adoption and Firm Performance: A Research Agenda. Journal of Management
and Strategy, 7(1), p.90.
McDONALD, M.A.L.C.O.L.M., 2016. Strategic marketing planning: theory and practice. In The
marketing book (pp. 108-142). Routledge.
Moutinho, L. and Phillips, P., 2018. Strategic analysis. In Contemporary Issues in Strategic
Management (pp. 46-79). Routledge.
Murdock, A., 2017. Diversification and Growth. In Private Action for Public Purpose (pp. 135-
154). Palgrave Macmillan, London.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management, 44, pp.194-203.
QUICK MBA., 2019.Ansoff Matrix. [Online]. Available at:
http://www.quickmba.com/strategy/matrix/ansoff/ [Accessed on 21 April 2019].
Sell, A., 2017. Features of strategic corporate planning. Journal of European Economy, 5(2),
pp.179-192.
Sminia, H., 2017. Marketing-inspired strategic thinking. In The Strategic Manager (pp. 30-50).
Routledge.
Verhoeven, B. and Johnson, L.W., 2017. Business model innovation portfolio strategy for
growth under product-market configurations. Journal of Business Models, 5(1), p.76.
6