Development Tools for Competitive Strategy: SWOT, Porter Five Forces, and PESTLE Analysis

Running Head: Competitive Strategy
Competitive Strategy

Competitive Strategy
Introduction
It can be analyzed that development tools play a great role in conducting the activities in
the right direction. It is seen that in this essay the focus will be given more on the development
tools like SWOT, Porter five forces and Pestle analysis. These tools help to maintain proper
balance in the overall activities of the company.
SWOT ANALYSIS FRAMEWORK
SWOT analysis is one of the development tools that provide information related to the
internal environment of the organizations. In this tool, there are four sections that represent the
concept of strength, weakness, opportunities, and threats. It is the important concept as it helps to
give actual position which the company has in the market. It is seen that the focus is given by the
managers of the organization and rectification are done so that competitive advantage can be
achieved (Bell and Rochford, 2016).
This framework represents the strength of the company which has a connection with
various factors of the marketing mix and it is also related to the market share of the company.
The strength of the company represents the brand image and the overall goodwill possessed by
the company. Next section is related to the weakness in which it has a link with the insufficient
resources available with the company. Also in many companies, there is weak distribution
channel which comes under the section of weakness (Huggins and Izushi, 2015).
The threat of the company is related to the number of competitors of the company in the
market. The last section represents opportunities that have a connection with the new product
development and also the chance available to the customers to achieve large market share (Hill,
Jones, and Schilling, 2014).
Practical Example is related to Ford in which it can be analyzed that the company has
a large market share and a good image. It is seen that goodwill of the company is one of the
major strength that helps to achieve success in the competitive environment. The weakness is
related to the high-cost structure and also low exposure in the Asian market. It is analyzed that
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Competitive Strategy
due to this weakness negative impact is seen on the growth of the company (Santos and
Laczniak, 2015).
Opportunities of the company are related with the strategic partnership and also the
company has new emission standards. Next aspect is related to a threat which the company faces
in the competitive market. Ford has to face m major threat due to the fluctuation that takes place
in the exchange rate and also the threat is from the competitors like Toyota and BMW who offer
same products to the customers. Top management or the managers analyze all the aspects so that
growth can be achieved in an effective manner (Sminia, 2017).
Porter Five Forces Framework
By focusing on this development tool it is analyzed that if the company consider this
model then it can be possible to evaluate the competitive environment of the company. In this
framework, there are five aspects of competitive rivalry which is related with the strength
possessed by the competitors and also the prices of the competitors are evaluated. Power of
supplier is also one of the factors which are related to the overall suppliers or number of
suppliers in the market. If there are large numbers of suppliers then power is reduced (Pucciarelli
and Kaplan, 2016).
Power of buyer is also considered as a factor in which proper evaluation is made of the
buyers who are availing the services of the company. The threat of substitute is one of the
aspects in which proper analysis is made of the substitute that is seen in the market and it gives
impact on the overall prices of the company. The threat of new entry is one of the factors in
which analyze is made by focusing on the new entry of the business in the market. It is analyzed
that it has a link with the overall high cost and also concerned with the entry in the market of the
new business.
Example of Nestle
It is seen that in there are many new businesses who are entering the market due to this
the new entrants is high in the market. The substitution of products is also high as there are
many competitors who are present in the market like Cadbury from which the customers can
easily substitute the products.
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