Global Strategy: Analysis of Evaluation Tools

This study analyzes the best tools for analyzing global market situations and forming strategies to tackle challenges. The effectiveness of Pestle analysis, Porter’s five forces, SWOT analysis, business model canvas, and other tools are evaluated. The furniture industry in China, USA, and Europe is considered. The usefulness of Porter’s five forces and Pestel in forming essential business strategies is discussed.

Running head: GLOBAL STRATEGY: ANALYIS OF EVALUATION TOOLS
GLOBAL STRATEGY: ANALYIS OF EVALUATION TOOLS
Name of the Student
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Author Note

1GLOBAL STRATEGY: ANALYIS OF EVALUATION TOOLS
Introduction
The study is focused towards understanding the best tools that can be utilized for
analyzing the global market situations. The effectiveness with which these tools can be used to
subsequently form strategies to tackle the global market challenges are also analyzed through the
study. Three large global markets have been considered as the context of the study. The global
countries or regions that are considered are USA, China and Europe. The industry that has been
considered is household furniture industry. The political, environmental, technological, socio-
cultural and environmental aspects that affect the market of these countries and regions are
different. The tools that will be most effective towards analyzing the factors are required to be
analyzed.
Effective tools for the situation
The best tools that can be used in this situation should be concerned with the effective
evaluation of external environment concerning the organization. Moreover, as it is important to
also evaluate the internal areas internal environment analysis tools will also be necessary. Some
of the tools that can be used are Pestle analysis, Porter’s five forces, SWOT analysis, business
model canvas and other important tools. Pestle analysis can help to measure the frequency of the
political, economic, socio-cultural, technological, environmental and legal factors that can affect
the environments of these global economies. Porter’s five forces help to analyze the pressures
that can be created with regards to customers, suppliers, new entrants, competitors and substitute
products. SWOT analysis analyzes the strength, weakness, opportunity and threats that can affect
a given organization or an industry (Sarooghi, Libaers & Burkemper, 2015). Business model
canvas is used to form strategies for organization considering nine essential aspects of business.

2GLOBAL STRATEGY: ANALYIS OF EVALUATION TOOLS
Summary of the tools
Two of the most important tools that can be used for forming global strategies are
Porter’s Five Forces tool and Pestle analysis tools. These tools are effective in making a
comprehensive analysis of the environment of any given region. PESTEL analysis tool is used to
measure the kind of effect essential external factors can have over a given organization or a
market. The factors that are considered are political, environmental, socio-cultural,
technological, economic and legal. Hence, these are the areas that are examined through this
tools. Porter’s five forces tool is used to evaluate the forces of bargaining power of the
customers, bargaining power of the suppliers, threat of new entrants, existing competitors and
substitute products (Moutinho & Phillips, 2018). It is an effect way to measure the forces that
tend to have very high effect on the business operations of any organization. Porter’s five forces
help to bring out the factors that can greatly affect the operations of any given enterprise.
Effectiveness of the tools towards market analysis
The markets that are being considered in this research are China, USA and Europe. The
factors that tend to affect the markets of these regions can be effectively measured with the help
of the above mentioned tools. It is important that the markets are essentially analyzed in order to
gain information that can help to form effective strategies. The furniture market being considered
is different for the different markets. Hence, the furniture industry can be assesses in these
countries with regards to a wide number of factors. This will make the evaluation much easier.
Porter’s five forces will help in improving the understanding the position of the furniture market.
As an example China is politically stricter as compared to the USA and Europe, the socio-
cultural factors of Europe make wooden furniture demand more in the region. The two tools will

3GLOBAL STRATEGY: ANALYIS OF EVALUATION TOOLS
be the best in generating significant understanding of the various factors (Mathooko & Ogutu
2015).
Usage of the tools
The Pestle analysis tool will be used to form the plan. Firstly the political, economic,
social, technological, environmental factors will be evaluated considering all the markets (Pan,
Chen & Zhan, 2018). Secondly, the factors that affect the environment of the organization most
will be selected. These factors will then be focused towards forming the essential strategies that
can guide organizations with regards to the market conditions of these markets. The porters five
forces can be used to understand the power that each of the forces exert on the organizations
working within the markets of these areas. Hence, customers, suppliers, new entrants,
competitors and substitute products will be analyzed in order to understand which factors tend to
affect the countries more. They can subsequently be utilized to form effective strategies.
Conclusion
It can be said that the usefulness of the tools are dependent on the number of factors that
they can effectively bring out while analyzing the potential of the market at the same time. As
discussed, Porter’s five forces and Pestel can be effective in forming essential business
strategies.

4GLOBAL STRATEGY: ANALYIS OF EVALUATION TOOLS
References
Mathooko, F. M., & Ogutu, M. (2015). Porter’s five competitive forces framework and other
factors that influence the choice of response strategies adopted by public universities in
Kenya. International Journal of Educational Management, 29(3), 334-354.
Moutinho, L., & Phillips, P. (2018). Strategic analysis. In Contemporary Issues in Strategic
Management (pp. 46-79). Routledge.
Pan, W., Chen, L., & Zhan, W. (2018). PESTEL Analysis of Construction Productivity
Enhancement Strategies: A Case Study of Three Economies. Journal of Management in
Engineering, 35(1), 05018013.
Sarooghi, H., Libaers, D., & Burkemper, A. (2015). Examining the relationship between
creativity and innovation: A meta-analysis of organizational, cultural, and environmental
factors. Journal of business venturing, 30(5), 714-731.