Development Tools in Strategic Management: PESTEL, SWOT, Five Forces, and Generic Strategy

This essay discusses the use of development tools in strategic management, such as PESTEL analysis, SWOT analysis, five forces analysis, and generic strategy. It explores how these tools are utilized to analyze Apple Inc.'s business strategies. The PESTEL analysis identifies external factors that impact Apple's business practices, while the five forces analysis examines the competitive forces in the marketplace. The SWOT analysis evaluates Apple's strengths, weaknesses, opportunities, and threats, and the generic strategy analysis reveals that Apple utilizes a differentiation strategy. Overall, these tools help managers make informed strategic decisions.

Institutional Affiliation(S)
Competitive Strategy
Apple Inc.
Student Name
[Date]

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Introduction
In strategic management of business firms, many development tools are
incorporated by business managers that assist them while building and forming
critical plans that can align business practices with strategic decisions. These tools
not only help in gaining competitive edge, but also aids organisations while entering
new marketplaces or implementing strategic choices for sustainable business
development (Grant, 2016). There are many development tools present in literature
and management books out of which this essay proposes to discuss PESTEL,
SWOT, five forces and generic strategy to analyse the frameworks as well as utilise
it to study Apple Inc. business strategies.
PESTEL analysis
PESTEL analysis is an effective and unpretentious development tool which
are used by strategic management for making situation analysis to identifying key
external or macro-environment factors that might potentially affect organisations.
Factors includes political, economic, social, technological, environmental and legal
environment that can create opportunities along with threats in business
environment. The primary aim behind making PESTEL analysis is to find current
position of external affairs that can affect organisations along with identifying factors
that needs to be changed within organisations. Overall, the outcome of PESTEL
analysis is to comprehend complete picture that surrounds the company (Kolios &
Read , 2013).
PESTEL analysis of Apple identifies external factors that impacts
organisation’s business practices. Political factors that affects company businesses
includes improvement in free trade policies due to strong brand recognition along
with political stability and development seen in most of the country Apple Inc. deals
in. Economic factors also remain favourable for the company due to rapid growth
seen among developed and developing nations and increase in customers buying
standards. Social factors though influence Apple products a lot for which the
company has to keep modifying its products and services to meet current demands
of its customers. However, since past few years have seen tremendous growth
among mobile users, social factors seem favourable for the company, only that
Apple has to consider more on its cost related matters and include products that can
be purchased by low income groups also. Technology and innovation have always
been top priority for Apple. The cloud computing trend along with technological
integration in every business level makes technological factor too a favourable
situation. Environmental factors that influences Apple’s business strategies include
business stability trend, labour rights trend along with efficiency in products trend
faced by the firm. Legal factors though impact Apple business due to increase seen
in privacy and telecommunication related regulations (Lombardo, 2017).

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Five forces analysis
Five forces analysis of Porter examines business competitiveness and firms
position in marketplace. As today’s organisations faces intense competition due to
highly dynamic nature of businesses, five forces analysis tool helps managers in
comprehending forces that can impact business practices in favourable or
unfavourable way. The forces analysed under five forces tool include threats from
substitute and new entrants, bargaining power of suppliers and customers and lastly,
rivalry within competing industry. This tool provides businesses with in-depth
knowledge about forces that drives competition within firms and thus are utilised by
almost every contemporary organisation’s extensively (Indiatsy, et al., 2014).
Five forces analysis of Apple reveals that the firm faces a low force
concerning threats from new entrants. Since mobile and computer market requires
exclusiveness in companies as seen in Apple Inc along with huge amount of capital
investment, it becomes difficult for new companies to enter in such a dynamic
industry. Bargaining power of buyers also shows weak to some extent for Apple
since the company deals with latest designs and technology that attracts customers
to buy Apple products more than often. However, threats from supplier can somehow
prove a strong force for the company since Apple has to depend largely upon
suppliers which provides the company with high quality raw materials and finished
products. Since fixed telephone have been seen reducing from marketplace, there is
a good scope for voice-over internet products to flourish and no other substitute as
compared to mobile has been seen gaining consumers interest in past few years
which makes threat of substitutes a weak force for Apple (Dudovskiy, 2018). Threats
from rival companies though has a strong force on Apple due to availability of many
competitive brands dealing in computer and mobile industry like Samsung, Lenovo
and Nokia (Jurevicius, 2017).
SWOT analysis
SWOT analysis is also known as SWOT matrix and is considered by
organisations while evaluating strengths, weaknesses, threats and opportunities that
are involved in businesses or within any given situation that requires undertaking
strategic decisions. Theoretically, strengths act as internal attributes of firms and
proves useful for achieving business objectives whereas weaknesses are those
factors that are harmful for organisations and create obstructions in business course.
Opportunities are external factors that can help organisations in achieving strong
position and lastly, threats are the harmful forces which are predicted by managers
that can potentially hamper firm’s performance in future (Arslandere & Ocal, 2016).
The strength analysis of Apple shows those aspects of the company that
strengthen its business internal and external environment. Apple’s strong brand

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image adds to its biggest strength due to rapid adaptation of new and innovative
products. Companies higher profit margin due to exclusive growth and development
strategy also adds to its strength that allow it to enter fresh markets easily.
Weakness can be seen in its distribution network related strategy as the company
follows very strict guidelines for selecting its suppliers and sellers. Higher costs of
products also show weakness in the company for which most of the competitors are
able to attract customers who prefer buying cost effective products. Since Apple is a
company with global recognition, various opportunities lay in front of it especially
enhanced scope for expanding its distribution networks along with developing new
products line. Threat analysis of Apple identifies aggressive competition in mobile
and computer manufacturing industry along with various imitation and legal laws that
may disrupt company affairs in future (Smithson, 2019).
Generic Strategy
Porter suggested generic strategies that can be adopted by businesses to
gain competitive advantage. Framework created by Porter is considered the most
effective in which cost leadership strategy implies upon competitive advantage
gaining through low cot of product or services. The low cost can be the result of
removing costs from operational levels like supply chain, wastages, production, etc.
Differentiation strategy, on the other hand involves creation of products in
differentiated manner for segmenting markets differently. This means, to introduce
variety of products or services and promote differently within every business function
level, thereby allowing companies to desensitize the prices to be different than
competitors or bringing change in standard prices (Tanwar, 2013).
The generic strategy analysis of Apple reveals that the firm utilises
differentiation strategy that helps the company provide services or products in a
unique or different style as compared to its competitors. In fact, Apple’s
differentiation strategy along with its problem-solving management authorise few
specific software applications rather than adopting existing ones. However, this
monopolistic strategy has grown concern in internal management regarding law suits
for which they keep on striving to offer best of the software that are safe and reliable.
Since cost leadership strategies are rarely considered by the company, it needs to
develop and innovate new products that can keep its existing customer stand against
competitor brands. Additionally, the company can ensure entering into new markets
by expanding its product portfolio other than mobile and computer related products
like its other competitor Samsung does (Seidel, 2018).

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References
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Grant, R. M., 2016. Contemporary Strategy Analysis. 9 ed. UK: Wiley.
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Environmental (PESTLE) Approach for Risk Identification of the Tidal Industry in the
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[Online]
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[Accessed 27 04 2019].
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Available at: http://panmore.com/apple-inc-swot-analysis-recommendations
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