The key strategy development tools

Running head: KEY STRATEGY DEVELOPMENT TOOLS
KEY STRATEGY DEVELOPMENT TOOLS
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KEY STRATEGY DEVELOPMENT TOOLS
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Introduction
The fundamental step involving the process of creation and administration of a
business is known as strategy development or strategy planning. Strategic developmental plan
involves the step of establishing specific aims and objectives in the form of a game plan for
the allotted team to perform (Ansoff et al. 2018). Strategy development process reflects the
ability of adapting to changing market dynamics (Liedtka and Kaplan 2019). The concept of
strategic management can be understood by an assembly of existent processes and activities,
which are utilized by organizations for the purpose of systematically aligning and
coordinating the resources and strategy with vision and mission of organization. The
procedures involved in strategic management transforms static plan that contributes in
decision making process. The purpose of the paper is to understand the concept and
application of few key strategic management development tools in context of business. The
paper will present a discussion regarding each of the tool with the association of practical
examples. The paper will be concluded by depicting a summary regarding the applications of
the tools in business processes.
Discussion
The concept of strategic management development includes tools for facilitating the
strategy of planning and execution. The strategic management development tools that will be
discussed in this paper are PESTEL framework, Profit model and SWOT Analysis.
PESTLE Analysis:
The framework depicts the macro-environmental factors that are utilized in for
scanning of external environmental components in strategic management. The factors or
aspects that are considered or analysed for understanding the external environment for an
organization are Political, Economic, Socio-cultural, Technological, Legal and
Environmental. The framework of PESTLE analysis is a constituent of external analysis

KEY STRATEGY DEVELOPMENT TOOLS
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while conducting functions like, strategic analysis, marketing research and market awareness
before establishing a business unit. The PESTLE framework is used for the purpose of
developing an understanding regarding decline or growth of the market, directions for
operational activity and position of the business in context of the external business
environment, under which the business is operating.
The Political factors depicts the intervention of government and political activities in
the business processes or limitation of specific organization. The aspects like, labour law, tax
policies, tariffs, environmental law, stability in political settings and trade restrictions are
included in consideration for political factors. The impact and intervention of government
and political activities on the business functions of an organization is assessed through the
framework of PESTLE. The economic factors like, exchange rates, economic growth, interest
rates and inflation rates are included for assessment of the impact of economic scenario of a
country on the business decisions of an organization (Alava and Mu 2018). The aspects
included in economic factors are exchange rates, interest rates, economic growth and inflation
rate. The business decision making and operational activities are majorly dependent on the
assessment of economic factors (Thompson, Strickland and Gamble 2015). An example for
the understanding of economic impact on business processes can be, the impact of interest
rates on cost of capital of company. Thus, the expansion and growth potentiality of
businesses can be understood through the understanding of the impact. The exchange rates of
a country or region can also affect costs related to imported goods, costs related to supply
chain activities and the exporting costs. The social factors involves aspects like age
distribution, safety and security, career attitude, population growth rate health consciousness
and cultural aspects (Phillips and Moutinho 2018). The socio-cultural factors of a country
reflects the potentiality to exert impact on the demand of company’s services and products.
For instance, ageing population group in a country may lead to less-willingness for working
amongst the workforce, which can result in the increasing cost of workforce. Moreover, the