Key strategy development tools

Key strategy development tools
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Table of Contents
Introduction.................................................................................................................................2
PESTEL analysis........................................................................................................................2
SWOT analysis...........................................................................................................................4
Resource-based view analysis...................................................................................................6
Ansoff Matrix...............................................................................................................................8
Conclusion................................................................................................................................10
References................................................................................................................................11

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Introduction
The fundamental objective of the paper is to determine various primary strategic development
tools that are used by every business entities. The four critical strategic tools are PESTEL,
SWOT, Resource-based view, and Ansoff matrix. The tools are advantageous for all type of
companies for identifying various factors.
PESTEL analysis
The PESTEL analysis is a tool used for identifying the market as well as environmental
aspects. The analysis consists of several factors such as political, economic, social,
technological, environmental and legal. It is beneficial for businesses in identifying the
essential aspects that can affect the business.
For example, Tesco is a multinational company located in the UK that deals mainly with the
selling of food as well as non-food products. It applied the PESTEL analysis in its business for
analyzing the external factors. The pestle analysis of Tesco is provided below:
Political factors: Tesco operates in 12 countries, hence highly influenced by global political
factors. The factors involve acts of legislation, taxation rates, and political instability. Tesco
can be affected by import duty on products as it imports inventory from China and East Asia
(Pan, Chen, and Zhan, 2018).
Economic factors: These factors are the main concern for Tesco as it likely to influence
profit, demand, and costs. The cost of labor is a vital economic factor that affects the market
of Tesco. Tesco requires to be aware of the other policies that can affect the financial
condition.
Social factors: The trend of shopping by consumers are changing over time. They are likely
to prefer one-stop shopping. Tesco depends on the customers of the UK. Hence it requires to
consider the changing behavior as well as demand.
Technological factors: Technological developments brought several new opportunities for
Tesco such as introducing online shopping with home delivery facilities. It helps Tesco to
regain the trust of consumers.
Environmental factors: The government put pressure on companies to address
environmental problems. Tesco promised to reduce its carbon footprint by 50% and use
renewable sources of energy (Kauškale and Geipele, 2017).
Legal factors: The government legislation directly affects the performance of Tesco such as
Food Retailing Commission suggests a code of practice. Tesco conducts its operations as
per the legislation.

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Figure: PESTEL analysis
(Source: Kauškale and Geipele, 2017)