Strategic Models for Management: PESTEL Analysis, Porter's Five Forces, SWOT Analysis, Ansoff Matrix

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author Note

1MANAGEMENT
Strategic model 1: PESTEL analysis
A PESTEL Analysis is defined as a strategic marketing tool that is used by thr
marketers in order to analyse as well as monitor the external marketing environment
also known as macro environmental factors that has the potential to impose vital impact
on the performance of the company. The mentioned strategic tool is chiefly used by
marketers while starting a new business or entering a foreign market. The PESTEL
strategic toll is used in collaboration with porter’s five forces as well as SWOT analysis
tool for providing a clear understanding of the situation associated with both internal and
external environment of a business. The term “PESTEL” refers to 6 macro
environmental factors that impose high impact on the business performance, namely,
political factors, economic factors, socio-cultural factors, technological factors,
environmental factors and legal factors. The political factors assesses to what degree
the government of the country where the business will be established or is already
established intervenes in the economy or a certain industry (Pan, Chen and Zhan
2018). When it comes to the economic factors, it determines aspects like the economic
growth, exchange rate, interest an inflation rates, unemployment rates and disposable
income of the country. The social factors determine the demographic characteristics,
customs, values and norms of the population within which the company operates or will
operate (Kauškale and Geipele 2017). The technological factors pertain to the degree to
which the country is technologically developed and how that may affect the industry
operations, favourably or unfavourably. When it comes to the environmental factors, it
depicts the degree to which the population of the country is aware of environmental
degradation. Legal factors includes health and safety, advertising standards, consumer

2MANAGEMENT
rights and laws , equal opportunities and product safety related regulation that has high
potential to impose impact on the business.
Strategic Model 2: Porter’ five Forces
Porter’s five forces is defined as the strategic model which identifies as well as
analyses the five major competitive forces that shapes an industry along with helping
the same to determine its own strengths and weaknesses. This strategic model is
chiefly used by the marketers for identifying the structure of the industry for determining
corporate strategy. The porters five forces model can be applied in any segment of an
economy in order to understand its profitability as well as attractiveness (Gans and
Ryall 2017). The mentioned strategic model has been named after its inventor Michael
E. Porter. The chief five forces of the mentioned model includes threat of new
entrances, bargaining power of the consumers, revelry within the competitors, threat of
substitutes and bargaining power of the suppliers. The stronger the competitive forces
in an industry, the less profitable the industry is. The power of an organization gets
affected by the force of new entrance into the market. Thus profitable industry is
considered to be an industry that possess high barrier to new entrances.
When it comes to power of the suppliers, an industry is considered to be
profitable in are the power of the supplier is low. This force addresses the degree to
which suppliers can drive up the investment costs of a company. When it comes to
power of the consumers, this factor specifically deals with the switching ability that the
consumers possess to drive the price of the commodities down (Strand and Freeman
2015). While smaller and powerful client base indicates high power of the consumers,