Analysis of Strategic Tools in Management

The essay provides an analysis of strategic tools such as SWOT, PESTEL, Ansoff Matrix, and Porter's Five Forces in management. It discusses the importance of these tools in providing direction and outlining measurable goals. The essay also includes examples of the application of these tools in the context of Amazon.

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

1
MANAGEMENT
Introduction
The essay helps in the overall analysis of the various strategic tools such as SWOT,
PESTEL, Ansoff Matrix and Porter’s Five Forces Analysis which plays a major role as it
provides sense of direction along with outlining the measurable goals.
SWOT Analysis
The SWOT Analysis helps in providing information which is helpful in assisting the
resources of the organization in the competitive environment wherein the company operates.
It is an instrumental in the formulation along with selection of the strategy (Patrutiu-Baltes
2016). The respective framework is considered to be successful for the process of decision-
making as it helps the entity to uncover the different opportunities for success.
Strengths- It includes internal attributes along with resources which will be helpful
for successful outcome
Weaknesses- The different internal attributes as well as resources which will work
against the successful outcome
Opportunities- The different external aspects wherein entity can capitalize on and can
be used to their advantage
Threats- The different external aspects which could jeopardize the success of entity
For instance- SWOT Analysis of Amazon
Strengths
Approach of customer-centric
Effective delivery network

2
MANAGEMENT
Weaknesses
Flop of products
Shrinking Margins
Opportunities
Acquisitions and opening physical store outside USA
Global Expansion (Amazon.com 2019)
Threats
Local level of competition
Different regulations of government
Porter’s Five Forces Model
The respective framework helps in modelling the industry which is being influenced
by the different five forces to analyse the external business environment of the industry. The
five forces framework helps in analysing whether to enter in the respective industry or
inclusion of challenges which can be faced by the companies.
Bargaining Power of Buyers- There can be few buyers present in the market for the
respective product which means the company can drive down prices and dictate the business
(Morgan et al. 2019).
Bargaining Power of Suppliers- The suppliers exert substantial bargaining power
over the different firms and it threatens to increase prices or degrade their quality (Hult and
Ketchen 2017).

3
MANAGEMENT
Threats of Substitutes- These are the key sources of competition present in the
industry and the different substitute products are available at low prices with high quality.
Threats of New Entrants- The potential entrants in the market is the major source of
competition as the size of new entrant plays a major role in identifying their potentials to
affect the existing player (Gurcaylilar-Yenidogan and Aksoy 2018).
Competitive Rivalry- It is the major determinant on analysing how profitable and
competitive the company is and the companies need to compete aggressively in order to
maintain their position.
For instance- Porter’s Five Forces Model Analysis of Amazon
Bargaining Power of Buyers
Low cost of switching is strong force
High availability of the substitutes is strong force
Bargaining Power of Suppliers
Moderate size of different suppliers if strong force
Small number of suppliers is strong force
Competitive Rivalry
High aggressiveness of firms is strong force
High availability of substitutes is strong force
Threats of Substitutes
Low cost of Substitutes is strong force (Amazon.com 2019)

4
MANAGEMENT
Low costs of switching are strong force
Threats of New Entrants
High brand development cost is weak force
High economies of scale are weak force
PESTEL Analysis
It is defined as the framework which is utilized by the different marketers to analyse
along with monitor the macro-environmental factors which can create huge impact on the
organization in positive or negative manner. The result of the same can be used in identifying
the different weaknesses along with threats which can be helpful in improving the scenario
effectively. PESTEL stands for:
 P – Political- It is concerning relating to the degree to which the government will be
intervening in the economy. It is inclusive of the different policies which are made by
the government along with other instability which can affect the growth of the firm
(Ferrell and Speh 2017).
 E – Economic- It includes economic growth, interest rates and inflation which can
create huge impact on business and it helps in analysing the profitability ratio of the
business S – Social- These are the different kinds of areas such as shared attitudes and beliefs
of the population as these can affect marketer in understanding the customers and
what drives them T – Technological- It is the overall analysis of the different technological
advancements and how does it impact the marketing of the products

5
MANAGEMENT
 E – Environmental- It is inclusive of the different factors such as analysis of the raw
materials and doing business in an ethical manner (Dawes 2018) L – Legal- The different aspects such as health and safety laws along with standards
related to advertisements are included which should be traded by company
appropriately.
PESTLE Analysis of Amazon
Political
There is inclusion of political instability and data regulations
Economic
The strong GDP is helpful for increasing market share
Social
There is huge shift in ecommerce and retail landscape (Amazon.com 2019)
Technological
Big data transformation which will be beneficial for online Amazon company
Legal
There are different kinds of legal and regulation challenges against technology sector
Environmental
Limited disclosure on the different environmental sustainability and initiatives
Ansoff Matrix

6
MANAGEMENT
It is defined as one of the marketing related planning model which will be helpful for
the businesses in order to determine the product along with market growth strategy in an
appropriate manner. There are major four quadrants which are termed as the four growth
strategies of the company which are as follows:
 Market Penetration- It is the aspect wherein the firm seeks in achieving growth with
the different existing products in the current segments of market wherein the main
aim is to increase the market share appropriately (Chiang, Chen and Ho 2016) Market Development- It is the aspect wherein the different firms seek proper growth
through targeting the existing products to new market segments in an appropriate
manner Product Development- It is the aspect wherein the firm will be helpful in developing
new products wherein the main is targeted to the existing market segments
appropriately (Cacciolatti and Lee 2016) Diversification- It is the last aspect wherein the firms grow through proper
diversification in the different new businesses by developing the new products for the
new markets in an accurate manner (Baker and Saren 2016)
For instance- Ansoff Matrix of Amazon
Market Development
In the respective approach which is used by Amazon, the company is engaged in the
market development aspects in a huge manner through which they are developing new
products and engaging in development of market which includes shoes, clothing and other
electronic devices.
Product Development

7
MANAGEMENT
It is inclusive of the development of the different new products which can be sold by
them in the existing markets with the same customers. The product development strategy is
one of the most effective strategies which is used by Amazon wherein the company has
introduced the different kinds of products which are new and it attracts the different
customers present in the market as well (Amazon.com 2019).
Diversification
In the respective approach, the diversification is inclusive of the development of new
products wherein Amazon has used diversification through advertisements and gain
competitive advantage in the market as well.
Market Penetration
Amazon tries to use the market penetration in an aggressive manner which helps them
in maintaining high share in the market and it has helped them in increasing the usage by the
existing customers in the market as well. The ecommerce giant Amazon tries to focus mainly
on the personalization of the experience among the users with positive implications on the
sales of the existing products in the market in an appropriate manner.

8
MANAGEMENT
References
Amazon.com 2019 Amazon.com: Online Shopping for Electronics, Apparel and Computers
(online) Retrieved from https://www.amazon.com/ [Accessed on 23rd April 2019]
Baker, M.J. and Saren, M. eds., 2016. Marketing theory: a student text. Sage.
Cacciolatti, L. and Lee, S.H., 2016. Revisiting the relationship between marketing
capabilities and firm performance: The moderating role of market orientation, marketing
strategy and organisational power. Journal of Business Research, 69(12), pp.5597-5610.
Chiang, Y.M., Chen, W.L. and Ho, C.H., 2016. Application of analytic network process and
two-dimensional matrix evaluating decision for design strategy. Computers & Industrial
Engineering, 98, pp.237-245.
Dawes, J., 2018. The Ansoff Matrix: A Legendary Tool, But with Two Logical
Problems. But with Two Logical Problems (February 27, 2018).
Ferrell, O.C. and Speh, T.W., 2017. Marketing Strategy, Loose-Leaf Version. Cengage
Learning.
Gurcaylilar-Yenidogan, T. and Aksoy, S., 2018. Applying Ansoff’S Growth Strategy Matrix
To Innovation Classification. International Journal of Innovation Management, 22(04),
p.1850039.
Hult, G.T.M. and Ketchen, D.J., 2017. Disruptive marketing strategy. AMS Review, 7(1-2),
pp.20-25.
Morgan, N.A., Whitler, K.A., Feng, H. and Chari, S., 2019. Research in marketing
strategy. Journal of the Academy of Marketing Science, 47(1), pp.4-29.

9
MANAGEMENT
Patrutiu-Baltes, L., 2016. Inbound Marketing-the most important digital marketing
strategy. Bulletin of the Transilvania University of Brasov. Economic Sciences. Series
V, 9(2), p.61.