Market Analysis and Competitive Strategy in Management

This document discusses the current market scenario and the importance of competitive strategic decisions in business. It explores market analysis tools like Porter's five-force model and SWOT analysis. The document also analyzes the competitive strategies of companies like Wesfarmers and Adidas. Additionally, it provides insights into the Ansoff matrix and PEST analysis.

Management
MBA
Student name
5/2/2019

The current scenario of the market majorly highlights about the competition. Every
business whether it an existing one or a new entry, all are in competition with one
another Hence, by making use of various marketing tools every company firstly
analyse the market and then further initiates for competitive strategic decisions so
that in future the workings can be carried effectively and efficiently. In terms of
competitive strategy, there are numerous ways, which helps the company to analyse
the entire market and accordingly, the business takes actions to generate long-term
success.
Posters 5 force model- Posters five-force model is one of the market analysis tools
of the business that helps in shaping every industry and helps in determining the
industries weaknesses and strength. Hence, it is applied to various segment of the
economy in order to search for profitability and attractiveness.
Wesfarmers is one of the famous and well-renounced companies in Australia, which
is based on food and staples retailing aspect. This company due to the innovation
aspect, lower pricing strategies, cost reduction and providing new value to
proposition to the customers face many challenges of new entrants. Along with this,
the capital requirements are also high which makes difficult for the other company to
set their business.
In terms of the bargaining power of the suppliers, Wesfarmers avail their
resources from its different market as a resultant, there are numerous varieties of the
product and the services which thy deal in with. Hence, this highlights that the
company has only limited competition in the supplier's markets. Thus, this is one of
the major obstructions for the Wesfarmers as the organization, which are totally
depended over many suppliers at a time.
Bargaining power of the buyers- In this aspect, Wesfarmers does the market
analysis in order to know about the customers’ wants, expectation, and the modern
trends of the customers’. Hence, for thisWesfarmers also generates and apply its
sustainable approach for further recognition. This highlights that the buyer's power is
moderate in nature and with the adoption of the various strategies such as
innovation and differentiation will attract more of customers.

Rivalry among firms- Wesfarmers is one of the well-known firms of Australia and
has its name all over the world. Hence, with such a brand image the number of
competitors is very few. In terms of cost, Wesfarmers is having a higher fixed cost,
which makes the entire company push to full capacity. Moreover, Wesfarmers is
majorly focused on product differentiation so that the company product can be
unique and helps them in reducing the other existing firm competition (D'Amato,
2010)
.Threat of substitutes- In terms of substitutes; it is very high of Wesfarmers as
compared to the other aspect. Wesfarmers states that they have adopted a
sustainable aspect to grow and have adopted environmental friendly, energy efficient
methods of productions. So that the overall working within the organization can be
improved, leads to the best quality of products and consumers services which leads
to the competitive advantage and hence it reduces the effect of the substitutes and
will increase overall profitability.
SWOT analysis- SWOT analysis highlights about the strategic planning technique
that helps the company to know about the strength, weaknesses, opportunities, and
threats, which are related to the further business competition or project planning and
overall success.
Adidas is one of the strongest sports brands in the world, which is well known by
every individual. As they are known most prominently for its range of shoes, this
brand also started manufacturing for clothing and accessories. In terms of SWOT
analysis, strength highlights the company’s strong points for which the companies
brand image and liking are at hike (Byun, 2015).
Strength of Adidas highlights that it is that brand that carries decades of heritage
and legacy over a longer period and over years; it has maintained its reputation in
the market for being a youthful brand till date. Along with this, Adidas also has a
diversified portfolio in products. Moreover, this brand also has a strong financial
position over an entire market.

The weakness of Adidas highlights that due to the innovative technology their
product prices are always high which have made the brand affordable to the limited
customers. Other than this, Adidas has a limited product line and over time through
market research, it is analysed that there is more scope for the product line
expansion (Bull, et al, 2016).
Opportunities of Adidas highlights that they are grasping the changing lifestyle,
working over the changing taste and the preferences of the customers and steep rise
in the demand for goods and services are also taken into consideration. Moreover,
expansion in product line opens up new opportunities and increments the demand of
the premium products.
Threats to Adidas Company on a major scale are an intense competition of the other
brands such as Nike, which is one of the well-known brands in this premium
segment. Other than this, there is also some regular competition of local players,
substitutes and the market penetrators. Moreover, suppliers’ dominance is also one
of the major threats to the company. Lastly, government regulations, tariffs, and duty
play an important role in pricing and success of the company (Borowski, 2011)
.Ansoff matrix- This is that market strategy, which helps the company to present
and potential products and market. In this, there are four possible combinations,
which include-
Market penetration majorly highlights about selling more products to the existing
customers. This is all done through the promotion of the product or by reducing
prices to increase sales. In terms of Apple, they launch a new version every 12
months and add variety to an existing product. However, due to Samsung
expansion, it is difficult for Apple to win as they apply promotional techniques to
attract their customers (Ansoff, 2003)
.Product development – This aspect highlights about developing products for
customers who are loyal towards the brand. Hence, it’s a medium risk strategy
likewise Apple Inc. introduced iPod shuffle for its existing iPod customers which are
a handy and portable device. Therefore, in this firm is familiar with its business but
not with the new products (Al-Laham, and Huth, 2011)

.Market development- In this, an introduction of an existing product to a completely
new market is known as market development. Hence, in this, the company targets
new region, country, demographics, and new customers segment. In terms of apple,
I pad touch as similar as iPhone expects the phone calls. Hence, through this apple
developed a new base market.
Diversification- Diversification is just a new launch of a new product in a completely
new market. As with this type, there is a major risk and more cost involved. Hence,
future outcomes will be vast different from the regular one. Likewise, Apple Inc. the
well-known company- apple iTunes entered the completely new market of the music
industry from being of computer/ phones (Aksoy, 2018)
.PEST Analysis-
Pest analysis helps in analysing the market of the company by majorly considering
political, legal, technological and social aspect. Hence, in terms of Amazon, this is
one of the well-known online retail markets highlights is political, social and
technological aspect.
Political- Amazon is totally benefited from political stability and hence, this helps in
generating more opportunities to expand and diversify its business. Other than this,
overall governmental support for e-commerce is also helping in expansion. Hence,
Amazon highlights major opportunities that the company should exploit to increase
its resilience in-commerce industry (Sammut‐Bonnici, and Galea, 2015).
Economic- Amazon economic stability helps in increasing the success of the
company. Moreover with the increase in the disposable income in the developing
market also helps the company to boost its financial performance and leads to the
overall success of the firm.
Social- In the social-cultural aspect, the increase in wealth disparity and higher
disposable income level leads to an increase in the potential revenue of the Amazon.
Moreover, the increase in consumerism also creates opportunities for Amazon to
grow (Team, 2013)
Technological- Technology advancement directly affects Amazon and over time,
obsolescence leads to pressure. Hence, if Amazon will continuously make heavy
investments in technology, this can help in boosting their sales, profits, and will able

to maintain its competitive advantage and protect Amazon from new entrants in e-
commerce industry (Andersen, and Reis, 2015)

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