competetive strategy - Assignment

tudent a eS N m
T T T FF TINS I U IONAL A ILIA ION(S)
C M T T T TO PE E IVE S RA EGY

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Introduction
Contemporary organisations have to face various uncertainties and market changes for
which the management try to access its performance at regular interval of business course.
Development tools can be defined as techniques that are utilised by management to ensure
competitive advantage in every organisational activity to provide best decision making and
predictions for future performances (Anna, 2015). This essay will analyse two of the most
significant development tools used immensely by contemporary organisations while making
internal and external assessment and gaining information about organisation’s competitive
position.
Practical application examples
Nestle SWOT analysis
SWOT analysis is a development tool that is used by managements to formulate
organisation’s strategic planning and strategic management. It helps in building
organisational strategy effectively and gives base for determining firm’s competitive
strategies (Gurel & Tat, 2017). Nestle is one of the most prominent brands dealing in dairy
and food products worldwide including Australia, America, Asia and European countries
(Nestlé, 2018).
1. Strength: SWOT analysis of Nestle reveals that the company recognises many strengths
that allows Nestle in development of core capabilities and resources along with gaining
competitive edge. The strong market recognition along with brand image has gained
consumer loyalty to a great extent. Furthermore, the company itself is involved in corporate
social responsibility that heightens firm’s image for following sustainability strategies that is
aligned with consumers expectations.
2. Weakness: One core weakness can be seen in some of the Nestle’s products that shows
less healthier food like sweets and chocolates containing artificial sweeteners. Even, food and
dairy related factors remains highly dependent on advertisement to gain customer attraction
and drive everyday sales that can lead Nestle to higher marketing and advertisement costs.
3. Opportunity: Since the firm gives value to internationalisation and shows developmental
capabilities, opportunity lays in front of the company particularly in countries that have
emerging economies. Due to growth in online marketing and sales, Nestle can increase its

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distributor partners by collaborating with online sites like Amazon and eBay to drive high
sales.
4. Threats: Threats seen for the company is arising competition due to which the company
have to constantly make changes in its pricing and other strategic choices ( Varma & Ravi,
2017). The change in lifestyle of people where they have become suspicious about packaged
food gives additional threat to the company.
GlaxoSmithKline SWOT analysis
To determine successful selection of strategies and business-related decisions, examining
internal and external environment of GlaxoSmithKline through SWOT analysis will prove
significant as it helps in balancing organisation’s internal strengths and weakness against
environmental threats and opportunities ( Osita, et al., 2014).GlaxoSmithKline (GSK) is a
firm dealing in bio-chemistry i.e. pharmaceutical and chemical industry in Australia.
1. Strengths: The company is financially very strong along with gaining huge availability of
resources that gives GSK strong marketing and sales activities adding to the company
strengths (GSK Australia, 2017).
2. Weakness: Weaknesses can be been seen in its internal environment like issues found in
few of its manufactured drugs along with failures in dealing with required expectations.
While meeting high consumer demands, the company have released its expired batches that
had made numerous controversies regarding GSK products.
3. Opportunities: Opportunities like entering into oncology and biological market along with
antibodies specialists lays in front of GSK that can build strong market recognition and
increased cash flow for the company.
4. Threat: Risk related to unsuccessful products and inadequate awareness among consumers
constitutes threats for the company. Along with it, GSK have to face many legal and
environmental constraints while dealing with highly saturated chemical and drugs
(GlaxoSmithKline Australia Pty Ltd., 2018).
Nestle Five Forces analysis
Competition have always proved critical force for organisations while performing
organisational activities regardless the industry they belong to (Indiatsy, et al., 2014).
Although there are many development tools present in literature, most of the researchers and

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authors prefer five forces analysis model since it is perceived to be the best for analysing
competitive environment of the firms ( Omsa, et al., 2017).
1. Threats of new entrants: Making Five force analysis of Nestle shows that threat from
entrants in dairy and food related products seems relatively weaker force as consumers prefer
selecting renowned and prominent brands for dairy and food products. Even the market
remains restricted for new entrants since Nestle has been present in Australian market from a
long time.
2. Threat of substitute products: This shows a strong force since there are lots of brands
available in market who offers similar products like that of Nestle. Nevertheless, a recent
innovative step taken by the company where in all the products of Nestle, wellness and health
conscious factor have been implemented that made the company go beyond all the substitute
products available in the market.
3. Suppliers bargaining power: Nestle have maintained strong relationship with its suppliers
due to the fact that dairy and food products quality is very necessary in food related business.
Nestle focuses on building strong and sturdy relationships with its supply partners and
constantly guides them how to work more proficiently to develop quality and cost-effective
products. However, suppliers are always free to switch to other brands and thus company
faces strong force here.
4. Bargaining power of customers: This is again a strong force for company due to
availability of alternative products. Nevertheless, constant innovation and development in
dairy and food-related products have made very influential choices for the customers that
have made Nestle one of the prominent brands to gain customers support.
5. Competitive rivalry: Since Nestle maintains quality in its products, it has always been
dominant in the marketplace and beyond its competitors and therefore, this force remains
weak force for the company ( Varma & Ravi, 2017).
GSK Five Forces analysis
1. Threats of new entrants: GSK Porter’s five forces analysis reveals its competitive position
in Australian market. Threats of new entrants in bio-chemical company is relatively a weak
force since lots of cost investments is required by the companies for making initial
experiments and researches. As a result, GSK have to worry less under this force, however,
GSK requires developing its existing products to capitalise more on its brand name.

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2. Threat of substitute products: At present, there are many alternative products available in
bio-chemical industry which makes threat of substitute products a strong force for the
company.
3. Bargaining power of buyers: This is a weak force for the company since the company have
achieved strong market position. Since most of its customers includes doctors, patients,
chemical engineers and other healthcare institutes, they avoid compromising in product
quality and try to avail products from reputed brands only like GSK.
4. Bargaining power of suppliers: This force also remains weak for GSK as the company
always adhere to legal and governmental rules along with paying excellent remuneration and
cost for raw materials to its suppliers for which suppliers show less to no bargaining power.
5. Competitive rivalry: GSK prospers without actually facing much competition with its rival
companies since the company shows excellent foresightedness and plans ahead of the others.
However, in bio-chemical industry, many rivalry companies give competition to GSK for
which the company keeps developing its products with extensive research (GlaxoSmithKline
Australia Pty Ltd., 2018).
Conclusion
The above essay has explained what strategy development tools are and after applying these
tools in real life industries, it can be said that strategy development tools plays a significant
role in smooth running of businesses. The above essay has applied SWOT analysis and
Porter’s Five forces analysis in bio-chemistry and a dairy food company and found out how
these tools can be utilised to analyse both external and internal environment of the companies
including industry rivalries.

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References
Anna, A., 2015. Strategic Management Tools and Techniques and Organizational
Performance: Findings from the Czech Republic. Journal of Competitiveness, 07(03), pp. 19-
36.
GlaxoSmithKline Australia Pty Ltd., 2018. GlaxoSmithKline Australia: About Us. [Online]
Available at: https://au.gsk.com/en-au/about-us/
[Accessed 08 12 2018].
GSK Australia, 2017. Responsible Business Highlights Report 2016. [Online]
Available at: https://au.gsk.com/media/388915/gska_responsible_business_report_2016.pdf
[Accessed 08 12 2018].
Gurel, E. & Tat, M., 2017. SWOT Analysis: A Theoretical Review. The Journal of
International Social Research, 10(51), pp. 994-1006.
Indiatsy, C. M., Mwangi, M. S., Mandre, E. N., Bichanga, J. M. & George, G. E., 2014. The
Application of Porter’s Five Forces Model on Organization Performance: A Case of
Cooperative Bank of Kenya Ltd. European Journal of Business and Management, 06(16), pp.
75-85.
Nestlé, 2018. Nestlé in Oceania. [Online]
Available at: https://www.nestle.com.au/aboutus/home/nestle-australia-company
[Accessed 08 12 2018].
Omsa, S., Abdullah, I. H. & Jamali, . H., 2017. Five Competitive Forces Model and the
Implementation of Porter’s Generic Strategies to Gain Firm Performances. Science Journal
of Business and Management, 5(01), pp. 9-16.
Osita, I. C., R. , I. O. & Justina, N., 2014. Organization’s stability and productivity: the role
of SWOT analysis an acronym for strength, weakness, opportunities and threat. International
Journal of Innovative and Applied Research, 02(09), pp. 23-32.
Varma, G. . R. & Ravi, J., 2017. Strategic Analysis on FMCG Goods: A Case Study on
Nestle. International Journal of Research in Management Studies, 02(04), pp. 12-22.

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