PESTLE and Porter Five Force Model for Global Strategy Analysis

The article discusses the use of PESTLE and Porter Five Force Model tools for global strategy analysis. It explains how these tools provide a comprehensive overview of the business environment, covering political, economic, social, technological, legal, and environmental factors. The article also provides a brief analysis of the Australian market using these tools.

Operations- PESTLE and Porter Five Force Model
Question#1 & 2
The market analysis tools I have selected for analysing the global strategy encompass
PESTLE (Political, Economic, Social, Technological, Legal and Environmental) analysis and
Porter’s Five Forces Model. Further, the views expressed by Mike and Tiffany during our
discussion in week 2 were quite energising and broaden my outlooks towards new tools and
mechanism like SWOT, SOAR and TOWS to name a few. All tools are great and provide a
wide outlook towards global strategy, but the tools I have selected are the relevant and holds
great strategic importance in the global market.
I still believe the tools used in the analysis hold greater importance based on the
following rationale: it means both tools provide a holistic approach to strategic management,
it covers major factors influencing the business and all of market is analysed under both the
models. The PESTLE covers the political environment of the country or countries in which
company operates and the impact of that on company prospects (like taxes, tariffs etc), the
economic scenario like GDP, per capita etc, Social factors like demographics, age, culture
etc, Technological Factors like innovation impact, Legal and Environmental impact on
business. Further, Porter’s five force model analyse the threat of substitute product, the threat
of competitors, threat of new entrants, the bargaining power of suppliers in the industry and
bargaining power of customers. Thus, both tools offer a systematic and comprehensive
overview of the business encompassing each critical factors for survival and growth of
business.
On the basis of above, it may be inferred that both tools covers all crucial aspect of
business whether its political, economic, social, competitor etc. Accordingly, ,it can be said
that tools are complete in itself and helps in better analysis of business global strategy and

actions needs to be taken for acquiring any new business or entering any new market. Hence,
the above tools are sufficient. (Frue, 2017)
Further, PESTLE and Porter Five Force Model tool is used by many giant companies like
Starbucks, Pepsico etc
Question#3
How would you refute the people who chose an additional tool rather than one of the tools
that you selected?
There is no analysis tool that fits all business analysis process as nothing is perfect and the
tools chosen by peers may be complete in itself and able to provide a logical understanding of
the industry and competitors. Further, a chosen tool when implemented may not give similar
results in all the countries on account of host of reasons. In addition, the tool chosen by me
i.e. Porter Five Force Model and PESTLE provide a strong data to analyse the competitors
and industry. The tools provide me the necessary analysis for making sound decisions.
Accordingly, the tool selected by me are best in the market I operate.
Further, as to refute the people who choose an additional tool rather than the tools,
which I have selected, choices are typically justified according to market parameter. People
choosing the method according to their own wants and desires generally end up with the
same result as compared to other methods based on their circumstances.
Question 4
Based on the tools that you selected, provide a brief analysis of your market, using those
tools?
The tools that I have use for analysis is PESTLE and Porter Five force Model and the chosen
market is Australia. On considering the political front Australia is a Constitutional Monarchy

with Elizabeth II as head of state and has a safe and stable political environment. It is a
member of many associations around the world like G20 etc.
On an economic front the country grew by 2.4% in 2017 and the growth rate in 2018 was
approximately 3%. The current tax rate of companies is 30%. However, the rate reduces to
27.5% subject to certain conditions. The import of the country stood at US $ 221.4 Billion.
On social front Australia is one of the best countries to live in terms of wealth, education,
quality of life and health. The population of country is small near about 22.9 Million. The
county has good number of universities.
On Technological Front, it is one of the most advanced nations of the world and the
technology purchase shall increase at the rate of 4% in 2019.
On the environmental front, it is one of the most beautiful cities of the world and necessary
steps are taken to maintain it and on the legal front it has fair trading laws, competition law
etc
Further, from Porter Five Force Model point of view similar analysis shall take place.
Thus, on the basis of above, both the tools are very simple tool yet very powerful to analyse
the competitiveness of the business environment and the profitability of the business. As the
Porter Five Forces model suggest whenever there is a new situation crop up in an industry,
which can easily drain the profitability part of the company one should easily change the
strategy of the company as for an instance take advantage of the strong situation and improve
the weak part. Porter identified five forces, which can overall erase the profitability of the
entity, which are like competitive rivalry, supplier and buyer power, threat of new entry, and
substitution, which can be easily available in the market, can be made in a cheap and best
way, and can also erase the profitability of the company while PESTLE covers a 360 degree

view of the business incorporating all the angles that a business should look into for a global
strategy.
References
Frue, K. (2017, MAy 30). PESTLE Analysis in Strategic Management. Retrieved January 13,
2019, from pestleanalysis.com: https://pestleanalysis.com/pestle-analysis-in-strategic-
management/
Mind Tools. (n.d.). Porter's Five Forces Understanding Competitive Forces to maximise
Profitability. Retrieved January 13, 2019, from www.mindtools.com:
https://www.mindtools.com/pages/article/newTMC_08.htm
Pestleanalysis Contributor. (2016, February 15). The Role of PEST Analysis in Bolstering
International Business. Retrieved January 13, 2019, from pestleanalysis.com:
https://pestleanalysis.com/pest-analysis-in-international-business/

Please see pic on how to do references on APA format no need for date like the January
13,19