Porter's Five Forces Model of Denyall

Global Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
1. STEEPLE Model.....................................................................................................................1
2. Porter's Five Forces Model......................................................................................................4
3. Shareholders Map....................................................................................................................5
4. Strategic capabilities of company...........................................................................................6
5. VRIO Model............................................................................................................................7
6. SFA strategy (Suitability, Feasibility and Acceptability).......................................................9
CONCLUSION.............................................................................................................................10
Reference.......................................................................................................................................11

INTRODUCTION
Global strategy is the procedure of expanding and competing in global market. Global,
multinational and international strategies are covered in the global strategy. In general terms,
global strategies means that company is moving in international market outside home country
(Sanchez-Runde, Nardon and Steers, 2013). In order to achieve the objectives and goals in
international market, these all are the three areas which are very essential. For international
expansion, global strategies play a vital role. In this present report, Denyall Company of France
is chosen that is a cyber-security company. Its parents company is Rohde & Schwarz. This report
will analyse the macro and micro environment that have direct and indirect effect on company.
STEEPLE and Porter's Five Forces model will be discussed in this report. Furthermore, strategic
capabilities and VRIO models are also discussed here. Besides this, SFA Strategy (Suitability,
Feasibility and Acceptability) will also be explained here.
MAIN BODY
1. STEEPLE Model
STEEPLE analysis is the most popular tool that helps to analyse effects of external
environment. This is a simple strategic management method which is used to study the impact of
external environment. This model is based on PEST analysis with the addition of legal, ethical
and environmental factors. Denyall Company is also using STEEPLE analysis to study and
analyse effect of macro environment on the operations and functions of business. There are five
factors involved in this model which are socio-culture, technological, economic, environmental,
political, legal and ethical (Dann, 2016). Socio-culture Factors- Social-culture factors have direct impact on the business as it
includes beliefs and practices, traditions behaviour and customs of all the people living in
the particular country. All these elements of social-culture has directly influenced by
trends, fashion, lifestyle, willingness to pay and activities of market. It is one of the most
essential components that affects the decisions of marketing manager as well as goals and
objectives of company which is going to enter in international market. Besides this,
average disposal income of people, wealth of people, level of education, habits of buying,
preferences of customers and many other social factors that has direct impact on the
operation and function of company (Getz, 2018).
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 Technological Factors- Technological factors are those that are becoming very popular
among the people as nowadays, people are more concerned about the technology they are
using. The changes in technologies have direct impact on the company. In order to take
the best strategic decision about development and growth of company as well as about
investment, Denyall is using this model to avoid destructions in the activities of
company. In this modern world of speedy advancement of technology, the decisions of
manager of company should be flexible and quick. In order to survive in turbulent
competitive environment, flexibility plays an essential role (Werthner, 2018). Economic Factors- Economic factors consider all essential trends in economy which
assist or hinder in achieving goals and objectives of company. Employment factor,
behaviour of consumers, rate of inflation, interest, banking and others are common
factors that are included in economic factor. Laws and regulations of the nations are also
the part of economic factors. There are some economic indicators like number of jobs
created by company in the market, strength of union and additional load of salary. Political Factors- Political factors have a direct impact on the business as it is closely
connected to legal factors. Stability in the political environment develops confidence
among people and company planning or investing in a specific nation. In the
development and growth of company as well as to economy, political factor has a great
role (Williams, 2017). Social and cultural environment of nation is influenced by political
decisions. Beside this, there are some other factors which are involved are procedure,
permits, traditions of bribing government officials, power, culture and many others. Legal Factors- Legal factors include all the laws and regulations of country that have
direct and indirect impact on the functions and operations of the business. Legal factors
have both positive and negative impact on the operations of business. Legal factors are
linked with tax and custom regulations such as tax code of country, restriction of tax on
specific business, export and import restrictions as well as income tax and corporate tax. Ethical Factors- Ethical factors are those factors that include all the processes and
actions that influence the behaviour of managers and workers inside the organisation.
Ethical factors include morality, duties, behaviour and integrity, pons and cons of
company as well as betterment and welfare of society (STEEPLE Model, 2017). Denyall
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is operating in security of cyber-crime which results in increasing the morality of
customers as well as of company.
 Environment Factors- Environmental factors has direct influence on the business that
are linked to actions and procedures which is very essential to secure and protect natural
environment as well as increase and maintain the efficiency of the business firm.
Company should render services and products which are eco-friendly, create image of
company, gaining appreciation from consumers. These factors influence the decision
taken by management of company. Environment or ecological factor exert pressure on
company for clean business (Peleggi and et.al.,2016).
Illustration 1: STEEPLE Model
(Source: STEEPLE Model, 2017)
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2. Porter's Five Forces Model
Porter's Five Forces model is proposed by Michael Porter. It is an instrument for studying
competition of company. This model also helps in analysing company’s strengths and
weaknesses. It is mainly a competitive strategy that tracks the level of competition in the market
as well as companies strategic position of the firm in the market. There are five forces as per this
model i.e. competition in the industry, bargaining power of suppliers, bargaining power of
customers, threat of new entrants and threat of substitutes (Wibbeke and McArthur, 2013).
 Competition in the industry-This force is one of the most important force as it
refers to number of challenges prevailing in market. In order to increase the attractiveness
of market, Denyall is tracking their competitor’s strength and weaknesses as well as their
offerings in the market. Denyall is facing intense competition as because of information
technology industries are already saturated. This force of porters handle the effect of
competition. In Denyall case, the powerful force of challengers is based on some external
factors such as there are high number of companies operating IT industry, high
aggressiveness of company and low cost of switching. There are so many first operating
in cyber security so Denyall is facing intense competition in the market.
 Powers of Suppliers- This is the force that suppliers exert pressure on company.
All the companies in the sector of information technology purchase there raw material
from various suppliers. If Position held by suppliers is dominant that it decreases the
margin of profit of Denyall. Denyall use there powerful negotiating powers to control the
high prices charge by suppliers. The overall impact of powerful suppliers are it decreases
profits of company. Denyall is controlling their power by maintaining efficient supply
chain and they are experimenting with the designs of products using various materials so
that if suppliers increase their prices, company will move to another (Kasemsap, 2017).
 Powers of Buyers- Nowadays, customers are very demanding. They want to buy
the best product in reasonable price. They exert pressure on Denyall profitableness in the
long run. So the bargaining power of buyers in information technology sector is very
high. Still Denyall is controlling there bargaining powers by offering develop and
advance technologies to them. They are working and offering there services and products
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as per their expectations and needs. They always consider and keep customers in their
mind as without customers they will earn nothing. Today in the world of globalization,
there are so many companies in information technology sector are operating and working,
so customers has so many another option to move so it is very essential to give services
and products as per there expectations.
 Thereat of New Entrants- In the sector of Information technology, threat of
entrants are moderate, it is not so high as because it is not easy to defeat the players in the
market. In information technology, new entrants always come up with innovation and
creations in the style of products and services. New Entrant put pressure on Denyall to
reduce the cost as well as offer new and advance products and services to customers but
Denyall is controlling and managing all these challenges and build effectual barriers to
secure its edge of competency. Beside this, threat of entrants is not so high because
technologies are not easily be understand by new comers.
 Threat of Substitutes- Threat of substitutes in information technology is generally
low for those companies who are major players in this sector as they know how to
upgrade the technologies as per advancement in economy (Motohashi, 2015). Denyall
company is also facing threat of substitutes but they have trick to control or handle them
by becoming service oriented rather than product oriented as well they are understanding
the key needs of consumers rather than what consumers is purchasing.
3. Shareholders Map.
The duties of shareholders are depends on specific situations of business. Mapping of
shareholders states that duties of shareholders are not an uncommon and strange phenomenon. In
old days shareholders of the company has no duties when they invest in company. So all the
duties are map in proper way in order to render an overview of actual and potential duties. This
mapping will help to show a variety and variance of duties of shareholders.
The variety of shareholders duties- In order to render an overview of the variety of
shareholders duties. The duties of shareholder are classified as per the sources, in specific
statutes, soft laws, contracts and case law. Secondly, duties of shareholders are divided according
to there interest.
The variance of shareholders- In this factor, it states that what analyse the intensity of
shareholders duties. In this company will find out the duties of shareholders that vary when
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organisation is listed on an organized market. There are private companies as well as public
companies. Companies which are listed in regulated market applies some laws and security.
Map of shareholders duties are usually designed by there characteristics they have such
as there age, religion, gender, nation and profession. Mapping of shareholders are fully
integrated parts of the legal system.
4. Strategic capabilities of company.
Strategic capabilities means the ability of business to successfully apply strategies of
competition that help company to sustain as well as increase its value both in the market and
among customers. Strategic capabilities focus on companies assets, position in the market as well
as its resources and how these capabilities will be used in the future. There is nothing in the
market to measure or calculate strategic capabilities of company. Denyall company has many
strategic capabilities that company has and it will be beneficial for future as well. It is very
important for company to measure the outcomes of these strategies. Company should identify
special situations, enable flexibility, provide contextual intelligence and build historical rights of
customers by these improvements in strategies Denyall can lead in digital age.
Strategic capabilities of Denyall is its strength in cyber security. Company is working
with there intelligence. Employees of company are the powerful strength of company (Cox,
Clegg and Ietto-Gillies, 2013). They are working very nicely as company recruit talented
employee's. The manager of company are very flexible they accept all the changes coming in the
environment. Resources of company are also capable enough to exploit weaknesses and they will
be very beneficial in future as well. Denyall has well known and effective structure as its system
of management control and policies of compensation are very impressive.
Core Competencies
 strength in cyber security
 recruit talented employee's
 Effective structure of organisation.
 Resources of company are very effective.
 Resources are capable enough to exploit weaknesses.
 Flexibility (Scherer, Palazzo and Matten, 2014).
 Stakeholders are satisfied.
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5. VRIO Model.
VRIO model is developed by Jay B Barney. It is the framework tool that is used to
analysis as well as evaluate the internal resources and capabilities of company. For example-
financial resource, human resources and non material resources. This model will also analyse
companies strength and weaknesses. This is the tool which is used by wide range of companies.
Further, this model will give rise to the chances that will be advantageous for the company.
Denyall company is also using this model to analysis its strength and weaknesses. In order to
compete in the market, it is very essential to know and understand exactly what company have.
There are four criteria which VRIO refers as V-value, R- rarity, I- imitability and O-organisation.
 Question of Value- This is question regarding the resources available in the
organisation whether they are enough and appropriate or not. It is very essential for
company to identify there resources as because if company has enough resources than
company will alleviate a threat in the market place. Resources are the strength and power
of the company. In order to perceived value, resources plays a vital role. Company can
achieve by enhancing differentiation and reducing the price of the product. Available
resources of the company should be capable enough to exploit weaknesses and assist
company in long survival of firm. Resources which save time, and efficient are the
strength of the company (Yeates, 2014).
 Question of Rarity- Capabilities and resources that are unique and acquire by
only few companies are known to be rare. It is not easy to make resources unique and
bring rarity. Rarity and uniqueness bring great profitability to the company as well as it
leads to competitive advantages in the market. Company does nit have competitive parity
of company does not have rarity factor (VRIO Model, 2017). There are some situations
arises when there are more than one company selling same product and having similar
resources, it leads to competition but there is no competitive advantages. Denyall
company has some rare factors in there cyber security program which is strength for
company, and they are managing its resources which are there strength as once it is loses
than company will loses its existence in the market.
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 Question of Imitability- In business imitation is everywhere. When one company
sees that a challenging firm is getting success with a particular product, another company
will quickly work on imitation of that product as close as possible. By imitation of the
product, company gains power and stand in the market as a direct competitor. In this
situation, rivalry company will usually enter with low price of the product. When Denyall
company enters in new market, they also come up (Bresser, 2015) with low price so that
they can able to build brand recognition and some point of loyalty. Imitation of the
product and services can only be protected and secured by patent, copy right and other
legal protection. By these protections, company can make it very tough to compete as
well as imitate product.
 Question of Organisation- This is the last point in this model as question of
organisation. The structured of the organisation is in such a way that it can able to exploit
any and benefits that has been identifies in above three points. In order to give the best
competition in the market. Its is very necessary that the structure of company should have
power to fight competition. Well known and effective structure of organisation is when
companies system of management control and policies of compensation.
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(Source:VRIO model, 2017)
6. SFA strategy (Suitability, Feasibility and Acceptability).
This is the strategy that helps business or company in formatting of strategies in right
manner. It is not easy to select right strategy for business. So this is the best approach that help to
decide the criteria which is suitable for that situation or option. SFA model is used by Denyall to
systematically formatting the strategies for there functions and operation (Popescu, 2013).
 Suitability- This is the most essential elements in SFA strategy model as because
it is very important that strategies which is chosen must be selected as per the suitability.
There are some suitability like environmental suitability, expectation suitability as well as
capableness suitability. Strategies of company that should proves strength for company is
being chosen. The strategies made by the managers of Denyall is sometimes suited on
situations and sometime not.
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Illustration 2: VRIO model

 Acceptability- Acceptability factor also plays a vital role as it is very essential for
company to measure the return on investment, risk factor and reactions of customers,
employees and shareholders. Return on investment will be evaluated by the benefits that
stakeholders anticipate from the strategies which can be financial or non financial. Loses
in term of fund, brand and profit states the risk factor that is involves in acceptability. It
can only be evaluated by liquidity, and reaction of stakeholders. The strategies made by
Denyall is accepted by there stakeholders.
 Feasibility- In SFA model, this is the most important factor as when company is
going to formulate its strategies, they have to measure the available resources, employees
and abilities which company posses or not as because before implementation of
strategies, these all are the key to success or failure. So, it is very essential for managers
to anticipate and examine the flow of cash in the company. The manager of Denyall
company are measuring and evaluating there resources so that strategies which are
formulated should be beneficial for company as well as their stakeholders (Kasemsap,
2015).
CONCLUSION
From the above report it was summarized that macro and micro environment has direct as
well as indirect impact on the functions and operations of business. Furthermore, STEEPLE
analysis and porter's five forces model is also included in this assessment. Moreover, strategic
capabilities and VRIO model was studied to make internal analysis of company. Beside this,
global strategy is the procedure of expanding and competing in global market. Global,
multinational and international strategies are covered in the global strategy is also understood in
this report.
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