Strategic Development Tools - Essay
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Added on 2021-06-18
Strategic Development Tools - Essay
Added on 2021-06-18
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COMPETETIVE STRATEGYInstitutional Affiliation(s)Student name[Course title]
P a g e | 1EssayStrategic development tools provide organisations with benefits through which effective planning and execution of decisions are made in critical manner. For strategic development tools, organisations collect desired information and relevant data that are processed according to the management tools to achieve strategic goals and objectives[ CITATION Qeh17 \l 16393 ]. There are many developments tools that are used by businesses, but among all PESTLE, SWOT, Ansoff and Five Force analysis are the four toolsthat are immensely used by contemporary organisations[ CITATION Liz03 \l 16393 ]. Therefore, this essay will analyse these four management tools while applying them in real businessenvironment. PESTLEPESTLE or PEST analysis tool is used by managements to identify and evaluate external or macro factors facing the firm. This tool is mostly used at the time when companies plan to enter new market because it helps organisations get a knowledge required for formulating plans and for conducting situational analysis. PESTLE analysis comprises of factors that are related to Political, Economic, Social, Technological, Legal and Environment.To stay ahead of the game, organisations make macro or external analysis of their firms at regular intervals as it helps them to identify significant changes in business environment that needs alteration for effective business operations[ CITATION Abh13 \l 16393 ]. Making PESTLE analysis of McDonalds will help in evaluating external factors that presents threats and opportunities to the company while operating in macro environment. Politically, McDonald has expansion opportunities due to its exclusive international trade andglobal supply chain system. The company makes continuous reforms in its strategic and practices to lesson taxes without violating country’s law[ CITATION McD181 \l 16393 ]. However, nutritional values have affected the sales of company’s product many times. Economic conditions have always been favourable for the company as McDonalds new market entry strategy always targets developed and developing countries where economies ofscale can allow sales for the company products. Social factors have remained challenging for the company due to change in lifestyle trend, as more people are switching from fast food to healthier and fresh food. Technologically, McDonald has a strong base, however, its diversification strategy shows more scope for improvement in it. Legal constraints in diversified countries McDonalds operates in also affects company’s sales and cost factors.
P a g e | 2Environmental factors affect McDonalds since most of its business is outsourced to franchise owners and any change in operating country’s climate can distress overall supply chain system[ CITATION Dem08 \l 16393 ]. SWOT SWOT analysis is most frequently used development tool which provide aid to the management in the process of decision making. This tool is considered as the most effective tools and very useful for the success of business since it prepares organisations for future threats and opportunities. By identifying firm’s strengths and weaknesses, SWOT analysis helps organisations discover new trends and threats that can be rectified before it turns out to be distressing. It can also be said that SWOT analysis is a visual representation of internal factors that are related to business environments that includes firm’s Strengths, Weakness, Opportunities and Threats[ CITATION Nei11 \l 16393 ]. This development tools not only maximises business strengths, but also alerts companies regarding obstructions that comes in growth path while formulating strategic formulas to gain competitive advantage[ CITATION Hel10 \l 16393 ].Samsung is one of the leading brands dealing in electronic products and mobile phones and making SWOT analysis of the company will help in evaluating firms’ internal factors. Samsung biggest strength lies in its strong portfolio for which it has become one of the known brands worldwide. Innovation and investment made in R&D products have added to its strength. Company also follows diversification strategy by introducing wider range of products in many countries. However, there are few weaknesses also like the company neverintroduces new products on its own and always wait for its competitors to make the first attempt. Dependency on foreign country production and outsourcing manufacturing for cost curtail adds further to its weakness. Opportunity can be seen in Samsung company as there is wide scope for opening more retail store that can attract customers in rural areas. By providing customers with additional service, Samsung can maintain enhanced relationships with its customers along with gaining loyalty. Nevertheless, continuous reformation in technology and innovation affects strategies of Samsung. Threats from its competitors also impacts product sales especially in Chinese market[ CITATION Ras15 \l 16393 ]. Five Force Analysis
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