Strategic Planning | Assessment 1

Strategic Planning 0
Competitive Advantage
Student’s Name
8/19/2019

Strategic Planning 1
Contents
Introduction................................................................................................................................2
SWOT analysis...........................................................................................................................2
Porter’s five force analysis.........................................................................................................4
Ansoff matrix.............................................................................................................................7
Conclusion..................................................................................................................................8
References................................................................................................................................10

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Introduction
Strategic planning is considered as a tool that helps the companies in guiding
their directions and also evaluates the progress of the organizations when they
move forward. It allows the company to be proactive and actively respond to
changing trends in the business environment (Wolf and Floyd, 2017).
It is considered as a roadmap that aligns the functional activities of the
organization to the set goals. It brings operational efficiency and increases the
profits of the company through the determination of consumer and market
trends (Nickols, 2016).
The additional paragraphs of the report will reflect upon different strategic tools
used by companies to enhance their operational efficiency and expand the
market share and profitability of the business. The strategic tools will include
SWOT analysis, Ansoff Matrix and Porter’s five forces.
SWOT analysis
This strategic tool is considered as the most powerful tool for making the
internal investigation of the strengths and the weakness of the companies. It also
includes the analysis of external threats and opportunities to the business
(Phadermrod, Crowder and Wills, 2019). This tool describes the core competencies of
the company and overcomes the threats that lie in the external environment. The
company uses the strengths to maximize their efficiency and increase the profits

Strategic Planning 3
of the business (Gurel and Tat, 2017). The additional paragraph will reflect upon
the SWOT analysis of Woolworths.
Strengths of Woolworth:
The strengths of the company help not only in protecting the existing market
share but also allow the company to penetrate in new markets. It is analyzed
that Woolworth has strong brand portfolio and applies automation of activities
to maintain the qualities of the products. The company is able to generate higher
revenues on the new capital expenditures (Bull et al, 2016).
The company focuses on providing products at lower prices by establishing
strong relationships with suppliers and distributors. The company consists of
highly skilled workforce who focuses on maximizing the satisfaction of the
customers (Bull et al, 2016).
The weakness of Woolworth:
Weakness refers to areas that the company can improve for sustaining of
competitive advantage. It is analyzed that the organization structure of
Woolworth is only limited to present business model however the company is
not able to advance its product segments. It has limited success outside its core
business and is not able to have proper demand foresting. This, in turn, leads to
missing of opportunities and losing of small market share (Nickols, 2016).
Opportunities for Woolworth:

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It refers to the external factors that provide success to the business. The new
taxation policy, technological advancements, and trade free agreement provides
the opportunity to the company. The company gets the opportunity of
expanding the customer base through the use of online channels. The uptick in
economy and increased customer spending gives the opportunity of
advancements (Gurel and Tat, 2017).
Threats for Woolworth:
Threats refer to the external factors that are not in control of the business. The
growing strength of local distributors and changing preferences of the online
customer base creates a threat to the profitability of business. The company is
not able to deliver innovative products and also faces lawsuits in various
markets. New environmental regulations and lack of skilled workforce create
threat for the company (Bull et al, 2016).
Porter’s five force analysis
This strategic tool is used to analyze the competitiveness of company in the
external environment. This strategy helps in developing a competitive
advantage through the analysis of the industry. The intensity of competition and
profitability of business is determined through the use of this tool. The further
paragraphs will describe the five force analysis of Rio Tinto (Harding, 2017).
Bargaining power of buyers:

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It defines the ability of the consumers to drive the prices down. The bargaining
power of buyers is high because they demand best offerings at best possible
prices. This, in turn, creates the pressure upon the long term profitability of Rio
Tinto. The company has high pressure because of increasing substitutes
(Luttgens and Diener, 2016).
Bargaining power of suppliers:
It describes how easily the suppliers can increase the price of the input. It is
analyzed that there are various mineral industries that buy the product from
numerous suppliers however the bargaining power of suppliers is high because
they negotiate with the companies and decreases the profitability of Rio Tinto
(Luttgens and Diener, 2016).
The threat of substitute products:
It describes the threat of delivering the products by the competitors that provide
same satisfaction to customers. There are only few substitutes available which
provide high-quality products and the company provides the products
comparatively at lower cost which in turn decreases the chances of switching of
customers to the other brands however the threat of substitution decreases
(Rothaermel, 2013).

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There are only few substitutes available which are manufactured by low-profit
industries however there is no celling to maximization of profits and thus
decreases the threat of substitute products to the industry (Harding, 2017).
The threat of new entrants:
The new government policies also create difficulty for the new entrants because
it involves complex procedure before selling the product. It is analyzed that the
threat of new entrants is weak because in this business the cost of production is
high and the industry provides differentiated products which in turn lowers the
threat of new entrant (Rothaermel, 2013).
Rivalry among existing competitors:
It defines the intensity of competition that exists in the external environment. It
is analyzed that Rio Tinto faces the competition from few competitors which in
turn decreases the competitive actions of the firms. The company involves huge
capital resources and provides highly differentiated products which in turn
makes the rivalry forces weaker and provides the opportunity of being the
market leader. The moves of the competitors are easily visible to the company
and hence the intensity of the competition decreases (Harding, 2017).

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Ansoff matrix
It is recognized as a strategic tool that helps the senior-level managers,
marketers, and executives to determine the approach for the development of the
business. This tool helps the company in increasing its sales and thus maximizes
the revenue of the company. It focuses on designing new products or services or
involves tapping into the new markets to grab the opportunity and advance the
growth of the business. The additional paragraphs will reflect upon the four
strategies that Apple adopts to increase its business growth (Hussain et al, 2013).
Market Penetration:
This strategy focuses on vending current products in the existing markets. It is
analyzed that Apple Company sells its products globally and has 506 retail
stores in 24 countries. It operates its business into five countries which include
China, Japan, Europe, Asia Pacific, and America (Taylor, 2012).
Product development:
This strategy focuses on the development of innovative products and services. It
is analyzed that Apple has made investment of up to USD14, 24 billion in the
year 2018 on the research and development and makes the continuous updates
in the series and develop innovative product to satisfy the changing needs of the
customers (Taylor, 2012).
Market Development:

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This strategy centres on tapping the new market for current products. This is
considered as the main growth strategy of Apple because the company analyses
the growth opportunity in emerging economy Asia and expand its market for the
growth in the long term perspective (Toften and Hammervoll, 2011).
Diversification:
This strategy includes the development of novel products for the new market.
This strategy involves huge resources and is considered as the riskiest strategy.
It is analyzed that Apple is focusing on diversification strategy for the short
term perspective because the company is considering the global market
saturation for the iPhone as a major source of revenue. It does not get fully
engaged in the diversification strategy (Toften and Hammervoll, 2011).
Conclusion
From the above discussion, it is critical to note that strategic planning is
essential for driving the growth of the companies and analyzing the
opportunities that lie in the external environment. It is analysed that strategic
planning acts as a roadmap for achieving operational efficiency and increasing
the profits of the company.
Through the adoption of various strategic tools the company can analyze the
external environment and can sustain its competitive advantage. The tools
mentioned above include SWOT, Ansoff Matrix and Porter’s five force model.

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It will help in analyzing the intensity of competition and overcoming of the
weakness to effectively face the changing trends in business environment. The
Ansoff matrix reflects upon the strategy adopted by the company for growth of
business.

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References
Bull, J.W., Jobstvogt, N., Bohnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C.,
Lambini, C.K., Rawlins, M., Baral, H., Zahringer, J. and Carter-Silk, E., (2016) Strengths,
Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services
framework. Ecosystem services, 17, pp.99-111.
Gurel, E. and Tat, M., (2017) SWOT analysis: A theoretical review. Journal of International
Social Research, 10(51).
Harding, S., (2017) MBA management models. Routledge.
Hussain, S., Khattak, J., Rizwan, A. and Latif, M.A., (2013) ANSOFF matrix, environment,
and growth-an interactive triangle. Management and Administrative Sciences Review, 2(2),
pp.196-206.
Luttgens, D. and Diener, K., (2016) Business model patterns used as a tool for creating (new)
innovative business models. Journal of Business Models, 4(3).
Nickols, F., (2016) Strategy, strategic management, strategic planning and strategic
thinking. Management Journal, 1(1), pp.4-7.
Phadermrod, B., Crowder, R.M. and Wills, G.B., (2019) Importance-performance analysis
based SWOT analysis. International Journal of Information Management, 44, pp.194-203.
Rothaermel, F.T., (2013) Strategic management: concepts. New York, NY: McGraw-Hill
Irwin.
Taylor, E.C., (2012) Competitive improvement planning: using ansoff's matrix with abell's
model to inform the strategic management process. In Allied Academies International

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Conference. Academy of Strategic Management. Proceedings(Vol. 11, No. 1, p. 21). Jordan
Whitney Enterprises, Inc.
Toften, K. and Hammervoll, T., (2011) International market selection and growth strategies
for niche firms. International Journal of Entrepreneurship and Innovation
Management, 13(3-4), pp.282-295.
Wolf, C. and Floyd, S.W., (2017) Strategic planning research: Toward a theory-driven
agenda. Journal of Management, 43(6), pp.1754-1788.