Strategic Tools for Competitive Strategy: SWOT, PESTLE, and Porter’s Five Forces

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Competitive strategy

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Introduction
In the recent time, competition has increased in every industry. due to this, every business
organisation is required to take the help of strategic tools. Several strategic tools have
evolved over the time that further assist in knowing the environment. among all the tools,
SWOT analysis is such tool that is popular. This tool helps the business to know its internal
(strengths and weakness) as well as external (opportunities and threats) environment. besides
SWOT analysis, PESTLE analysis also proved to be powerful tool in order to access the
external environment. in addition to this, porter’s five forces has also been discussed.
First strategic model:
PESTLE analysis is the strategic tool that assists in analysing as well as monitoring the
external environmental factors. When any firm trying to start its business, this tool helps them
in several ways. It is because there are several factors that are required to be considered
before starting business in any of the country. PESTLE stands for the political, economic,
social, technological, legal and environmental factors. Political factor states how much
government of the concerned country interfere in the particular business. It is required to be
considered because every business is affected by the stability of instability of any business
organisation. Political factors include several elements such as policies made by the
government, taxation policy, environmental as well as corruption law. All these factors play
an essential role. As compare to this, economic factors are known as the determinant in every
economy. Factors that are included in the economic factors are exchange rates, interest rates,
and unemployment and inflation rates. These factors tend to put the long term as well as short
term, impact on every business. Social factors include the customs as well as rules within
which any business is required to operate. For example- in the recent time, customers demand
is changing over time. This requires the businesses to change its taste and preference as per
the demand of customer. In the recent, several technological changes are also brought in the
organisation due to the increasing technological preference. By ensuring the technological
changes, organisation brings the creativity and innovation in the business. It includes
technological changes, technological initiatives, level of innovation and amount of technical
awareness. These factors influence the decision of any business to enter into any of the new
market segment or not. IN the recent time, pollution as well as several environmental
problems has increased. Due to this, it becomes essential for the firm to become socially

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responsible. Government has also taken several measures in order to set the target related to
the carbon footprint. This has also led the businesses to ensure its involvement with the
corporate social responsibility as well as sustainability. For example- Australian retail firms
have also attached them with the proper policies and laws that are made by the government.
Legal factors on the other hand include the antitrust laws, patent and copyright laws, safety
laws, health laws and consumer protection laws. By taking such analysis, companies are
required to know what is or what is not legal for undertaking the business successfully. For
example: Woolworths have to properly ensure the laws and policies that are made by the
government (David, David and David, 2017).
Second strategic model: SWOT analysis
SWOT analysis is a tool that helps every business organisation to know its internal as well as
external factors. It is true that several factors present internally as well as externally that gives
positive as well as negative impact to the organisation. In the internal factors, strength and
weakness are included. As compare to this, external factor includes the threats and
opportunities. Both these factors help the organization in some or other way. if business will
know about its internal capabilities, it can achieve the competitive advantage over the other
competitors. Similarly, when knowing about its threats, it can work on them. Every business
organisation tends to work communicate effectively with the other parties so that it can
achieve the growth. Weaknesses are said to be those characteristics that hampers the
productivity of the organisation negatively. Due to this, it is beneficial to know the weakness
prior to the situation that put the business condition worse. For example- several businesses
tends to face the problem in communicating well with the organisation. this sometimes
hamper the marketing of its business. Therefore, conducting of the swot analysis, it can
improve the situation. At the same time, threats are also seen in terms of political instability,
sudden changes in the consumer demand or any technical outbreak. These situations tend to
affect the business. In order to avoid all these problems, SWOT analysis will prove as the
best strategic tool (Gurel and Tta, 2015).
Porter’s five forces: third strategic tool
In the recent time, it is true that the competition has increased to a great extent. Due to this, it
is essential for the organisation. It includes several elements. The first one is the power of
suppliers. It tends to assess how much it is easy for the suppliers to bargain for the prices. The