STRATEGY DEVELOPEMENT TOOLS ESSAY 2022

RUNNING HEAD: STRATEGY DEVELOPEMENT TOOLS
Strategic Development Tools

STRATEGY DEVELOPEMENT TOOLS 1
Introduction
The essay is prepared on ‘Strategic Development Tools’. It comprises of various tools that can
benefit the business. It emphasized on the role of PESTLE Analysis, Porters Five Force
Analysis and Ansoff matrix model. Additionally, it comprises of the practical examples of the
recognized companies that are affected by the factors of strategic tools. The key purpose of
the discussion is to gain an effective knowledge of the strategy development tools through
practical application.
Meaning
Strategic development tools assist in identifying and researching the opportunities, threats
prevailing in the business environment (Verlag, 2017).
Role of strategic tools
They attain a high significance as they provide direction to the business. It assists in
determining the impact of the environment forces on the performance of the business.
Through its application, the business can avail benefits in the competitive business
environment (Verlag, 2017).
It provides skill and knowledge to the higher management in respect to achieving
organizational goals. With its usage, a business can be proactive rather than reactive. It
assists in enhancing market share and profit. It allows the business to create effective
planning to foster organizational growth. Thus, it can make the business more durable
(Birkinshaw, 2016). Some of the recognized tools are PESTLE Analysis, SWOT Analysis and
Porter’s Five Force Analysis (Insight, 2019).
PESTLE Analysis
PESTLE Analysis is an effective instrument used for understanding the outward business
environment of a business. It assists in analyzing the macro-environment factors that have a
major influence on business execution in the market. It is mainly useful for the new business
to determine a suitable business environment or entering a foreign market. It deals with
understanding the Political, Economic, Social, Technological, Legal and Environmental factors
in respect of a country (Parera , 2017).

STRATEGY DEVELOPEMENT TOOLS 2
Political environment deals with the government actions that have an effect on the operations
of the business (Humphreys , 2015). Economic environment refers to the external monetary
factors that impact the purchasing behavior of the consumer. It includes GDP, Inflation, and
Per capita income of the country. These factors have a direct effect on business profit
(Robertson , 2015).
Social environment includes factors such as cultural norms and values of a country. In order
to sustain longer in a country, a business must align with the religious norms and customs
(Humphreys , 2015). Additionally, Technological environment determines the availability of
technology progress in the country. It includes factors such as internet speed and innovation
level (Parera , 2017).
Environmental factor deals with climate and natural vegetation of the country that can
influence the business environment of a company. Moreover, the Legal environment refers to
the attitude of the government towards the business in a country (Robertson , 2015).
Example: PepsiCo is an American multination company. It is a globally recognized beverage
brand (Forbes, 2019). Previously, it had faced an impact on its business with respect to
Economic, Social, Technological and Legal factors. It can be assessed from the factors
described below:
Political factor
As mentioned above, Pepsi is an international brand. It has its consumer market in various
countries including China, Australia, India and Japan (PEPSICO, 2019). Thus, to understand
the cross border situations, it has to align with the political factors of each of the countries
mentioned above.
Economical factor
It has analyzed that because of the fall in GDP and Economic growth (Economic Downturn), it
had led to the enhancement of sale. It is because a large section of people was jobless and
was spending time with peer groups resulted in high Pepsi consumption in the year 2008
(Capital, 2019).