Strategy Development Tools

This article discusses the importance of strategy development tools in business growth and success. It explores resource-based view, Porter's five forces, SWOT analysis, and PESTLE analysis. Examples from Zara, Uber, Apple, and Amazon are provided.

Running head: Strategy development tools
Strategy development tools

Strategy development tools
Strategy development tools in the business
It can be said that strategy development tools has an important role in the overall growth of the
business. It is investigated that without the strategy development tools, the business would not be
able to give their best towards the operational activities. In this paper, the emphasis will be given
on the different tools that are important for the business to consider as it helps in managing the
activities of the company in the high level of competition. The tools that will be elaborated in
this paper are Resource based view, Porter five force models, SWOT analysis and Pestle
analysis.
Resource base view is known as the strategy development tools that are used by the companies.
It has been analyzed that resource based view is the approach that focuses on the concept that
includes different types of tangible and intangible resources such as skills, information, assets
and knowledge. When these resources are combined then it boost the capabilities of the business.
With the help of this tool, the companies also determine the resources that are needed in the
workplace (Hitt, Xu and Carnes, 2016).
It helps to access the way in relation to the utilization of the resources and also enable the
company to perform and offer the competitive advantage. It is believed that to focus on the long
term competitive advantage, it is important to maintain the resources and the different aspects
should be considered such as Valuable, rare, imitable and non substitutable. Therefore, it can be
stated that resource based view is often used for evaluation of the resources and also with the
help of this tool the company can consider the core competences (Barney,2017).
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Strategy development tools
(SOURCE: Jurevicius, 2018).
 Example of Zara
One of the best examples that can describe the resource based view tool is of Zara Company. It
can be seen that Zara has a good brand image in the market so it can be considered as the
valuable resource. Just because of the dispersed manufacturing system of the company, the
company enables to meet the basic requirements of individuals around the globe and this can be
stated as the rare resource. Zara always emphasizes on maintaining the brand value with high
quality so that it is difficult to imitate the products of the company. Zara also have more than
3000 designers and there are 650 stores of the company, so that products are easily organized in
the highly competitive market area.
The next tool is porter five force models that emphasizes on the five factors which are
1. Bargaining power of the suppliers
2. Bargaining power of the buyers
3. Threats of substitute
4. Threats of new entrants
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Strategy development tools
5. Rivalry among the existing firms
The rivalry can be high if there are many competitors present in the market. It can be examined
that the factor related with the new entrants depends on the new companies that are entering into
the same market. The other factor which is power of the suppliers focuses on the number of
suppliers present in the market. On the other hand, the power of the buyers focuses on the
driving the prices down of the customers. The threat of substitute also consider the products that
are similar in nature and in this there is wide choice with the customers to substitute the products
of the company with the other companies offering similar types of products (Adi, 2015).
 Practical example of the Uber Company
Uber is considered as the largest company in relation to the taxi services, cab sharing and
transportation industry. The company offered the services at fewer prices that have helped to
maintain the competitive edge. But there are other companies also who offers similar types of
services such as Ola and Lyft. So, it can be stated that there is high competition level in the
market. There is also high threat of substitution as the other companies are offering the similar
types of services to the customers. The company also relies mainly on the suppliers for the cars
so that bargaining power of the suppliers is high. It is also examined that the company doesn’t
have the permanent buyers as there are various other choices with the company.
SWOT ANALYSIS is also the tool that emphasizes on the four factors such as strength,
weakness, threats and opportunities. It is the effective strategy that assists the companies in
determining these basic factors (Steffen, 2017). The strength and weakness of the company are
related with the internal factors of the company such as the organizational policy and employee’s
motivation level. Opportunities and threats relates with the external factor of the company such
as competition level, policies of the government and also the resources. It can be stated that this
framework is considered to focus on the strategies that helps the companies to be the leader of
the competitive market (Shabanova et al., 2015).
 Example of Apple Company
Apple Inc. is known as the multinational company in the technological sector and it showcase the
different electronic products. The company strength emphasizes on the brand image that is
maintained in the market. The innovative products are offered by the company which can be
stated as the strength. Weakness of the company relates with meeting the expectation level of the
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Strategy development tools
customers. The company has the opportunity to attain the large market share by entering into the
different market areas. It is important for the company to aim at boosting the services o the
global platform. But the threat faced by the company is from the competitors such as
SAMSUNG that are offering similar products in the market (Khan, Alam and Alam, 2015).
PESTLE ANALYSIS is the tool that assists the marketers to evaluate the external barriers that
are faced by the companies. In this tool, there are different factors such as political, economic,
social, technological, legal and environmental. The forces influence the strategic planning of the
company and also these factors are not in the direct control of the company. It is necessary for
the company to emphasize on these factors so that it could be easy to attain the competitive
advantage on the global platform (Rugman and Verbeke, 2017).
 Example of AMAZON
Amazon is the popular ecommerce company that focuses on the growth. It has been examined
that company has to face political disruption at the time of entering into the new economy. At the
time of recession, the retail sector was at boom and attained goals. Due to the changing trends,
the sales of the company have been affected. Customers now prefer online shopping more.
Amazon also considered latest technologies that boosted the brand image. The company is also
emphasizing on using drones to deliver the products in the market. There is much legal
compliance in relation to fake items provided to the customers. It has been seen that company
focused on the packaging and delivery that are eco friendly.
So, it can be concluded that these are the important tools that should be considered by the
companies. These tools assist the companies in considering the right step which is beneficial for
their growth and success in relation to the high competition level that exist in the market areas.
These tools can boost the demand of the products and services among customers.
References
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Strategy development tools
Adi, B., 2015. An evaluation of the Nigerian telecommunication industry competitiveness:
application of porter’s five forces model. World, 5(3), pp.15-36.
Barney, J.B., 2017. The evolutionary roots of resource‐based theory. The SMS Blackwell
Handbook of Organizational Capabilities, pp.269-271.
Hitt, M.A., Xu, K. and Carnes, C.M., 2016. Resource based theory in operations management
research. Journal of Operations Management, 41, pp.77-94.
Jurevicius, O., 2018. Resource Based View. [Online]. Available at:
https://www.strategicmanagementinsight.com/topics/resource-based-view.html. [Accessed on 20
April 2019].
Khan, U.A., Alam, M.N. and Alam, S., 2015.A critical analysis of internal and external
environment of Apple Inc. International Journal of Economics, Commerce and
Management, 3(6), pp.955-961.
Rugman, A. and Verbeke, A., 2017. Global corporate strategy and trade policy.Routledge.
Shabanova, L.B., Ismagilova, G.N., Salimov, L.N. and Akhmadeev, M.G., 2015. PEST-Analysis
and SWOT-Analysis as the most important tools to strengthen the competitive advantages of
commercial enterprises. Mediterranean Journal of Social Sciences, 6(3), p.705.
Steffen, B., 2017. The physics of software tools: SWOT analysis and vision. International
Journal on Software Tools for Technology Transfer, 19(1), pp.1-7.
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