HI6006 - Strategy Tools: Analysis & Application in Business

This essay provides a comprehensive analysis of various strategic management tools used in business development. It delves into the SWOT framework, highlighting its advantages and disadvantages with Woolworths as an example. The PESTLE framework is discussed, emphasizing its role in analyzing external factors before entering new markets, using Tesco as an example. Porter's Five Forces framework is examined for its impact on pricing and industry profitability, exemplified by Telstra. Finally, Porter's Generic Strategies model is explored, contrasting broad differentiation (Apple) with cost leadership (Woolworths). The essay concludes that these models offer valuable insights into both the internal and external environments of organizations, aiding in effective strategy development.

Running head: COMPETITIVE STRATEGY ANALYSIS
COMPETITIVE STRATEGY ANALYSIS
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Introduction
Strategic management based analysis is mainly done in an organization in order to
understand the environment in which it is able to operate. The tools related to strategic
management are thereby helpful for the organizations in order to analyse the industry and the
areas in which they operate in an effective manner. The planning related to strategic
management is thereby done by the organizations in order to develop effective strategies for
organizational operations (Barros, Hernangómez and Martin-Cruz 2016).
Discussion related to SWOT framework
SWOT analysis can be considered to be a strategic management based tool which can
play a major role in the proper identification of the place of the business in an industry. The
four major factors that are thereby analysed with the help of this tool mainly include, the
strengths, the weaknesses, different opportunities and major threats. The development of an
effective strategic plan can also be considered to be a role that is thereby played by SWOT
model (Daspit et al. 2017).
Advantages of SWOT framework
The major advantage that is provided by the model is based on the ways by which the
position of the company can be detected in an active way. The different aspects of the
organization are also provided in an effective way with help of the four factors of the SWOT
framework. The strategies are thereby developed based on the position which is formed by
the business in the industry.
Disadvantages of SWOT framework
The disadvantages of the model are thereby based on the ways by which the changes
can take place in the internal factors of the company. This can play a key role in the

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credibility of the results which are provided by the analysis (Demir, Wennberg and McKelvie
2017).
Example of SWOT framework
The SWOT analysis of Woolworths will play a key role in the methods by which the
company is able to develop its future strategies in an effective manner. The position of the
organization is provided by the analysis with the help of SWOT framework. The strategies
can thereby be developed in an effective manner (Demir, Wennberg and McKelvie 2017).
Discussion related to PESTLE Framework
The PESTLE analysis based framework can be used in an effective manner by the
organizations before they plan to enter a new country or area. The different factors which are
thereby analysed with the help of this framework mainly include, the political situation of the
country, the economic situation, social factors, technological development, legal concerns
and the environmental concerns. The proper analysis of these factors are thereby able to
affect the ways by which the organizations can develop effective entry based strategies
(Durand, Grant and Madsen 2017). The technological and economic environment is also able
to affect the ways by which the company is affected and their strategies are developed. The
external environment based factors are thereby able to help the ways by which organizations
cam develop their strategies in any industry.
Advantages of PESTLE framework
The overview of the external environment which is provided by the PESTLE
framework is considered to be an important factor and advantage of the model. This overview
plays a vital part in the operations of the organizations in new countries or market areas.
Disadvantages of PESTLE framework

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The disadvantage on the other hand is based on the ways by which fast changes can
take place in the external environment. The model thereby needs to track the changes
effectively in order to maintain its credibility (Dyer et al. 2015).
Example of PESTLE framework
The PESTLE analysis of Tesco can provide an overview of the country in which the
company can develop effective entry based strategies. The strategies can thereby play a key
part in the methods by which Tesco can develop its effective place in the retail industry of
another country.
Discussion based on Porter Five Forces Framework
The proper analysis of the five forces is considered to be a major factor which can
affect the prices of different services and products which are offered by the firm. The industry
in which organizations can operate in a profitable manner can play a major role in the
revenues and profitability. The major areas and factors which are thereby considered in the
five forces framework include, bargaining power of the buyers, bargaining based power of
the suppliers, threats related to presence of substitutes, threats related to the entry of new
organizations and the levels of rivalry (Dobbs 2014). These forces are thereby able to affect
the revenues of the company and the methods by which prices of different products are
decided. The industry based forces are thereby highly important for the types of services
which can thereby be offered to the customers.
Advantages of Porter’s five forces framework
The major advantages which can be provided by the model are based on the ways by
which the position of the industry can be analysed effectively. The industry of operations of
the company can thereby be analysed effectively with the assistance of Porter’s framework.

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Disadvantages of Porter’s five forces framework
The subjective nature of the analysis is another major factor that can act as a
disadvantage of the Porter’s framework. This framework is always not able to provide an
effective picture of the entire operations of organizations in the industry (Engert, Rauter and
Baumgartner 2016).
Example of Porter’s five forces framework
The Porter’s five forces analysis of Telstra is able to provide a study of the
automobile industry in an effective way. This is further helpful for the company to
understand the industry in which it operates and further develop strategies.
Discussion based on Porter’s Generic strategies model
The Porter’s generic model can be used in an effective manner in order to decide an
effective growth based strategies of modern organizations. The growth based strategies which
are thereby applied by the company are built on the methods by which they are able to
increase their profitability based levels. The organizations thereby need to decide the strategy
which they wish to implement based on the needs and demands of consumers. The levels of
competition in the market is thereby able to play a major role in the effective processes of the
organizations after implementation of growth based strategies (Ethiraj, Gambardella and
Helfat 2018).
The first generic strategy which can be implemented by the modern companies is
termed as the broad differentiation strategy. This strategy is mostly based on the quality of
products that are offered to the consumers irrespective of the prices. The company thereby
aims at developing a major differentiation in the market in comparison to the others in the
industry.

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The second generic strategy is based on the cost leadership that has been obtained by
the company in the industry. This strategy is based on the lowest prices which are offered by
the company to customers. This helps the company to develop a leadership position in the
industry based on the prices of products and services. The strategy is thereby helpful for the
company to create an active place in the industry with the help of lower prices (Frynas and
Mellahi 2015).
The growth strategies are thereby able to play a significant part in the ways by which
the company is able to develop a unique place in the industry with the help of its services and
products.
Example Porter’s Generic strategies model
Apple uses the broad differentiation strategy and Woolworths uses the cost leadership
strategy.
Conclusion
The discussion in the essay has been able to depict that the different models are able
to provide an effective picture of the internal and external environment of the organizations.
Further, the industry of operations can also be understood effectively.

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References
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