Competitive Strategy: SWOT, PESTLE, and Porter's Five Forces Analysis

This report provides a competitive analysis of Estia Health, Graincrop Limited, and Alphapharm pharmaceuticals using three strategic analysis tools: SWOT, PESTLE, and Porter’s five forces. The SWOT analysis identifies the strengths, weaknesses, opportunities, and threats for Estia Health and Alphapharm, highlighting areas for improvement and potential risks. The PESTLE analysis examines the political, economic, socio-cultural, technological, legal, and environmental factors affecting these companies, emphasizing the macro-environmental influences on their operations. Porter’s five forces model assesses the threats of new entrants, bargaining power of suppliers and buyers, threats of substitutes, and industry rivalry, revealing the competitive dynamics within their respective industries. The analysis concludes that these tools help companies focus on critical factors, gain insights into organizational profitability, and understand how macro-environmental factors shape their strategies and competitive landscape.

Running head: COMPETITIVE STRATEGY
Competitive Strategy
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COMPETITIVE STRATEGY
Competitive advantage refers to the ability that is gained through the available resources
and attributes in order to perform at a better and higher level than the rest others, belonging in
the same market environment (Hassan, Yaacob and Abdullatiff 2014). Near about every
organization has to face stiff challenges and threats from their business rivals in every market in
the current era. Hence, competitive strategy is very important, as it helps the companies to ensure
that they are accessing returns for a much longer period of time. In this paper, the competitive
analysis of the three companies- Estia health care, Graincrop limited and Alphapharm
pharmaceuticals will be discussed. This paper will elaborate on analyzing these three companies
based on three strategic analysis tools, namely the SWOT, PESTLE and Porter’s five forces.
SWOT analysis- SWOT analysis or SWOT matrix refers to the technique of strategic
planning that is used in order to help an organization to identify its strengths, weaknesses,
opportunities and threats that are related to its business competition and project planning (Aithal
2016). The SWOT analysis is intended basically to specify the business venture objectives or
that of the project as well as to identify the external and internal factors that are both favorable
and non-favorable for attaining those objectives. Being one of the leading healthcare companies
in Australia, Estia Health Limited has a wide range of strengths that is helping it to succeed in
the market. Some of them are reliable suppliers, superb performance, a successful track record of
product innovation, and Strong free cash flow. Estia has also built a culture among the dealers
and the dealers (Naccarella et al. 2018). On the other hand, in case of Alphapharm
pharmaceuticals, the strengths of it include that if offers a wide range of pharmacy services
including the retail services, wholesale product delivery and business advisory services. It has a
huge number of landmark banners and products. The weakness of the healthcare is that it has a
very limited success outside its core business and its profitability ratio, net percentage of

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contribution along with its financial planning is below average. It needs more investment in the
product innovation as well. On the other hand, the weakness of the pharmaceutical company is
that the alleged accounting discrepancies and the sigma takeover controversies have affected
Alphapharm in great terms. However, the opportunities present for this aged care is of the
presence of lower inflation rate, opening of new markets, new technologies, new trends in
customer behavior, introduction of new taxation policy and gaining more new customers from
the online channels. Also, there is a huge scope for development in the areas of personal care and
well-being for the pharmaceuticals in Australia (Rudd et al. 2014). It can divest the assets of the
pharmaceuticals that could assist the company in enhancing its focus on the core business.
Moreover, the threats that are faced by the Estia health care are increase in the trend towards
isolation in the Australian economy, which can further lead to similar reaction from the other
government, which in turn will negatively affect the global sales. The other threats include the
growing strengths of the local distributers, seasonality in demand for the high profitable products
and intense competition.
PESTLE analysis- PESTLE is an acronym for Political, Economic, Socio-Cultural,
Technological, Legal and Environmental (Ab Talib et al. 2014). It describes a complete
framework of the macro-environmental factors that are used in environmental scanning
components of the strategic management. It acts as a strategic tool in order to understand the
decline or growth of the market, the current position of the business, and the directions for the
operations. The political factors are usually how the country government could intervene in the
economy, the economical factors include of the interest rates, economic growth and all that are in
relation with the economy (Zalengera et al. 2014). The Social refers to the cultural aspects, the
health consciousness, the age distribution, rate of population growth and safety issues. The

COMPETITIVE STRATEGY
technological factors consist of the aspects such as the automation, R&D activities and the
technological change rate. Lastly, the legal and environmental factors are all about laws,
regulations and environmental changes such as that of climate etc. The political factors that have
the tendency to affect these three companies are favored trading partners, risk in the military
invasion, corruption level, taxation, trade regulations and tariffs, wage legislation, employee
benefits, product labeling and pricing regulations (Kolios and Read 2013). The economic factors
that are and can tend to influence the company are discretionary income, interest and inflation
rates, rate of economic growth, labor costs, the level of education in the economy, rate of
unemployment, financial market efficiency and the stage of business cycle such as recession,
prosperity and recovery. With the same, the social culture and the way of conducting things can
also affect the culture of the organization. In the case, the social factors include class structure,
culture (social conventions and gender roles), leisure interests, attitudes, demographics and the
level and standard of education. The technological factors also impact the health care,
pharmaceuticals and the agricultural companies in several ways such as by affecting its product
offering, cost structure and the value chain structure. Furthermore, recycling, weather, climate
change, regulation of air and water pollution, endangered species, waste management and the
attitudes towards sustaining renewable energy. Lastly, the legal factors that have an impact on
this company are data protection, employment law, and discrimination law, anti-trust law along
with health and safety law.
Porter’s five forces- The Porter’s five forces was introduced by Michael porter
(Rajasekar and Al Raee 2013). It is also a tool to analyze the competition of a specific business.
The five forces include- the threats of new entrants, bargaining power of the suppliers,
bargaining power of the consumers, threats of substitutes, and industry rivalry (Yunna and

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Yisheng 2014). The threats of new entrants brings in innovation and put pressure on the Estia
health care, Graincrop Limited and Alphapharm through lowering down the pricing strategy,
providing value propositions to customers and by reducing the costs. These companies have to
manage all the challenges and built effective barriers in order to safeguard its competitive edge.
Secondly, the bargaining power of the suppliers can tend to decrease the margins that these
companies could have earned in the market place. The powerful suppliers use their power of
negotiating in order to extract from the company (Ho 2014). With the same, the buyers are
demanding a lot (Ben-Daya et al., 2013). They have the tendency to buy the best things within a
minimum price. It is putting pressure on the profitability of the Estia health care and Graincrop
Limited. Similarly, when a new product meets the need of the customers in different ways, the
profitability of the industry suffers a lot and so is in the case of these companies as well. Lastly,
if the rivalry among the players in the industries is very intense, it will drive down the prices and
shall decrease the overall industry profitability. Like, for example, Graincrop Limited, Estia
health care and Alphapharm pharmaceuticals operates in a competitive health care services
industry and this competition takes toll on overall long term organizational profitability.
Hence, to conclude, it can be said that by doing SWOT analysis, the companies could be
able to focus on the critical factors and could discount the less important one. With the same, by
assessing the porter’s five forces for all the three companies, helps in gaining a complete insight
of their organizational profitability. Furthermore, it is also to be noted from the above discussion
that the macro environmental factors can also influence the companies directly by affecting the
competitive landscape and the shaped strategy.

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