Development Tools Analysis for Effective Competitive Strategy

This report delves into the application of various development tools for formulating effective competitive strategies. It begins with an introduction to the importance of strategic tools such as Porter's Five Forces, SWOT analysis, and PESTLE analysis. The report then explores each tool in detail, providing a framework for understanding external and internal factors that influence a company's market position. Porter's Five Forces analysis examines threats of new entrants, supplier power, buyer power, competitive rivalry, and the threat of substitutes, with Tesco as a practical example. PESTLE analysis focuses on political, economic, social, technological, legal, and environmental factors, using Apple as a case study. The report also covers SWOT analysis, highlighting strengths, weaknesses, opportunities, and threats, with Toyota as an example. The report concludes by emphasizing the importance of these tools in achieving business goals and objectives, and the need for continuous analysis in a dynamic market environment. This report is a valuable resource for students studying business development and strategic management.

Running Head: Development Tools
Competitive strategy

Development Tools
Introduction
It can be evaluated that there are many strategies that should be considered by the
company so that activities can be conducted in a proper manner. These are the tools Porter five
force analyses, SWOT analysis, and PESTLE that helps the company to survive in the market in
a proper manner. It is seen that these tools help the company to conduct the activities in a right
direction and also consider proper analysis related to internal and external factors. These tools
suggest the company to focus on the strategies which are effective.
Five force analysis
It can be analyzed that this framework is considered by the top management so that
directions can be given in a proper manner (E. Dobbs, 2014). Through this tool the company can
analyze the external environment in a proper way. There are five elements in this model like a
threat of entrants, a power of suppliers, a power of buyers, and rivalry against the competitors
and threat of substitute
The first factor is concerned with the threats of entrants in which proper valuation is done
by the new entry which takes place in the market. In this factor, it is seen that focus is given to
the cost which takes place when the business is established. Next factor is concerned with the
supplier's power that how many suppliers are present in the market (Porter and Kramer, 2018).
It can be evaluated that when there are few suppliers then the increase in demand takes
place and when there are more suppliers then demand reduces. The third-factor analysis is
related to buyer's power in which it is seen that how much products are purchased by the
customers and also their power is analyzed in a proper manner (Johnson, 2016). Fourth is related
with the rivalry against the competitors and in this evaluation is made by taking into
consideration the competitors who are present in the market. It is seen that if there are more
competitors then it can be a threat to the company.
The last force is related to the threat of substitute available in the market and it is seen
that if substitution of the product is done effectively then it can give negative impact on the
overall activities and can also hinder at the time of attaining goals and objectives of the company
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(Hjaila et al., 2017). So, it is important for the company to focus on reducing the substitution as
negative impact can be seen in the overall profits.
Practical Example is of Tesco
Threat of entrants
There are many threats to new entry which take place in the market. If the focus is given
on Tesco it is seen that the threat is high as there are many companies who are entering the
market to conduct the same activities. When the company enters the market, it is seen that
company offers same products if a comparison is made with the competitors prevailing in the
market (Salavou, 2015).
Suppliers Power
It is considered as low as there are many suppliers who are giving products in the market.
The customers are free to purchase the same product from any outlet (Pervan, Curak and Pavic
Kramaric, 2017).
Power of Buyers
The services and products can be availed from any store. So, the power of the buyers is
high if the focus is given to the products available in the market. It is seen that it is considered as
free as people are availing the services and products easily from the market.
Threat of substitute
It is seen that high rate of substitution is there and the customers can easily substitute the
products if they are not satisfied with the products. The customers have variety of products to
choose from and they select the product which is of less prices and good.
PESTLE ANALYSIS
This analysis is helpful for the company so that the activities can be conducted in an
effective manner. It is seen that this analysis help to analyze the overall macro environment and
also the support is given is considered by the management when a proper evaluation is done
through this analysis. On this development tool, the focus is given by managers so that proper
evaluation can be made of the market in a proper manner (Yüksel, 2012).
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This development tool depend on various factors like Political factor focuses on the
overall rules and regulations which are given by the company so that activities can be conducted
in a proper manner. Technological factor focuses on the latest technologies available in the
market. Economic factors depends on the price inflation and deflation. So, these factors help to
accomplish goals and objectives of the company (Obeidat et al., 2015).
Example of Apple
It can be analyzed that the policies of the government which are imposed give impact on
the overall cost which is related to the overall tax and also manufacturing. By measuring the
prices the customers purchase the products. Apple also focuses on the likes and dislike of the
customers and according to that only the products are introduced in the market. It is one of the
socio-economic factors on which the company give more focus so that activities can be
conducted effectively. Apple has an issue related to the environment in disposing of the products.
SWOT Analysis
This tool help to conduct proper planning so that goals and objectives can be achieved in
a proper manner (Grant, 2016). It can be analyzed that this tool is considered by the manager of
the company so that activities can be conducted effectively. It can be analyzed that strength
focuses on the overall marketing mix of the company and it is important for the company to
maintain strength in a proper manner (Lee, Yoo, and Kim, 2016). The threat can be related to the
increase in the competition level and weakness is related to lack of loyalty to the company.
Opportunities focus on the growth of the company. This is an important tool which is helpful to
survive in the market.
Example
By giving emphasis on Toyota it is analyzed that the strength of the company is the good
image in the market. It is one of the largest company with a good image in the market. The
opportunity which is available for the company is to enhance the good image by focusing on the
advertising and promotion of the operations. The weakness of the company is that the company
advertising process is not so effective. This tool is considered by the organization so that
operations can be completed in a proper manner. There are many competitors in the market who
are giving impact on the profits.
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References
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E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Hjaila, K., Puigjaner, L., Laínez, J.M. and Espuña, A., 2017. Integrated game-theory modelling
for multi enterprise-wide coordination and collaboration under uncertain competitive
environment. Computers & Chemical Engineering, 98, pp.209-235.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Lee, S., Yoo, S. and Kim, D., 2016. When is servitization a profitable competitive
strategy?. International Journal of Production Economics, 173, pp.43-53.
Obeidat, M., North, M., Richardson, R., Rattanak, V. and North, S., 2015. Business intelligence
technology, applications, and trends. International Management Review, 11(2), p.47.
Pervan, M., Curak, M. and Pavic Kramaric, T., 2017. The Influence of Industry Characteristics
and Dynamic Capabilities on Firms’ Profitability. International Journal of Financial
Studies, 6(1), p.4.
Porter, M.E. and Kramer, M.R., 2018. Creating shared value. In Managing Sustainable
Business (pp. 327-350). Springer, Dordrecht.
Salavou, H.E., 2015. Competitive strategies and their shift to the future. European Business
Review, 27(1), pp.80-99.
Yüksel, İ., 2012. Developing a multi-criteria decision making model for PESTEL
analysis. International Journal of Business and Management, 7(24), p.52.
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