Competitive Advantage Analysis: Strategic Management Tools Report

This report provides a comprehensive analysis of strategic management tools used to achieve competitive advantage in business. It begins with an introduction to strategic development tools, including SWOT analysis, PESTLE analysis, Porter's Five Forces model, and the Ansoff matrix, explaining their role in assessing internal and external environments and formulating effective strategies. The report then delves into each tool, providing detailed explanations and real-world examples. The Ansoff matrix is discussed, highlighting its application in product development, market penetration, market development, and diversification strategies, with a focus on Nike. Porter's Five Forces model is applied to Zara, examining the competitive landscape, including the intensity of competition, potential new entrants, supplier and buyer power, and the threat of substitutes. The SWOT analysis is used to evaluate Samsung's strengths, weaknesses, opportunities, and threats. The report concludes by emphasizing the importance of these strategic tools in helping organizations understand their environments and develop strategies for long-term success and competitive advantage. Key references from academic journals and books support the analysis.

Management
Competitive Advantage
Student’s name
8/23/2019

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Introduction
Strategic development tools mainly comprises of SWOT analysis, Pestle analysis, Porters five
force model and Ansoff matrix which helps the organization to determine the present and future
environment conditions and accordingly they set the future strategies to win over the
competition. These strategic development tools can be applied to any business types such as
small, medium, large, which help in creating and generating the future planning tools to generate
success for longer period of time. These tools basically highlights about the internal as well as
external environment which in future helps the company to set its strategies accordingly and
further leads to the success and increment in reputation of the organization in long run (Cadle,
Paul, & Turner,2014).
Ansoff matrix
Ansoff matrix is one of the strategic development tools, which helps the companies for looking
more opportunities to grow and helps in generating more of income for the business through the
expansion of the new products and the services or by selecting into the new market. Hence, this
strategy helps the company to evaluate the market opportunities to increase or leads to an
increment in sales by adoption of alternative combinations for the new market (Ansoff, et al,
2018).
Product development strategy of Nike highlights about the innovation applied through the new
designs for shoes and related products. New technologies help in augmenting the product and
helps in facing the future competition. In this aspect, Nike applies differentiation generic
competitive strategy through product innovations. In order to upsurge the market share of Nike
they use through innovative technologies to design their sport shoes, apparel and equipment’s.
Market penetration strategy helps the business to grow by sales revenue in the existing
markets. As this, strategy helps in empowering Nike to apply the market penetration strategy on
the basis of product affordability. This strategic approach helps Nike to market presence by
growing the number of authorized retailers. Moreover, certain financial objectives in relation to
this strategy help Nike in increasing the sales revenue in the current market (Darroch, 2014).

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Market development strategy facilitates the business’s growth by majorly aiming the new
market as well as the new market segments, In this, companies tries to invest in novel
technologies to settle into a new marketplace, new segment. In terms of Nike, they apply the
differentiation strategy, which aids the business to enter into new market based on product
desirability. Now, Nike on this basis tries to enter into Africa as well as Middle East companies
to generate more success.
Diversification strategy mainly highlights about the development of the new businesses to
achieve growth. Nike in this concern, do support this strategy by introducing apparels and sports
equipment’s. At initial, Nike only was dealing in sport shoes. Such diversification from shoes to
clothes leads to the success of the organization in log run. Moreover, this growth strategy is to
advance the financial risks by entering into the other businesses (Ansoff, et al, 2018).
Porter five force model –
Porter five-force model is the strategic development tool, which is applied by the organization to
determine the intensity of the competition in the industry and to judge the profitability level of
the organization. It mainly comprises of threat to new entrant, threat of substitutes, bargaining
power of the suppliers and the buyers and lastly, threat of competition (Chapman, 2011)
Competition in industry- The biggest competitor of Zara is Forver21, gap and H and M.
However, Zara supply chain model is super receptive. Other brand mainly takes around months
to launch its products but Zara in this context responds speedy to the continuously varying
fashion needs and put forward the new clothing in every two weeks.
Potential of new entrant into business is higher in terms of Zara because of the fast developing
fashion trade and clothes with the affordable prices with the higher quality. However, in the case
of Zara the brand equity of the firm and its sales sequence makes them to earn more reputation
and attracts customers according to the changing trends. The main benefit to Zara that they build
their real estate business at the major locations for it outlets. Hence, in this perspective risk to
Zara is comparatively low than to its competitors (Van Vught, & Huisman, 2014).

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Bargaining power of the suppliers mainly highlights about the suppliers power. In this context,
the dullness of the supplies from the suppliers further reduces their power as they are intensely
reliant on on the clothing industry from taking their further operations. Zara bargaining power of
the supplier is higher because of the big brands tend to establish relationships with the other
suppliers which having a great knowledge about the product and its quality.
Bargaining power of the customers mainly depicts about the customers purchasing habits,
irrespective of any fashion statements made by the particular brands. In terms of Zara, many
loyal customers genuinely wait for the newer stock. As the limited stock adds up the excitement
level to the customers and hence, such aspect highlights that Zara has low or moderate
bargaining power of the customers and they do not switch easily and hence, this majorly affects
the sale of the Zara (Johnson, et al, 2011)
Threat of substitute products mainly highlights the information about the other brands,
Moreover, H &M, forever21 are the main competitor of Zara as other brands also do carry
quality along with the affordability. Nevertheless, in comparative to Zara, other brands mainly
focus on advertising aspect and take advantage at large. In terms of threat of substitute, Zara
again have moderate effect by the other brand as Zara has certain uniqueness for which
customers do wait to purchase (Franca, et al, 2017).
SWOT analysis
SWOT analysis is also one of the finest management development tools, which mainly highlights
about the strength, weaknesses which display about the internals aspect of the organization. In
addition, at the same time it highlights about the opportunities and threat, which mainly
highlights about the external aspect of the organization. Hence, in this entire tool helps in
identifying the internal strength and weaknesses as well as external opportunities and threats
(David, & David, 2013)
In terms of Samsung, Strength of it highlights that; the foundation of Samsung is always been
innovative. As Samsung, company in this aspect had a wide range of product portfolio among
the competitors. Along with this, it is one of the award-winning brand which mainly applies
innovation through its environmentally friendly innovations. Now it is also seen that Samsung

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has appeal across all the business lines. Samsung has its strong brand image and reputation
internationally this is all because of the environmentally friendly innovations (López-Nicolás, &
Meroño-Cerdán, 2011)
Weaknesses of Samsung highlights that they are majorly dependent over the American markets.
As American in this context is very unpredictable and Samsung revenues in Jeopardy can
majorly damage its operational resources. Along with this, Samsung has the highly diversified
portfolio with which brand fails to create its own identity in the minds of the customers. Lastly,
in recent time it is seen that there is a decline in the Samsung smartphones in china due to price
sensitivity. Therefore, they started focusing in India more but this strategy will not be able to
produce more successful results for longer time.
Opportunities of Samsung highlights that they can think of expanding them with more innovate
techniques and latest features and along thinks of expanding to the new geographies, which will
definitely, leads to the success of the organization in long time period. Other than this, they can
also work over the enhancement of the technological aspect in order to win the heart and mind of
the ultimate customers so that they purchase more and this leads to the success of company.
Lastly, the company should target the middle class segment as they are growing more. As they
need to come up with the new segment which helps them in bringing the next big wave for the
product demand.
Threats to Samsung, mainly highlights about the high competition in the market and the most
basic and the strongest competitor of Samsung is Apple Inc. this is because apple on the regular
basis is outperforming by launching its innovate products every year and also became the best
technology company. Other than this, legal and regulatory threat is the major issue, which,
mainly highlights that every rule of every country differs from one another. And these strict
regulations cause a major hindrance in the working operations of the company and sometimes
also leads to failure in the results and similarly this particular situation is faced by Samsung
many a times (Hitt, Ireland, & Hoskisson, 2012)

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Conclusion
From this above report, we can conclude that strategic management tools are the most important
aspect for the company as these tools helps the organization to know more about the internal as
well as external environment and accordingly the company set their strategies so that they also
can lead to competitive advantage and further win over their competitors. These tools can be
pestle analysis, porter five-force model, or SWOT analysis or Ansoff matrix. These tools in short
helps the company to get knowledge about the environment and further helps in deciding best
suited strategies to generate success for longer time period.

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References
Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., & Ansoff, R. (2018). Implanting
strategic management. Springer.
Cadle, J., Paul, D., & Turner, P. (2014). Business analysis techniques. Chartered Institute for IT.
Chapman, R. J. (2011) Simple tools and techniques for enterprise risk management (Vol. 553).
John Wiley & Sons.
Darroch, J. (2014). Ansoff’s Growth Matrix—In Detail. In Why Marketing to Women Doesn’t
Work (pp. 131-147). Palgrave Macmillan, London.
David, F. R., & David, F. R. (2013) Strategic management: Concepts and cases: A competitive
advantage approach. Pearson.
Franca, C. L., Broman, G., Robert, K. H., Basile, G., & Trygg, L. (2017). An approach to
business model innovation and design for strategic sustainable development. Journal of Cleaner
Production, 140, 155-166.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2012) Strategic management cases:
competitiveness and globalization. Cengage Learning.
Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regner, P. (2011) Exploring strategy.
Financial Times Prentice Hall.
Lopez-Nicolas, C., & Merono-Cerdan, Á. L. (2011) Strategic knowledge management,
innovation and performance. International journal of information management, 31(6), 502-509.
Van Vught, F., & Huisman, J. (2014). Institutional profiles: Some strategic tools. Tuning Journal
for Higher Education, 1(1), 21-36.