Holmes Institute HI6006 Competitive Strategy: Strategy Tools Essay

This essay provides a comprehensive analysis of competitive strategy, focusing on four key models: SWOT, PESTEL, Ansoff's Matrix, and Porter's Five Forces. It begins with an introduction to strategic development tools, emphasizing their role in business planning and adaptation to market dynamics. The essay then delves into each model, explaining their frameworks and applications. Porter's Five Forces is examined for its ability to assess market attractiveness and competitive intensity, with a specific analysis of Walmart. PESTEL analysis is used to identify macro-environmental factors, including political, economic, social, technological, legal, and environmental influences, again illustrated with Walmart's context. Ansoff's Matrix is explored for its product and market growth strategies, also applied to Walmart's business decisions. SWOT analysis is presented to assess internal strengths and weaknesses alongside external threats and opportunities. The essay concludes by emphasizing the importance of these strategic tools for business success, offering a practical understanding of how they can be used to analyze and improve competitive positioning. The essay uses Walmart as a case study throughout, demonstrating the practical application of these models.

Running head: COMPETITIVE STRATEGY
Competitive Strategy
Name of the Student
Name of the University
Author note

1COMPETITIVE STRATEGY
Introduction
Strategic development tools are defined as the strategic planning which is
fundamental for creation along with running the business in an appropriate manner. It is
described as the game plan which helps in setting specific goals along with objectives and the
companies are able to change in response to the shifting dynamics of market. The different
tools which will be analyzed in the essay includes SWOT, PESTEL, Ansoff’s matrix along
with Porter’s Five Forces Model Analysis.
Porter’s Five Forces Model Analysis
As per the respective model, there are different five forces which is helpful in
determining the competitive attractiveness as well as intensity of the market. It helps in the
overall identification of where the power lies in the business-related situation. It is helpful in
understanding whether the new products or the services are potentially profitable for the
business in the competitive market (Ansoff et al. 2018).
Supplier Power- It is the assessment of how easy it is for the different suppliers to
drive up the prices of the products. It is inclusive of uniqueness of products along with
switching cost from one supplier to other.
Bargaining Power of Buyers- It is defined as the assessment of analysing how easy it
is for the different buyers to drive the different prices down. The different aspects include
importance of individual buyer in the organization.
Competitive Rivalry- It is the other driver wherein capability and number of
competitors are analyzed in market. There can be different kinds of competitors present in the
market which will be offering undifferentiated products which can reduce attractiveness.

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Threat of Substitution- It is inclusive of increasing the likelihood of the different
customers switching to different alternatives as they can receive similar products from them
at lower prices.
Threat of New Entrants- The different profitable markets attract new entrants which
will be eroding profitability and it will be leading to decline in the rate of competitiveness.
For instance- Porter’s Five Forces Model Analysis of Walmart
Competitive Rivalry
High aggressiveness of other retail firms is strong force
Huge variety of retail firms is strong force (Walmart.com 2019)
Bargaining Power of Buyers
Huge Diversity of consumers is weak force
Large number of customers is weak force
Bargaining Power or Suppliers
High availability of supply is weak force (Walmart.com 2019)
Tough competition among different suppliers is weak force
Threat of Substitutes
High cost of substitutes is weak force
Low range of substitutes is weak force
Threat of New Entrants

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Low cost of performing business is strong force
Moderate cost of capital is strong force
PESTEL Analysis
It is categorized as the strategic tool which plays a major role in making the marketers
analyse the different macro-environmental factors which play a major role as it creates huge
impact on the organizations. The different kinds of external threats and opportunities are
identified with the help of the respective model.
Political- It relates to the different pressures along with opportunities brought by the
different political institutions and to what degree the different policies of government impact
the business (Petronio 2017).
Economic- It relates to the different economic policies, structures and their impact on
the entire business in both positive and negative manner (Bernstein 2017).
Social- It relates to the different cultural aspects, beliefs along with attitudes which
will be affecting the demand for the different products of the company and how the entire
business operates in the market (Jones et al. 2016).
Technological- It is inclusive of the different kinds of technological aspects such as
innovation, barriers along with incentives that can affect the overall profitability of the firm
in a negative or positive manner (Kaplan and Atkinson 2015).
Legal- It relates to the different kinds of privacy related rules and regulations of the
company which will be affecting the business operates in the market (Mahadevan 2015).

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Environment- It relates to the different ecological along with environmental aspects
which will be affecting the demand for the different products and services and how the
business operates (Kerzner and Kerzner 2017).
For instance- PESTEL Analysis of Walmart
Political
High stability in politics is opportunity (Walmart.com 2019)
Political pressure for wages is threat
Economic
Stability of major economies is opportunity
Decreased unemployment in United States of America (Walmart.com 2019)
Social
Healthy lifestyle trend is opportunity
Urban migration is opportunity
Technological
Increased automation of business is opportunity
Increasing mobile service sage among the different customers is opportunity
Legal Factors
Food safety regulations is opportunity
Tax law reforms is threat

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Environmental
Sustainability trend of business is opportunity (Fayol 2016)
Environmentally friendly products are opportunity
Ansoff Matrix
It is defined as the strategic development tool which helps the business in determining
the market and product growth strategies in an appropriate manner (Bratton and Gold 2017).
Product Development- It is suitable for the businesses wherein the different products
are required to be differentiated as to remain competitive in the market (Marti and Scherer
2016).
Market Development- It is the aspect which is suitable for the different businesses
wherein they can sell the existing products in new markets (Gond et al. 2018).
Market penetration- It is the aspect in which will be maintaining and increasing the
market share of the different current products. It mainly focuses on selling the different
existing products in existing markets.
Diversification- It is the aspect wherein business markets new products in the new
markets.
For instance- Ansoff Matrix of Walmart
Product Development- Walmart has introduced different other products other than
grocery items which will be beneficial for growth of company
Market Development- Walmart has expanded their presence internationally and it
helps them in becoming competitive (Walmart.com 2019)

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Market Penetration- Walmart has started with small discount stores in Rogers Ark
and it has helped them in increasing the market share and it will be beneficial for gaining
strong customer base
Diversification- Walmart is trying to diversify their business in selling accessories
along with clothing for customers (Walmart.com 2019)
SWOT Analysis
It is defined as the tool and the study undertaken that is beneficial in analysing the
internal strengths along with weaknesses along with external threats and opportunities present
in the market.
Strengths- It helps in analysing the different kinds of factors which can be able to
provide competitive advantage in the market appropriately. It is inclusive of different
advantages which can be gained by the organization
Weaknesses- It is inclusive of the different factors that can affect the overall
competitiveness of the firm in comparison to the other competitors present in the market.
Opportunities- It is inclusive of the various opportunities such as changes in
technology and changes in the government policy which can be affecting the business in a
positive manner (Hayes 2018).
Threats- It is the different aspects wherein the weaknesses can affect the overall
competitiveness of the firm in comparison to the other competitors present in the market
(Laudon and Laudon 2016).
For instance- SWOT Analysis of Walmart
Strengths

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Established brand image of the firm in comparison to other competitors
Technologically advanced information system
Weaknesses
High turnover of employees
Products are of inferior quality (Walmart.com 2019)
Opportunities
Walmart has opportunity to expand online store and presence
Opportunity to offer the different western goods and services
Threats
Rising commodity prices of product (Walmart.com 2019)
Major threats from competition
Conclusion
Therefore, it can be concluded that strategic development tools play a major role in
analysing the different kinds of threats, opportunities, strengths along with weaknesses which
will be beneficial for the overall success of the firm in a positive manner.

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References
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Bernstein, E.S., 2017. Making transparency transparent: The evolution of observation in
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Walmart.com 2019 Walmart.com | Save Money. Live Better (online) Retrieved from
https://www.walmart.com/ [Accessed on 26th April 2019]