HI6006 Competitive Strategy: Tools and Business Applications Essay

This essay provides a comprehensive analysis of three key competitive strategy development tools: SWOT analysis, Porter's Five Forces framework, and Porter's generic framework. It begins by defining SWOT analysis and illustrates its application with an example from Amazon, detailing the company's strengths, weaknesses, opportunities, and threats. The essay then explores Porter's Five Forces model, using Apple Inc. as a case study to examine the competitive forces within the industry, including the threat of new entrants, bargaining power of buyers and suppliers, threat of substitutes, and industry rivalry. Finally, the essay discusses Porter's generic strategies—cost leadership, differentiation, and focus—using Samsung as an example to illustrate the application of these strategies. The conclusion emphasizes the importance of these tools for assessing a company's position and ensuring successful future business operations.

Running head: COMPETITIVE STUDIES
Competitive Studies
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The modern and successful businesses across the world makes strategy analysis as an
approach for facilitating, analysing, researching and mapping the abilities of theirs for
achieving a future envisioned state on the basis of the present reality (Paternoster et al. 2014).
They take into consideration all the important aspects like the organisation’s processes,
business development, people capabilities and technologies in this regard. Numerous strategy
tools are used for this purpose and some of the examples include PEST & PESTLE analysis,
Porter’s Five Forces, Benchmarking, BCG (Boston Consulting Group) matrix, Value Chain
analysis, and VRIO analysis. SWOT analysis etc. This essay shall elaborate on explaining the
three major competitive strategy development tools that are used in the modern businesses
and would assess how they use them. The three chosen tools for this purpose are SWOT, Five
Forces and Porter’s generic framework.
The SWOT framework- It is to note that SWOT analysis comprises of a portrayal
and collection of the details and information regarding the internal and external factors that
have, or might have a significant influence on the organisational business (Gurel and Tat
2017). It is an acronym that stands for Strengths, Weaknesses, Opportunities and Threats. It is
to mention that both the strengths and weaknesses are internal to an organisation and could be
directly managed by it and the opportunities and threats are external and they can only react
and anticipate to them. However, below is mentioned an example of SWOT analysis for the
company- Amazon.
a) Strengths- It is to note that strengths are the factors that provide an edge for an
organisation over its competitors. Amazon has successfully gained a very strong and
positive brand image and brand awareness, which is considered to be a significant
strength for it (Wheeler 2017). Also, the business diversification by Amazon is yet an
important factor that is directly related to the very strong position that is gained by it.
With the same, the company have involved in online retail marketing and at the same

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time, the technical innovation that the company has adopted are helping the organisation
to support its long term organisational growth. It allows the organisational managers to
synthesize their insights that they have gathered from the internal analysis of the strengths
and weaknesses of the company along with those from the analysis of the threats and
external opportunities present.
b) Weaknesses- Weaknesses on the other hand, are the harmful aspects of the organisation
that can be used against it by its competitors. Amazon has formed a business model,
which is imitable in nature and it could have a significant influence on its competitive
advantage. Also, according to Albino et al. (2014), the penetration of the company in the
developing countries is quite low. The retailers of the firm provide high competition
levels and they influence the revenue level of the company.
c) Opportunities- Opportunities refer to the favourable situation that could bring a
competitive advantage. It is to note that Amazon has the opportunity of expanding its
business and influence in the developing economies (Lazzarini 2015). Having a proper
expansion of its brick-and-mortar operations is regarded as a significant opportunity for
the business growth of the company. It can even engage in partnership with some
influencing organisations in the emerging markets.
d) Threats- Threats are the unfavourable one that could negatively influence the business.
For Amazon, the highly aggressive levels of competition present in the online retailing
industry is a significant weakness that the company faces. With the same, cybercrime has
a strong influence on the process of payment that are used by the customers (Holt and
Bossler 2014). It is also a significant threat for the organisation.
Porter’s Five Forces Framework- The five forces model proposed by Michael
Porter is an important analysis tool that makes use of five industry forces for determining
how intense is the competition within an industry as well as its level of profitability

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(Mathooko and Ogutu 2015). These five forces are- 1) threat of entry, 2) bargaining power of
buyers, 3) threat of substitutes, 4) bargaining power of the suppliers and, 5) industry rivalry.
These five forces helps in determining the industry structure as well. The stronger the
competitive forces are within the industry, the lesser profitable they are for the company.
Below is mentioned an example of Porter’s five forces analysis for the company- Apple Inc.
a) Threat of entry- There is a low threat from the new manufacturers of the phones and
personal computers for the company. Also, the existing rivalries and competitors present
in the industry are very high and they are developing new products for matching Apple.
b) Bargaining power of buyers- There is low switching cost and this means that it is very
easy for the customers of Apple to switch from it to the other brands on the basis of
accessibility, function, price or any other related concerns. However, every customer’s
purchase is small compared to the total revenue of the company. The five forces
framework showcases that it is the condition that makes the buyers weak at individual
level (Sedikides and Campbell 2017). Notwithstanding this fact, the presence of a detailed
comparative information regarding the competing features of the products empowers the
customers for shifting from one provider to the other.
c) Threat of substitutes- There are certain substitutes to the products of Apple that are
readily present in the market. For instance, instead of using the iPhones, people could
make use of digital cameras for taking pictures and the landline phones for making calls.
However, there are many customers who make use of the Apple products for convenience
and the advanced technological functions that they have.
d) Bargaining power of the suppliers- It is to note that the global size of Apple Inc. for
accessing the suppliers all around the world. High number of suppliers is considered to be
an external factor that presents only a weak to moderate force against the firm. With the
same, the ratio of company concentration to the supplier concentration limits down the

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power of the suppliers and influence in the industry (Froud et al. 2014). This further
reflects the presence of companies like Samsung and Apple, in contrast to huge number
of big and the medium sized suppliers.
e) Industry rivalry- the company faced a very strong force of competitive rivalry. It is the
component of the five forces analysis model and it determines the intensity of the
influence that the competitors have on every other. In case of Apple, this influence is
dependent on some external factors including low differentiation of products, very low
switching cost and the high aggressiveness of the company. The companies such as LG
and Samsung are aggressively competing with Apple. This aggressiveness, observing
rapid innovation, imitation and the aggressive advertising, all impose a very strong force
in the environment. Also, there are many apps that are present for the iOS and android
users from the other companies as well.
Porter’s generic framework- it is to note that this framework has a significant
contribution to the process of development of the management literature (Shaw and Goodrich
2014). There are a total of three generic strategies that could be used by an organisation on
the basis of its needs as well as the needs of the industry in which it operates and they are- the
cost leadership strategy, differentiation strategy and the focus strategy. Below is mentioned
an example of Porter’s five forces analysis for the company- Samsung.
a) Cost leadership strategy- it is to note that cost leadership strategy is based on the
different ways in which a firm aims towards gaining a competitive edge by means of
setting low prices of its services or products (Moon et al. 2014).
b) Differentiation strategy- this strategy is based on the development of some key
differentiation of the company products and services for maintaining a strong position
in the industry. They can be based on the levels of benefits as well as the quality of
the products that are given to the customers. It is to note that Samsung has

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implemented a broad differentiation strategy in order to offer services and products to
the customers. its premium quality products are able to play a significant role in the
growth and development of the firm’s position among the customers. This also helps
Samsung to maintain its customer base for long term. This strategy has also helped
the company to focus on the major features of the products instead of concentrating
on their prices.
c) Focus strategy- It is based on focus of the company on its products and services for
different types of customers (Michel, Destandau and Elfakir 2014). It could also be a
wise mixture of two different types of generic strategies introduced by Porter.
Hence, from the above analysis it is to conclude that among the among mentioned three
tools of strategy analysis, SWOT framework as well as the Porter’s five forces framework is
the most useful one to take into consideration for developing competitive strategies and to
lead the industry. Companies first need to assess the strengths and weaknesses it possess
while being aware of the opportunities and threats and then, must use of the Porter’s five
forces analysis for assessing the industry environment in order to ensure successful future
business operations.

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