Competitive Strategy Essay: Ansoff, PESTEL, and Five Forces Analysis

This essay delves into the realm of competitive strategy, offering a detailed examination of crucial models such as PESTEL, Ansoff Matrix, and Porter's Five Forces. It begins by highlighting the increasing challenges businesses face in maintaining sustainability due to market saturation and the necessity of adopting strategies to gain a competitive edge. The essay provides a comprehensive discussion of the PESTEL framework, analyzing how political, economic, social, technological, environmental, and legal factors impact business performance. It then explores the Ansoff Matrix, illustrating how organizations can leverage market penetration, market development, product development, and diversification to drive growth. Furthermore, the essay dissects Porter's Five Forces model, examining the influence of new entrants, suppliers, buyers, substitutes, and industry rivalry on a company's competitive landscape. Practical business examples are integrated throughout the analysis to illustrate the application of these strategies in real-world scenarios, providing valuable insights for business development and strategic planning.

Running Head: COMPETITIVE STRATEGY
[Type the company name]
Competitive strategy
Essay
Student Name
[Pick the date]

COMPETITIVE STRATEGY 1
Introduction
Due to entry of a large amount of company within the same business market, it has become very
difficult for the organization to remain sustainable for a long duration. In this situation, it
becomes very essential for the organization to adopt such competitive strategies which will help
them to attain a competitive advantage over other organization present in the business market
(Aydiner et al., 2019). Some of the important competitive strategies adopted by various
organizations are Resource-Based View, PESTEL, PROFIT, Ansoff, Generic Strategies, Porters
five force model and SWOT analysis. With the help of these competitive strategies,
organizations are able to gain the advantage related to the existing market. PESTEL analysis
offers important opportunity to understand the external business factors which can directly
impact the performance of the business. While porters five forces help in exploring the forces
which tries to pressurize on the business operations. Ansoff matrix offers various opportunities to
the enterprise to enter in the market in order to generate relative growth.
Ansoff matrix
This model is used by organization related to business expansion in order to gain growth. It
consists of four stages.
Market penetration
In marketing penetration stage, organization tries to enter into existing market related to their
existing product in order to expand their business growth. This model is adopted to create a
survival platform for the organization (Onodera and Sengoku, 2018). Example, Automobile
Industry includes various organizations which are fighting for the same market share and to
remain sustainable organization implement this strategy to gain advantage in the existing
business market. In a similar way, Audi adopts this strategy to remain focused on their business
share in the present market in the form of creative thinking.
Market development
In market development stage is the second stage in which organization focuses on exploring new
market regarding their existing product. In this stage, organization intention is to find out a new

COMPETITIVE STRATEGY 2
market for their running product (Kaar and Stary, 2019). This kind of model is mainly seen in
clothes industry such as Tommy, Levice, Duke which has already a well-known market in the
country but just for attaining growth, they adopt expansion policy to spread their operation on the
international level in order to build a strong customer base.
Product development
In product development stage, organization focuses on introducing a new product in their already
established market so that they can increase their market share. Organizations are well aware that
a product cannot remain sustainable in the market for a long time and therefore it becomes
compulsory for organizations to introduce new features in their products in order to control the
customer flow towards the organization (Ćuzović, Sokolov Mladenović, and Ćuzović, 2019).
One of the best examples is Samsung which beliefs in future by introducing their innovative
product in their existing business market in the form of smart touch keys, smart curtains, and
smartphones.
Diversification
In Diversification stage, organization intention is to explore a new market with the help of their
innovative product to remain sustainable in the business environment. This kind of model is
mainly adopted by LG Company because they believe that if they are not going to develop
innovative product some other will and at time it will not be possible for them to compete with
them. Therefore they have segmented their business operations in various form various such as
retail, electronics, insurance and so on.
Porters five force model
Threat of new entrants
In existing market when a new company enters with their new technology and capabilities it
automatically creates a threat like an environment for the existing companies in the market. In
this situation, it becomes very important for the existing organizations to develop a barrier in the
market with the help of their unique strategy (Baxter, 2019). Creating barrier in the market
ensures that new firm while entering the market will face a lot of difficulties and may not impact

COMPETITIVE STRATEGY 3
their business operations of existing enterprises in the market. One of the best examples is Apple
which has created barrier in their target market with the help of their innovative and creative
products.
Bargaining power of suppliers
This force is connected with the hold of the suppliers in the present market which offers them the
opportunity to regulate price as per their requirement. If number of suppliers present in market is
huge then, hold of the suppliers decrease because organization has the option of switching other
supplier and vice versa (Gautam et al., 2019). One of the examples is Airline industry in which
number of suppliers are very less because of which Boeing company has the power to regulate
the price as per their requirement and customer has no other option just to expect it.
Bargaining power of Buyers
It helps in exploring the hold of the customer on the product price and has the ability to
compression the suppliers to decrease their profit margin by lowering their product price. In this
situation, either customer has a lot of option for related products or they are in large number
which offers them top position on the negotiation table in the business market (Hafezi et al.,
2019). But if companies are in limited number then it will not be possible for buyers to create
any kind of pressure related to the product price. One of the best examples is Bentley Company
which offers high-quality luxury cars in the market and has full control over price in their
business market.
Threat of substitute
It has often seen in the market that if product price increases, customers start moving towards
substitutes which are available in the market within low price. This creates uncertainty in the
business environment for the marketers which are operating their business for generating profit
margin (Amelia et al., 2019). In situation, organization must understand the expected market
price of their product and then introduce their product in the market because if their product price
is high than market expectation, then customer is going for substitutes.
Rivalry within industry

COMPETITIVE STRATEGY 4
This force is linked with the amount of competition within the industry because organization is
fighting with in the same market which impacts the profit margin share present in the market. It
is also connected with the ability of the organization to hold their better position in the existing
market. In this situation, many organizations make use of digital marketing platform to promote
their product in the market which offers them both cost and effort benefits. One of the best
examples is Adidas which make use of digital marketing to promote their business in the market
by attracting various customers.
PESTEL
Political factors
This element is mainly connected with the stability of the government in the country and their
relatives hold on business activities. It is considered as one of the most important factors for
doing business in that particular country because political factors are directly linked with the
policies such as foreign trade, corporate taxes, laws related to environmental protection and so on
(Tsangas et al., 2019). One of the best examples is the United Kingdom, which is offering great
support to business activities with the help of their support policies.
Economic Factors
Economic factors are linked with the economic performance of the particular market which is
considered as one of the important aspects of business growth. It includes aspects like interest
rate, per capita income and so on. Business is directly influenced by these factors because it
either increases or decreases the buying power of the customer which impacts the supply flow of
the product (Fernandes, 2019). One of the biggest examples is Microsoft, which is the biggest
economic power of the business market. Strong economy of Microsoft attracts the investors
towards this organization in order to attain sustainable growth.
Social factors
It explores the relation of business with the general environment by including elements such as
rule, religion, values and other demographic aspects which plays a significant role in
organization growth (Wurthmann, 2019). In addition, it also involves other important aspects

COMPETITIVE STRATEGY 5
such as lifestyle, restriction related to target customer, increasing population rate and so on. It
helps in connecting business with local environment of that country. One of the best examples is
China; its social factors help the organization to expand its business by connecting requirement
of local environment with the business operations.
Technological factors
It helps in exploring the relation of innovation with the market which is known as lifeline of the
present business requirements. In addition, it also helps in exploring the competitive advantage
which can help the organization to remain sustainable in the market (Turkyilmaz et al., 2019).
One of the best examples is Apple which offers a huge amount of technical support to the
enrolled business by offering a better opportunity for decision-making abilities. Technology
factors help in creating advance features in the process which provides ignite to the decision
making by offering them the ability to bring effectiveness in their operating process. In addition,
innovative technology helps organizations to attain cost-effectiveness in business operations.
Environment factors
It helps in exploring the fall in the scarcity raw materials level. In addition, it is also linked with
the rise in carbon footprints in the environment because of business operations. It involves direct
involvement of all the important environmental aspects which impact the success of the business.
One of the best examples is Toyota hybrid which has strict the business operations of the
organization which are related to carbon mission release.
Legal factors
Legal factors are linked with the rules and regulations of trade-related to a particular country
such as consumer protection, free trade agreement, copyright laws and so on. One of the best
examples is Honda which restricts the law related to copyright in order to support fair business
market.

COMPETITIVE STRATEGY 6
Conclusion
Due to globalization, it has become very important for all the organization to introduce some
unique strategy in their operations in order to remain sustainable in the business environment and
therefore they make use of competitive strategies such as Pestle, Swot analysis, PROFIT and so
on. PESTEL analysis helps the organization to explore the aspects which are important for
business growth while operating on foreign soil such as political factors, taxes polices, free
trades and so on. Porters five forces strategy helps the organization in developing their preplan
their approach while fighting again the forces which want to create uneasy environment for the
business operations. While Ansoff matrix helps the organization to understand the steps which
can offer them necessary opportunity to enter in the existing market with their new and existing
products which can offer better results. These strategy aids the organization to develop a strong
base in the market which can helps them to gain maximum market share.

COMPETITIVE STRATEGY 7
References
Amelia, D., Murni, I., Putri, A., Badri, J. and Johan, H. (2019) A Study of Clothing Industry
Competitiveness with Porter’s Five Force Approach in Kabupaten Agam Central Industry (A
Preliminary Study of Ampek Angkek, Banuhampu, Sungai Puar). KnE Social Sciences, pp.169-
185.
Aydiner, A.S., Tatoglu, E., Bayraktar, E., Zaim, S. and Delen, D. (2019) Business analytics and
firm performance: The mediating role of business process performance. Journal of Business
Research, 96, pp.228-237.
Baxter, G. (2019) A Strategic Analysis of Cargolux Airlines International Position in the Global
Air Cargo Supply Chain Using Porter’s Five Forces Model. Infrastructures, 4(1), p.6.
Ćuzović, S., Sokolov Mladenović, S. and Ćuzović, Đ. (2019) THE IMPACT OF SOCIAL AND
CULTURAL FACTORS ON SUCCESS OF TRADE INTERNATIONALIZATION. Poslovna
izvrsnost: znanstveni časopis za promicanje kulture kvalitete i poslovne izvrsnosti, 13(1), pp.57-
76.
Fernandes, J.P. (2019) Developing viable, adjustable strategies for planning and management—
A methodological approach. Land use policy, 82, pp.563-572.
Gautam, S., Sharma, N.L., Gautam, B. and Gautam, D.K. (2019) Strategic Analysis Models and
Strategic Analysis for Edible Oil Industry. International Journal of Research and Analytical
Reviews E-ISSN, pp.2348-1269.
Hafezi, R., Akhavan, A., Pakseresht, S. and Wood, D.A. (2019) A Layered Uncertainties
Scenario Synthesizing (LUSS) model applied to evaluate multiple potential long-run outcomes
for Iran's natural gas exports. Energy, 169, pp.646-659.
Kaar, C. and Stary, C. (2019) Intelligent business transformation through market‐specific value
network analysis: Structured interventions and process bootstrapping in
geomarketing. Knowledge and Process Management, 26(2), pp.163-181.
Onodera, R. and Sengoku, S. (2018) Innovation process of mhealth: an overview of fda-
approved mobile medical applications. International journal of medical informatics, 118, pp.65-
71.
Tsangas, M., Jeguirim, M., Limousy, L. and Zorpas, A. (2019) The Application of Analytical
Hierarchy Process in Combination with PESTEL-SWOT Analysis to Assess the Hydrocarbons
Sector in Cyprus. Energies, 12(5), p.791.
Turkyilmaz, A., Guney, M., Karaca, F., Bagdatkyzy, Z., Sandybayeva, A. and Sirenova, G.
(2019) A Comprehensive Construction and Demolition Waste Management Model using
PESTEL and 3R for Construction Companies Operating in Central Asia. Sustainability, 11(6),
p.1593.

COMPETITIVE STRATEGY 8
Wurthmann, K. (2019) The essential mix: six tools for strategy-making in the next
decade. Journal of Business Strategy, 40(2), pp.22-33.