Holmes Institute: Competitive Strategy Tools Analysis Essay

This essay provides a comprehensive analysis of three key strategic development tools: SWOT analysis, PESTLE analysis, and Porter's Five Forces. It begins with an introduction emphasizing the increasing importance of competition and the role of strategic tools in understanding the business environment. The essay delves into SWOT analysis, explaining its use in assessing internal strengths and weaknesses, as well as external opportunities and threats, with examples such as Woolworths. Following this, PESTLE analysis is examined, detailing its application in monitoring macro-environmental factors, including political, economic, social, technological, environmental, and legal factors, with a Woolworths example. Finally, the essay discusses Porter's Five Forces model, illustrating how it helps in understanding competitive rivalry, the bargaining power of suppliers and consumers, and the threats of new entrants and substitutes, with examples such as Under Armour. The conclusion summarizes the value of each tool in making strategic decisions, emphasizing the importance of conducting these analyses with specific goals in mind.

Running Head: STRATEGIC DEVELOPMENT TOOL 0
Competitive strategy

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Introduction
It is true that competition has increased largely. Several business models are there that helps
the business in knowing the environment of the organisation. Among all the strategic tools,
some of the tools plays a significant role. SWOT analysis is one such tool that is most
popular among the strategic analysis model. It helps in providing the better understanding
regarding the internal as well as external business environment. As compare to this, Pestle
analysis is also used for searching the external environment where the organisation exists
(David, David and David, 2017). It proves to be the useful tool for knowing the political,
economic, social, technological, environmental as well as legal environment where the
organisation is operating. At the end, porter’s five forces has been discussed. It helps the
business in determining the attractiveness of the market as well as competitive intensity.
First strategic model: SWOT analysis
A SWOT analysis helps the business to look for the internal as well as external factors that
can affect the business. Internal factors means the strength and weakness. As compare to this,
external factor includes the opportunities and threats (Phadermrod, Crowder and Wills,
2019). It is a useful tool for the strategic planning and brainstorming. It assists the business
by knowing which areas are working best in the organisation. it provides the business a sense
of competitive advantage. by finding the several ways, businesses uses more innovative ways
to work on its strength. In order to find out the strengths, businesses examine the unique
selling positions, communication methods, marketing campaigns, sales as well as current
standing of the products (Gürel and Tat, 2017). Weaknesses are those features that put the
business in that situation where it gives the disadvantage to others. At the time of conducting
SWOT analysis, it is essential to be real regarding the weaknesses. It is because by knowing
the real weaknesses, company is able to work properly. It also helps the business in
identifying opportunities that business can use in order to gain more profit. For example:
delay in the services to customer proved to be a problem for the organisation. this also
irritates the customers and they move to the competition. due to this, loss of customer
becomes the huge problem. Opportunities are gain by the external factors such as changes
and consumer trends in the market. By ensuring the proper swot analysis, company will be
able to understand the internal factor that in turn influence the capability of the organisation

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to take advantage of any new opportunity available. There are some threats that cause several
problems in the organisation (Jasiulewicz-Kaczmarek, 2016). It includes changes in the
government policy as well as any new marketing campaign of competitors. SWOT analysis
helps the businesses in identifying threats by depending on the strengths as well as
weaknesses. When SWOT analysis is done effectively in the organisation, it helps in making
the strategic decisions that tends to benefit the overall company. For example” Woolworths is
effectively using this tool to work on its strengths as well as minimise the weakness and
threats that it is facing in the Australia.
Second strategic model: PESTLE analysis
A PESTLE analysis is a tool that is used to monitor as well as analysis the macro
environmental factors. It puts a great impact on the performance of the organisation. This tool
is effective at the time of starting any new business. This tool is often used in the
collaboration with other business tools such as SWOT analysis and porters five forces.
PESTLE stands for the political, social, economic, social, technological, environmental, as
well as legal factors. Political factor is all about knowing the degree that a government
intervenes in the economy. it includes the political stability or instability, government policy,
tax policy, foreign trade policy, corruption as well as environmental and labour law. These
are all factors that are taken into account in order to know the attractiveness of the potential
market. Economic factors are known as the determinant of the performance of economy. it
includes several factors such as interest rates, exchange rates, consumer disposable income,
as well as inflation and unemployment rates. These are the factors that put the long and short
term impact on the company (Bock, Frank, Bergmann and Strecker, 2016). The dimensions
of the general environment tend to represents the norms, demographic characteristics, values,
as well as customs within which the business operates. It includes several factors such as age
distribution, growth rate, safety emphasis, career distribution, income distribution, lifestyle
attitudes as well as health consciousness. These factors are significant for the marketer at the
time of targeting customers. As compare to this, technological factors states the technological
innovation that can affect the operation of the business favourable as well as in favourably. It
refers to innovation level, technology incentives, technological changes, innovation level, and
the amount of technological awareness (Berisha Qehaja, Kutllovci and Shiroka Pula, 2017).
These are the factor that tend to influence the decisions regarding whether to enter or not in
the certain industries. Environmental factors have become essential due to the pollution

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targets, increasing raw material scarcity, as well as target set by the government related to the
carbon footprint. Due to this, it includes aspects such as climate, weather, as well as climate
change that affect the business of farming, tourism, insurance, as well as agriculture. It has
led the companies to get more involved in the sustainability as well as CSR. Legal factors on
the other hand include the antitrust laws, patent and copyright laws, safety laws, health laws
and consumer protection laws. By taking such analysis, companies are required to know what
is or what is not legal for undertaking the business successfully. For example: Woolworths
have to properly ensure the laws and policies that are made by the government. Similarly,
customers are also increasingly moving toward the technologies in order to purchase the
products. In order to ensure the same, it is taking several measures to bring the changes
(Roper and Hodari, 2015).
Third strategic model: Porter’s five forces
It is true that knowing competition is the best way in order to identify the threats for the
business. Porter’s five force model therefore helps the organisation in knowing competition
by breaking the five forces into different categories. Competitive rivalry is the first element in
the porter’s five force. It helps in examining how deep is the competition rivalry presents in
the marketplace. Competition is high when some of the businesses equally sell the products
as well as service at that time when industry is growing. Bargaining power of supplier is the
second force. This helps in analysing how much power presents with the supplier, this helps
the business in controlling the potential in order to raise the prices (Blancho and Cohen,
2017). Business is in better position when they know that they have huge number of supplier.
Bargaining power of consumer is the force that tends to know the power of the consumers as
well as its effect on the quality as well as price. Customers can easily switch to the other
firms when the other firms are offering them the similar product or service in the low price.
For example- In Australia, customers can easily switch to the other supermarket chain due to
the presence of several retailers. Threat of new entrant considers how difficult or easy for the
competitors to enter in the marketplace. If it will be easy for the competitors to come in the
marketplace, in such a case existing business will have the greater risk. Threat of substitute
states how much it is easy for the customers to switch from the business product to the other
competitor. The threat of substitute will be informed by the switching cost. Under Armour
faces the intense competition from Adidas, Nike as well as some other new players.

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Conclusion
In the limelight of above discussion, it can be concluded that swot analysis provides the
insight into business changes, challenges, as well as alternation. It is used in the company as a
whole. By using SWOT analysis, it can also emphasis on the new products, marketing,
launches as well as operation. Swot analysis will prove to be more valuable, if businesses will
conduct it with the specific goal in mind. As compare to this, PESTEL analysis also states the
several factors that can influence the functioning of business. it however vary from the
business to business. At the end, it is stated that porter’s five forces is discussed. It effectively
helps in knowing the competitors that are present in the environment.

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