Competitive Strategy: Analyzing Industries with Strategic Tools

This essay explores competitive strategy through the application of strategic tools such as PESTEL analysis, SWOT analysis, and Porter's Five Forces model to different industries. The PESTEL analysis examines the macro-environmental factors affecting the age care industry, focusing on Estia Health in Australia. The SWOT analysis assesses the strengths, weaknesses, opportunities, and threats within the childcare industry, using the Australian Childcare Alliance as an example. Finally, Porter's Five Forces model evaluates the competitive forces present in the tourism industry, with reference to the Australian Tour Company. The analysis highlights the importance of these strategic tools in understanding the business environment and formulating effective strategies for organizational success. Desklib offers a wealth of similar solved assignments and study resources to aid students in their academic pursuits.

Running head: COMPETITIVE STRATEGY
COMPETITIVE STRATEGY
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In the current business environment, the business management put major emphasis on its
strategic plan. The essay aims to throw light on the value of all the strategic tools. In the essay,
PESTEL analysis, SWOT analysis tools and the Porter`s Five Forces Model would be used to
discuss the different industries at the macro environmental level.
PESTEL analysis for Age care Industry
PESTEL analysis is a widely used competitive tool that includes the crucial factors.
These include the political, economical, social, technological, legal and environmental factors.
PESTEL analysis helps in providing details about the challenges that a company would face in
the prevalent macro environment conditions of any country. For the purpose of understanding the
Estia health care agency which is one such wellness and age care centre situated in Australia will
be chosen for analysis (Estia Health.2018).
Political factors: this plays a significant role in determining the effect of political factors
on age care industry’s profitability for long-term. Political stability is highly important for the
success of an organization in the nation. The aged age care industry gets impacted by various
factors that include tax legislation charges, insurances mandates and consumer protection (Zhao,
Pan and Chen 2018). Several tax policy changes can also affect the government spending for the
age care. The given company, Estia health care agency benefits from analyzing the political
factors by understanding the laws they must abide by and to conduct efficient business practices.
Economic factors: the organization is easily affected by various economic factors such
as unemployment, inflation and interest rates. With the increase in the rate of unemployment,
the firm faces major problem to provide adequate services to their client. Estia health care

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agency needs to be concerned about the political factors because it needs to understand the
economic status of the country before setting the price and other similar components.
Social factors: The social factors comprises of proper understanding of the changes in
public values and demographics. As all the communities faces different kinds of beliefs, fears
and cultural norms, an analysis of the different social factors may help a firm to understand their
potential target market and their psychology. Estia age care centre benefits from this information
and implement changes in packages offered for higher attraction from the older crowds.
Technological factors: The age care industry is improving at a rapid rate due to
technological advancements. With the help of technological development the medical devices
allows its patients to receive adequate care (Goncharuk 2016). Hence, these changing
technological factors have a huge impact on the firm as they require the Estia Health care to
change its equipments and employ the latest technology to attract a larger crowd.
Environmental factors: The environmental sustainability procedures have both financial
and environmental advantages for aged health care industry. Aged health care firms are now
using environmentally-friendly design for the centre. Estia might benefits with this information
by applying the necessary procedures for waste disposal and utilization of the environmental
friendly designs
Legal factors: The aged care industry in Australia has various laws and legal procedures.
Failure to practice such legal procedures often leads to adversely affect the overall organizational
strategy. If Estia is aware of the given components then it may conduct lawful transactions.
(Albert and Grzeda 2015).

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Hence, it may be stated that using the PESTLE analysis, an age care company like Estia
may become aware of the various external factors and conduct activities keeping in mind each of
these factors.
SWOT for Child care Industry
SWOT analysis is used to analyze the strengths, weaknesses, opportunities and threats of
the business in the real world. This tool is mostly used to ascertain the marketing strategy,
business plan and product segment. This is a powerful strategic tool is used in the business and
marketing areas (Kangas et al. 2016). The internal factors are the strength and weakness of an
industry while the external factors include opportunities and threats. SWOT analysis is a major
evaluation process that helps in evaluating the strength, weaknesses opportunities and threats of
an organization (Australianchildcarealliance.org.au. 2018). The ways in which SWOT Analysis
might beneficial an organization named Australian Childcare Allianz in Australia are given as
follows
Strengths: the major strengths of the childcare business are well qualified staffs,
recognizable name brands, proper infrastructure and adequate fees structure. Conducting a
Strength analysis helps the Australian Childcare Allianz to identifying the key performing areas
of its business. This further strengthen these factors for a competitive advantage of the firm.
(Arabzad et al. 2015).
Weaknesses: The childcare business has various competitors in the business market.
Other weaknesses include lack of experiences, small physical facility and legal and financial
issues. In Australia, for Australian Child care Allianz identification of its weakness like the

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presence of the competitors, the presence of the extra laws and legislatives goes a long way in
helping the firm to improve its operations.
Opportunities: the childcare business in the country properly review the market to obtain
the opportunities for the industry. The major opportunities for the childcare industry include
stable economy and expanding the customer base (Jensenn 2016). In Australia, for the Australian
Child care Allianz reviews the opportunities with this tool because it helps the firm to grow and
become a leader in the given market.
Threats: the threats in the childcare organization like Alliance mostly include competitors
and the immense possibility new childcare centers within the same region. The potential legal
issues can also be very costly. For Australian Childcare Allianz, threats include adequate
insurance coverage and competitor presence. In addition to this failure to comply with
Australian’s employment laws as well as licensing requirements is a huge threat.
Hence, Australian Childcare Alliance is able to analyze the various opportunities and
threats that able to succeed and assist them in forming strategies accordingly.
Porter’s five force analysis for Tourism Industry
Porter’s five force model is used to evaluate the level of competition of a particular
industry or segment (Borland et al. 2017). This consists of major five forces that are supplier
power, buyer power, threats of new entrants, substitute’s threats and competition rivalry. The
customers’ demands high quality services at affordable and low prices. The Australian Tours
company in Australia make use of the given tool to analyze the presence of factors in the
industry that have an impact on its operations (Bing.com. 2018).

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Theory of substitute goods: in tourism industry there are generally high chances for new
business start-ups. This challenge will constantly make its customer to choose their services over
its competitors. The Australian Tour Company is affected if customers start choosing these
substitutes and hence, they should look after the component.
Bargaining power of buyers: the bargaining power of the buyer is very high due to the
advancement of technological power and increase internet usage. As there are various tour
companies present, it becomes increasingly difficult for the Australian Tour Company to manage
the operations of their business and conduct an external check. Having knowledge about this
domain helps them in strategizing for the future and price the products accordingly.
Rivalry among the existing competitors: in the tourism industry there is a fierce
competition between the rivals. The Australian Tour company analyzes the competitors because
it helps them in understanding the strategy as adopted by them (Wolf and Floyd 2017).
Barriers to entry: differentiation is one of the most significant barriers existing in the
tourism industry. The hotels and hospitality business are free to differentiate itself as per the
services, location, quality and amenities. Other barrier to the tourism industry is expertise. The
Australian Tour company keeps in mind these factors to understand their impact on the business.
Bargaining power of the suppliers: in tourism industry, employees to the firm are major
suppliers and the suppliers can easily be affected. The bargaining power for the labor supply is
very high when only few skilled employees are present to fill the industry. The Tour Company
Australia is aware of the power of suppliers so that they can form appropriate programs for their
management (Gans and Ryall 2017).

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Therefore the most commonly used strategic tools and competitive analysis has high
significance in obtaining proper understanding about the business environment. Through
PESTEL analysis, the macro environment of aged care industry has been evaluated with respect
to the Estia health. SWOT analysis helps in getting the clear idea about the internal and external
condition of the childcare industry prevalent in Australia using the example of Australian Child
Alliance. Lastly the five forces model of Porter measures the various competitive forces present
in the tourism industry with respect to the Australian Tour Company. Therefore it is highly
essential for all industries to lay major emphasis on its business strategic plan.

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