Competitive Strategy Analysis: A Comparative Study of Four Models

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Competitive strategy
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Table of Contents
Introduction.................................................................................................................................................3
SWOT Analysis.............................................................................................................................................4
Ansoff Matrix Model....................................................................................................................................6
PESTLE model..............................................................................................................................................7
Porter five models.......................................................................................................................................9
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11
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Introduction
Strategy Development Tool is a framework or a model which thoroughly analyses both the
internal and external factors of an organization. Such analysis enables the management to
understand the organization’s current position and performance in comparison to the industry in
which it operates and also to the competitors operating in the same industry and hence take
strategic decisions regarding the future prospects of the company. It provides the company with a
competitive advantage over its competitors as it also analyses factors that affect other companies.
Apart from the analysis of current weaknesses and strengths, it also helps in identifying new
markets and diversification (both horizontal and vertical) opportunities enabling the company to
grow. It also helps companies to take corrective actions such as turnaround strategies or
discontinuation of a certain product to cope with difficult situations faced by the company.
Overall it's a management strategic decision-making tool available with a company.
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SWOT Analysis
SWOT analysis stands for Strength (S), Weaknesses (W), Opportunity (O) and Threat (T) which
allows an organization to assess both internal and external factors affecting it on daily basis. It is
a situational analysis of the strength and weaknesses of the company are assessed and used in
identifying future opportunities and threats. Basically, it enables the organization to formulate
and implement strategies for future prospects(Yüksel, 2012). The BHP Billiton is a major player
in its industry conducts SWOT analysis on a periodical basis to assess its own position compares
to its competitors.
Strength:
1. Strong support from its dealers and suppliers enabling sufficient liquidity at all times.
2. Extraordinary track record of performance from many years making it a leader in the
industry
3. A high rate of return offered by the company suggesting excellent financial performance
and operational efficiency.
Weaknesses:
1. Lacks in the area of research and development which is of utmost importance for a
company to diversify into new markets.
2. Complex organizational structure making day to day activities time consuming and over
complicated(Zalengera et. al., 2014).
3. High days inventory ratio meaning products are stocked for longer duration and inventory
move slowly compared to its competitors.
Opportunities:
1. Introduction of new taxation policy will impact day to day business and open up new
opportunities for the future.
2. Implementation of new policies such as environmental policies would enhance its
reputation in the market and the company would gain a competitive advantage over its
competitors(E. Dobbs, 2014).
3. Investment in new technologies would enable the company to diversify into the new
markets and BHP Billiton having stable cash flows is much capable of doing this
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Threat:
1. Over the years the competition has significantly increased causing a threat for the
company to hold its position as the leader in the market.
2. The market has been witnessing a shift in consumer preferences and behaviors requiring
the company to change its marketing and pricing policies
3. Cost of raw materials and other expenses have increased over the years making it difficult
for the company to maintain its net profit margin and hence it needs to operate more
efficiently in terms of both operations and management (Kajanus, et. al., 2012).
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Ansoff Matrix Model
Ansoff Matrix Model helps in the management to make strategic decision making based on its
current performance in the market. It provides the company with 4 different growth alternatives
and company may choose any one or a combination of more than one suited to its requirements
or specific to a particular industry or sector (Hussain, et. al., 2013). Woolworths group is a major
group in retailers sector in Australia. It operates in many retail sectors mainly, liquor, fashion and
even operates in hotel and gaming sectors across the globe. Ansoff Matrix model defines:
Market/Product Existing New
Existing
Market penetration:
 Introduction of new
products
 Redefining the brands
 Increase the share in
the market
Market development:
 Opting new and
different market
channels
 Different pricing
policies for different
market segments.
New
New product development:
 Formulation of new
and innovative
techniques so as to
make policies and
strategies more
effective
Diversification:
 More focus on
horizontal
diversification.
 Sales Stage Storage
would be benefited
from vertical
diversification.
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PESTLE model
Pestle model is an instrument which is used by companies to identify external issues that a
company faces. The pestle model stands for political, economic, social, technology, environment
and legal analysis (Yüksel, 2012). ABILENE OIL AND GAS LIMITED tasks as a company case
study to briefly explain the pestle model. Abilene oil gas limited as an Australian based company
and headquarter of the company is located in. Abilene oil and gas limited was founded in 1970
and deals in gasoline products.
 Political factors that create influence on Abilene oil and gas limited: political factors are
creating a long term profitability issue for Abilene oil and gas limited. There are certain
important factors that need to keep in mind while Abilene oil and gas limited perform
their operation, factors such as taxation scheme of government, government interference
in operation, price of goods and services and salaries or wages of employees. These are
some basic factors that a company must keep in mind to avoid political problems.
 Economic factors that create influence on Abilene oil and gas limited: economic factors
are those factors which create a direct impact on the performance and sales of a company.
There are a lot of factors that determine the demand for a product and investment in an
Abilene oil and gas limited company. Economic factors that create influence on the
performance of Abilene oil and gas limited are inflation rate in the economy, the interest
rate of lender and rate of foreign exchange, these are some basic factors that create an
impact on performance
 Social factors that create an influence on Abilene oil and gas limited: social factors are
always an important role in the development of business, social factors such as the
attitude of society towards the firm, culture of the society in which a firm operates and
interest of society.
 Technological factors that create an influence on Abilene oil and gas limited: technology
is an important part of any business activity; there are a lot of technical factors that
directly or indirectly affect Abilene oil and gas limited, factors such as new technology,
production technology, and technological diffusion.
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 Environmental factors that create an influence on Abilene oil and gas limited:
environmental factors such as weather conditions, climate change, environmental
pollution, waste management and regulation regarding air and water pollution (Zalengera
et. al., 2014). All these factors are important from a company perspective.
 Legal factors that create an influence on Abilene oil and gas limited: legal factors such as
copyrights, intellectual property law, patents, employment laws, and data protection. All
these factors must keep in mind Abilene oil and gas limited to grow their business.
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Porter five models
Porter five models are an instrument to measure the strength and weaknesses of a company.
Agrimin limited company takes as a case study to briefly explain porter five models. Agrimin
limited is an Australian based company and headquarter of the company is located in Nedlands
WA. Agrimin Company Is basically deals in the mining sector.
The threat of new entrants: those companies which are large in size can easily achieve economies
of scale but it’s quite difficult for agrimin limited to achieve economies of scale (E. Dobbs,
2014). If a new firm enters into this sector than it's quite difficult for that firm to outperform
again limited company.
Bargaining power of suppliers: there are a lot of suppliers of raw material to agrimin limited
because in this sector buyers are less and suppliers are more so this force can be proof weak on
agrimin limited company.
Bargaining power of buyers: there is a lot of producer in this sector than sellers so buyers have
less choice and pay price whatever a producer decide.
The threat of substitute products or services: the threat of substitute products is not applicable to
agrimin limited company because there are small numbers of the producer in this sector who
produce a product as like agrimin limited company.
Rivalry among existing firms: the rivalry among firms in this sector is not strong because of only
a few producers. Most of the companies who work in this sector are large in size so it's quite
difficult for a firm to take a move without notice.
So these are five factors that are applied to again limited.
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Conclusion
In this study on four different companies, four different models of marketing were defined. In the
first model of study, PESTLE analysis was discussed with the help from Abilene oil and gas
limited. In the porter five forces model analysis agrimi company takes as a case study to briefly
explain the model. In the SWOT analysis, BHP Billiton Company takes as a case study to briefly
explain this model. In the Ansoff analysis Woolworth Company takes as a case study to briefly
explain this model.
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References
 E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of
industry analysis templates. Competitiveness Review, 24(1), pp.32-45.
 Hussain, S., Khattak, J., Rizwan, A. and Latif, M.A., 2013. ANSOFF matrix,
environment, and growth-an interactive triangle. Management and Administrative
Sciences Review, 2(2), pp.196-206.
 Kajanus, M., Leskinen, P., Kurttila, M. and Kangas, J., 2012. Making use of MCDS
methods in SWOT analysis—Lessons learnt in strategic natural resources
management. Forest Policy and Economics, 20, pp.1-9.
 Yüksel, I., 2012. Developing a multi-criteria decision-making model for PESTEL
analysis. International Journal of Business and Management, 7(24), p.52.
 Zalengera, C., Blanchard, R.E., Eames, P.C., Juma, A.M., Chitawo, M.L. and Gondwe,
K.T., 2014. Overview of the Malawi energy situation and A PESTLE analysis for
sustainable development of renewable energy. Renewable and Sustainable Energy
Reviews, 38, pp.335-347.
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