Competitive Strategy: Analysis of Key Development Tools Essay

This essay delves into the realm of competitive strategy, focusing on the analysis of key strategy development tools. The essay examines three prominent models: Resource Based View (RBV), Ansoff Matrix, and PESTEL analysis. The RBV model emphasizes the importance of internal resources in achieving superior organizational performance, using Amazon as a case study. The Ansoff Matrix, a product-market expansion grid, is explored in the context of Adidas's market penetration strategies. The PESTEL analysis, a framework for evaluating external influences, is discussed in terms of its application to Woolworths Australia. The essay provides insights into the practical application of these tools, offering examples and highlighting the benefits and limitations of each model. The student demonstrates an understanding of strategic management mechanisms and their role in business planning, providing a comprehensive discussion supported by relevant literature.

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Introduction
The business world uses several tools and techniques in order to realize and gain
substantial gains from strategic analysis and planning. These tools as well as analyses aid
businesses to understand the business setting in which they execute operations and introduce
plans, which align with specific environment. According to Uhl and Gollenia (2016), strategic
management mechanisms facilitate business organizations to predict opportunities. Strategic
planning involves consideration of likely internal and external impacts on organization and
subsequently mapping out relevant approach to manage the impacts. From marketing
perspective, strategists take into consideration consumer needs, competitive determinants along
with organizational advantages. Major business enterprises across the world have succeeded in
possible way by using strategic tools and techniques (França et al. 2017). Amongst principal
strategy development tools are PESTEL, Five Forces, SWOT, ANSOFF and Resource Based
view. The following essay aims to analyse strategy developmental tools and explain each of the
model with relevant examples.
Discussion
Resource based View (RBV) is known as a model which considers resources as
imperative to superior organizational performance. Such a model mainly focuses on the model of
difficult-to-imitate features of organization as sources of improved performance and competitive
benefits. According to Bocken, Rana and Short (2015), resources, which cannot be readily
shifted or procured which necessitate an extended learning curve or fundamental change in the
organization climatic and cultural, have greater potential to be exceptional to the organization,
consequently more challenging to imitate by market rivalries. RBV further focuses on value

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creation to create critical competitiveness within the industry. However, Tukker and Tischner
(2017) have found that to sustain competition within sector, organization requires to gather
provision to acquire sustainable competitive advantage (SCA) thus having improved
performance in prolonged term in comparison to its competitors. According to Noe et al. (2017),
resource must accomplish VRIN criterion to offer competitive advantage as well as sustainable
action. Amazon’s key competencies are based on organizational competencies as well as
business resources, which accomplish all VRIN criteria namely value, rarity, inimitability and
organization. Reports reveal that Amazon’s resources and capacities attain one or some of these
criteria, but aid its business expansion. Amazon’s non-core competencies incorporate
organization’s increasing physical stores. This competence is valuable and further offers
competitive benefits, but it is imitable and not exceptional, while accounting major organizations
such as Wal-Mart, which also has robust brick and mortar presences. Furthermore, Amazon’s
increasing level of diversity of e-commerce services is appreciated in relation to its contributing
revenue sources (Mangematin, Ravarini and Sharkey Scott 2017). These sources are not
intermittent and inimitable, as other technology business enterprises offer similar services.
Additionally, according to VRIO analysis, the growing portfolio of private label goods and
increasing revenues of Amazon expands the company’s services and intensifies market presence
as well as elevates revenues. Chang (2016) has cited examples of Amazon Basics is known as
private label which facilitates the organization to directly rival against other e-commerce and
non-online sellers. Although, private labelling has been effective to business, however it is not
rare and not imitable. Moreover, small businesses can apply private labelling. Moreover, VRIO
analysis exemplifies that these resources upsurges Amazon’s competitive returns, however does
not serve as a primary competency, since other organizations tend to develop similar

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premeditated provisions to back the delivery of their produces in order to target
clienteles. Furthermore, considering VRIO analysis, there can be found four resources or
competences, which establish the groundwork of long-term competitive benefits. For example,
Amazon.com comprises supreme quality products in overseas market. According to Pająk
(2017), through this brand, organization attracts consumers to its existing and emerging goods
and services. Moreover, it is vital to note that robust competitive benefits of Amazon are
suggestive of essential capabilities that strengthen each other. Toxopeus, van den Hout and van
Diepen (2018) have claimed that amongst the capitals as well as capabilities revealed in the
VRIO analysis of Amazon, artificial intelligence (AI) competences underline and increase the
profits of the organization’s brand equity via amplified product efficiency and popularity.
However, regardless of these essential proficiencies, Amazon.com comprises of greater potential
by refining its non-core competencies.
Diversified development strategy is referred to type of organizational developmental
strategy selected by company to leverage revenue and acquire substantial market share.
According to Tukker and Tischner (2017), Ansoff Matrix further known as Product Market
Expansion Grid or Growth Vector Matrix is recognized as research method functional in the
exploration of products and markets. Such a model is generally used in order to analyse the
perceptions for company to develop new services in more objective approach and accuracy.
However, in the view of Laudon and Traver (2016), in lieu of an organization implementing
diversification strategy, it is encountered with severe market rivalry in relation to market,
services and products. According to Ansoff Matrix analysis, enterprises must deliberate
opportunities, which are positioned at the broader perspective of the market as well as its
operations. However, Bocken, Rana and Short (2015) have noted that as strategies devised will

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not be apposite for the market and in certain cases it may have severe progressive impact on the
sales and revenues of the business. At this juncture, Uhl and Gollenia (2016) have cited example
of Adidas which have undertaken Ansoff strategic model for market penetration.
According to Ansoff strategic model, market penetration and market development will
have constructive and negative impact on Adidas. Considering implications of Ansoff strategic
model on Adidas market entry and development it has been noted that if Adidas penetrate into
new markets and do not receive expected result, consequently the chronology of processes within
Adidas will face disruption. Such disruption tend to create uncertainty within Adidas employee
base, thus will increase high attrition rate and consequently experience financial liability in its
recruitment and selection process (Wirtz et al. 2016). Furthermore, with entry of Adidas into new
market, the company can tap particular businesses, which generate lower revenue than Adidas,
yet comprise of substantial market share in particular market. However, such a strategy can
experience forceful operations and advertisements thus certainly increasing market share of
Adidas. Reports reveal that Adidas can obtain small corporations with substantial market value
in local markets. Through this strategy, Adidas can rapidly penetrate into numerous markets.
Subsequently, Adidas can offer high quality service with proficient customer service, advanced
designs for diverse categories of individuals and thrive in new markets.
On the other hand, by Ansoff strategic model, if Adidas has to take into consideration the
product development as well as diversification strategy, it must benefit the company rather than
diversification. According to Laudon and Traver (2016), if the diversification strategy is properly
applied, Adidas might encounter risk due to extensive outlays and reduction of key business
operations. Furthermore, as per Ansoff model, if Adidas diversifies similar activity it is

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advantageous or risky for company. Thus, penetrating into business segments without proper
evaluation will increase severe uncertainties for Adidas.
PESTEL analysis is an analytical tool in lieu of strategic business planning. PESTLE is
identified as a strategic framework for deliberating external influences on a business. Businesses
whether new or veterans must incorporate PESTEL Analysis in their business plan. According to
authors, such a strategic model can enable businesses to identify major changes in the political,
economic, social, technological, environmental and technological domain. However, Uhl and
Gollenia (2016) have noted that in political domain, the model does not focus on elections, while
it accentuates the regulations related to remunerations, taxation in addition to intellectual
properties. Furthermore, companies must take into consideration laws in any other market where
it is planning to execute its position. According to Bocken, Rana and Short (2015), PESTEL
allows its users to over-simplify the data which has been utilized. However, it can be possible to
lose out vital data and information. PESTLE as a strategic model requires to be updated
frequently in order to be effectual. Furthermore, PESTEL is considered to be highly operative
when operators come from diverse standpoints and subdivisions. Thus, it necessitates operators
to have admission to data sources, which could be time intense and costly.
On the other hand, Laudon and Traver (2016) have claimed that the groupings of
PESTEL cannot be affected easily. For example, political, economic, social as well as
technological features exist and tend to continue in order to exist devoid of any input. For
instance, technical know-how endures to development. Significant number of products and
applications has been established in order to successfully streamline business choices. At this
juncture, Tukker and Tischner (2017) have cited example of developers of Woolworths Australia

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which has been structuring artificial intelligence in the form of chatbots in order to form
communication base for its customers on websites.
Conclusion
Therefore, from the above discussion it can be concluded that the process of strategic
planning can be as significant to organizations similar to the results. Furthermore, strategic
planning can be particularly valuable procedure when it comprises of workforces in all sections
as well as at all levels of accountability rational related to the way activities are executed and
responsibilities fit into the bigger picture as well as related to their potential offerings.
Furthermore, strategic objectives are mainly of necessity based on the best evidence if
organizations have at the time in addition to the most realistic valuations of the company can
attain.

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References
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