HI6006 Competitive Strategy: Key Strategy Development Tools Essay

This essay provides a comprehensive analysis of key strategy development tools used in competitive business environments. It explores four critical frameworks: SWOT analysis, PESTLE analysis, Porter's Five Forces model, and the Resource-Based View. The essay delves into the application of these tools, offering practical examples of how companies like Toyota, Marks and Spencer, Starbucks, and Ford utilize them to assess their internal and external environments, identify opportunities and threats, understand industry dynamics, and leverage their resources for competitive advantage. The discussion highlights the importance of these tools in strategic planning and achieving business objectives within the competitive landscape. The essay emphasizes on the importance of understanding internal strengths and weaknesses, external opportunities and threats, industry rivalry, and the effective utilization of resources to formulate strategies for success.

Competitive Strategy
Table of Contents
 SWOT ANALYSIS..................................................................................................................2
Example of Toyota Company......................................................................................................2
 Pestle analysis...........................................................................................................................3
Example of Marks and Spencer...................................................................................................4
 Porter five force models...........................................................................................................4
Example of Starbucks..................................................................................................................5
 Resource based view................................................................................................................5
Example of Ford Company..........................................................................................................6
References........................................................................................................................................7
2

Competitive Strategy
Strategic tools that are implemented by the companies to manage the work
Strategic tools focuses on offering right direction to the companies so that it could be easy to
attain the positive outcome. The strategic tools play a significant role in controlling the routine
activities of the company. Without proper implementation of the right tool at right place, the
companies will not be able to accomplish the set goals and targets in the competitive business
world. The paper will focus on the key strategy developmental tools such as Pestle analysis,
SWOT ANALYSIS, Porter five force models and Resource based view. These are considered as
essential tools that assist in the companies in determining the set objectives.
 SWOT ANALYSIS
SWOT Analysis can be stated as the essential tool that focuses on managing the overall outcome
of the company. By considering strength, weakness, threats and opportunities the companies can
easily determine the exact position among the competitors present in the market. It is important
that at the time of planning the different activities. It has been seen that the overall objectives of
the company can be determined of emphasis is given on internal and external factors of the
company. The strength of the company is related with the advantage that is achieved over the
competitors. The weakness highlights the disadvantage that affects the growth of the business.
Opportunities are the element that relates with the project that can be exploited to attain the
benefits. The companies should focus on matching the internal environment with the external
marketing conditions so that it could be easy to maintain the strategic goals. The companies
should focus on the SWOT analysis tool as it helps in the later stage of planning and also
positively affect in attaining the set goals and targets of the company (Gürel and Tat, 2017).
Example of Toyota Company
SWOT ANALYSIS can be explained with the help of Toyota company example. It is examined
that strength of the company relates with the strong focus towards research and development.
The innovative culture adopted by the company helps in boosting the demand of the services in
the competitive market. Weakness of the company relates with the dependence on the suppliers
and also with the poor brand recognition. There are also various opportunities that company can
avail easily such as focus should be given on the green vehicle technology and also growing
3

Competitive Strategy
concern for the environmental pollution. It has been observed that the company faces threats
such as high competition level and increased price of the raw materials.
Strength
 Strong focus towards research and
development.
 Innovative culture.
Weakness
 Dependence on the suppliers.
 Poor brand recognition.
Threats
 High competition level
 Increased price of the raw materials
Opportunities
 Green vehicle technology
 Environmental Pollution
 Pestle analysis
Pestle analysis is simple and one of the effective tool that help in analyzing the different
situations of the market. With the help of this tool, the company can easily find the external
factors that impact the operations of the company. This tool also helps in exploitation the
changes and also the competition level that exist in the market. Pestle analysis focuses on
managing the relevant data that also controls the external environment. It is necessary for the
higher authorities to focus on controlling the operations so that it could be easy to attain the
positive results. Political factors consists of foreign trade policy, tax policy and labor law. The
political factors also affect the activities of the company and it is important to consider the
current and anticipated future legislation (Grundy, 2017).
The economic factor also affects the overall activities of the company such as interest rates,
exchange rates and also inflation. In relation to the social factors, there are different areas such as
age distribution and population growth that affect the marketers and also the needs of the
customers. Technological factors also affect the marketing and also the management in different
ways of producing products and services. In relation to the environmental factors there are some
factors such as carbon footprint and enhancing the scarcity of the raw materials. The legal factors
emphasizes on the health and safety and also on the advertising standards that are important to be
maintained (Nason and Wiklund, 2018).
4

Competitive Strategy
(Source: MindMap, 2019).
Example of Marks and Spencer
In relation to the political factor, it is seen that free trade agreements helps the companies to
source the products from one country at the cheap rates. Economic factor focuses on the UK
economy that can be recovered from the global recession. There are also social factors such as
food prices are declining and also there is high demand of the fashionable clothes. In relation to
the technological factor, the number of the customers shopping online is enhanced. The
environmental factor states that there is high demand of the going green strategy. Legal factor
focuses on the regulations in relation to packaging and production (Mathews, 2016).
 Porter five force models
Porter five force models are related with the framework that helps to evaluate the competition of
thee company. It has been seen that there are different forces that helps in determining the
competitive intensity and also the attractiveness of the industry. There are five forces such as
threat of entry, bargaining power of the buyers, power of suppliers, industry rivalry and threat of
substitutes. This framework is considered so that it could be easy to access the competitive
strength and also the position of the company. It is necessary for the companies to focus on these
tools so that positive outcome can be attained in the high level of market (E. Dobbs, 2014).
5

Competitive Strategy
(Source: Strategic management, 2019).
Example of Starbucks
It is seen that the competitive rivalry is high as there are many companies who are present in the
market. The bargaining of the buyers is also high as the customers have more scope to avail the
services of the other competitors. The power of the suppliers is weak as there are various
strategies that are used by the suppliers to complete with each other. Threat of substitute is also
high as there are other coffee producers who are offering products in the market. It has been
examined that threat of new entrants is moderate as the company need high investment to enter
into the market of the food sector.
 Resource based view
Resource based view is also the effective strategy that helps in interpreting the internal resources
of the company and also it focuses on the resources and capabilities of the formulating the
strategy to attain the sustainable competitive advantage. It has been seen that competitive
advantage takes place when the resources of the company are obtained in relation to the other
companies. By considering this strategy, it could be easy to control the overall resources of the
company and also it helps in boosting the overall operations of the company in the competitive
market (Davis, 2017).
6

Competitive Strategy
(Source: HOT PMO, 2019).
Example of Ford Company
It is noted that there is differentiation that is done by the companies and also it has been seen that
the aim of the company is to control the quality of the products. There is also a use of the latest
technologies which helps the customers to maintain the range of the services offered in the
market. The main aim of the company is to compete with the luxury brands such as BMW as
these helps in boosting the overall profits in the market (Kozlenkova, Samaha and Palmatier,
2014). It can be concluded that these tools give in-depth analysis of thee environmental factors
that impacts the operational activities of the company.
7

Competitive Strategy
References
Davis, P.J., 2017. How HR can create competitive advantage for the firm: Applying the
principles of resource-based theory. Human Resource Management International Digest, 25(2),
pp.4-6.
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.
Grundy, T.D., 2017. Dynamic Competitive Strategy: Turning Strategy Upside Down. Routledge.
Gürel, E. and Tat, M., 2017. SWOT ANALYSIS: A THEORETICAL REVIEW. Journal of
International Social Research, 10(51),pp.65.
HOT PMO., 2019.Resource based view. [Online]. Available at:
https://www.hotpmo.com/blog/the-resource-based-view-of-the-pmo [Accessed on 26 April
2019].
Kozlenkova, I.V., Samaha, S.A. and Palmatier, R.W., 2014. Resource-based theory in
marketing. Journal of the Academy of Marketing Science, 42(1), pp.1-21.
Mathews, J., 2016. An Information Processing View of Competition Analysis. IUP Journal of
Business Strategy, 13(1), p.7.
MindMap., 2019.pestle analysis. [Online]. Available at: http://www.mindmapsoft.com/pestle-
analysis-mindmap/ [Accessed on 26 April 2019].
Nason, R.S. and Wiklund, J., 2018. An assessment of resource-based theorizing on firm growth
and suggestions for the future. Journal of Management, 44(1), pp.32-60.
Strategic management., 2019.Porter five force. [Online]. Available at:
https://saylordotorg.github.io/text_mastering-strategic-management/s07-03-evaluating-the-
industry.html [Accessed on 26 April 2019].
8

Competitive Strategy
9