HI6006 Assessment: Analysis of Competitive Strategy Tools

This essay comprehensively analyzes several key competitive strategy development tools, providing a detailed examination of their application and significance in business contexts. The essay delves into the intricacies of SWOT analysis, PESTLE analysis, Porter's Five Forces, and Ansoff matrix, illustrating their practical usage through real-world examples of companies like Toyota and Samsung. The analysis includes discussions of the strengths, weaknesses, opportunities, and threats (SWOT) framework; the political, economic, social, technological, environmental, and legal (PESTLE) factors influencing business decisions; the competitive forces within an industry as described by Porter; and the Ansoff matrix for growth strategies. The essay also includes practical examples of how these tools are applied in the context of businesses such as Tesco and Avon, emphasizing the importance of these tools in strategic planning and decision-making processes. The essay provides a strong academic foundation by referencing relevant research and academic journals to support the arguments presented, making it a valuable resource for students studying business strategy.

Running head: Competitive Strategy
Competitive strategy

Competitive strategy
Tools
SWOT analysis
This is one of the strategic tools that help the company in giving future direction to the
companies. The success can be achieved by the company if this tool is taken into consideration.
It is important so that proper planning can be taken into consideration (Shin and Dess, 2017). It
has been analyzed that this model is considered by the top management so that companies can
make proper analysis of the environment. In strength, proper analysis is done so that demand of
the products can be enhanced. In this model there are four components strength, weakness,
opportunities and threats. Through this analysis focus can be given on the proper factors related
to market and through this large market share can be considered (Bell and Rochford, 2016).
In the factor related to weakness the company focuses on loyalty and weak distribution
channel. Weakness also focuses on maintaining the resources of the company. In opportunities,
the focus is given by the company on enhancing the market share and also focus is given on
introducing new products in market. Threats also focuses on competition level and also the
technologies factor are taken into consideration by the company (Menga et al., 2015).
Practical example of Toyota
The strength of the company is related with the overall goodwill of the company in the
market. Toyota has also achieved goodwill as it has been seen that customers are satisfied with
the services which are offered in the market. The company has also enhanced its sale through
advertisements and promotion of the operations. Also it has been seen that due to leak of the data
the negative impact is given on the overall image of the company which is now weakness of the
company. It is important for the sales department to consider this tool so that each and every
aspect can be analyzed.
The opportunities are concerned with product expansion in the market by considering
diversification. The threat of the organization is concerned with the high competition level in the
market.
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Competitive strategy
Pestle analysis
This is one of the popular developmental tools which help the companies to consider
proper evaluation. This assists the marketers to analyze the macro environment and also the
overall activities (Yüksel, 2012). This framework is considered by the managers and also to that
assistance is given to the employees so that activities can take place in the right direction (Ho,
2014).
Political aspects are linked with the process which is implemented from the government.
Next is related with inflation and deflation and also it affect the price level. In technological
factor focus is given on considering latest technologies so that growth can be achieved. In legal
factor laws related to export and import are considered. The last aspect is related with
environment in which it has a connection with surroundings and also impact is seen on the entire
operations (Grant, 2016).
Practical example of Samsung
The company gives focus on all the legal factors related to rules and regulations at the
time of introducing the products in the market. The overall cost is also impacted by labor and
manufacturing cost. In technological factor the company focuses on innovation which can be
only done with the help of latest that should be considered to attain the large market share. Also
when import and export of products takes place it has been seen that the company has to
emphasize on rules and regulations so that problems can be reduced Economic factor also
emphasizes on the cost related with inflation and deflation. Last factor consider the
environmental issues in which the organization emphasize on considering the products that can
be easily degradable in the competitive market. This also gives impact on maintaining
environment in a proper manner.
Porter five force analysis
This is one of the important management tools that can be considered by the organization
so that operations can be completed by focusing on the external environment. On this framework
the focus is given by the top management so that success can be attained (Mathews, 2016). The
first aspect focuses threat of new entrants which evaluate the new entries in the competitive
market. In power of suppliers evaluation is made on the number of suppliers in the market. In
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Competitive strategy
power of buyers focus is given on the customers who are purchasing the products. Rivalry
against the competitors is also the factor in which analysis is made of the competitors present in
the market. Last factor focuses on threat of substitute in which substitute products are considered
and it is important to consider effective strategies so that success can be achieved (Huang et al.,
2015). This tool helps to analyze the needs and wants of the customers also and according to that
company can easily consider proper rules and procedures.
Practical example of Tesco
Threat of entrants is high as there are many companies who are entering into the market
and similar products are offered. Threat of substitute is also high as there are outlets who are
offering same products and also customers have a choice to select the products which they
require. In the market there are many suppliers so the demand is less as compared to the other
product line. Suppliers are the one who offer products and services in the market and through
this it can be simple for the company to distribute the products and services in the market.
Though this sales can also be enhanced in an effective manner.
Ansoff Strategy
Ansoff strategy is known as one of the famous development tools that help the company
to evaluate the overall expansion of products and services. There are four strategies which are
taken into consideration in this for growth. This strategy is also considered as product and market
expansion which helps the managers to summarize the overall growth strategies and also
comparison is made with the risks which are related to each one. In this when movement take
place into horizontal or vertically form it has been analyzed that overall risk enhances.
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Competitive strategy
Source: Business to you, 2018.
Practical example of Avon
Market penetration
It has been seen that this strategies emphasizes on the overall consumer base of the
organization. When focus is given on the company it has been analyzed that company focus on
increasing the overall performance related to sales by considering the strategies related to direct
selling and internet marketing. By considering these strategies it can be simple for the company
to beat the level of competition in the market by using the products.
Product development
The company introduces various products like lipsticks and also products related to skin
care so that customer’s base can be maintained.
Market development
The company emphasizes on searching the new market for the existing market so that
large market share can be grabbed. This strategy impacts the overall new use of products and
also maintains the customer’s base.
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Competitive strategy
Diversification
The company also focuses on moving into the new territories so that profits can be
increased. The company considers the strategies related to direct marketing and also internet
marketing so that products can be offered into the market segment. Avon also diversifies in
jewelry segment by sending its sales force from door to door by considering the use of
distribution channel.
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Competitive strategy
References
Bell, G.G. and Rochford, L., 2016. Rediscovering SWOT’s integrative nature: A new
understanding of an old framework. The International Journal of Management Education, 14(3),
pp.310-326.
Business to you., 2018.Frameworks. [Online]. Available at:
https://www.business-to-you.com/frameworks/. [Accessed on 19 aug , 2018].
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), pp.6478-6492.
Huang, K.F., Dyerson, R., Wu, L.Y. and Harindranath, G., 2015. From temporary competitive
advantage to sustainable competitive advantage. British Journal of Management, 26(4), pp.617-
636.
Mathews, J., 2016. An Information Processing View of Competition Analysis. IUP Journal of
Business Strategy, 13(1), p.7.
Menga, E., Dan, A., Lu, J. and Liu, X., 2015. Ranking alternative strategies by SWOT analysis
in the framework of the axiomatic fuzzy set theory and the ER approach. Journal of Intelligent &
Fuzzy Systems, 28(4), pp.1775-1784.
Shin, H. and Dess, G.G., 2017. From Swot to Value Appropriation: Career
Implications. Academy of Strategic Management Journal, 16(1), pp.165A-168A.
Yüksel, İ., 2012. Developing a multi-criteria decision making model for PESTEL
analysis. International Journal of Business and Management, 7(24), p.52.
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Competitive strategy
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