Competitive Strategy Analysis: PESTLE, SWOT, Porter's Five Forces

This assignment analyzes the competitive strategies implemented by Woolworths, a prominent retail company in Australia. The essay focuses on three key strategic tools: PESTLE analysis, SWOT analysis, and Porter's Five Forces model. The PESTLE analysis examines the political, economic, social, technological, legal, and environmental factors affecting Woolworths. The SWOT analysis identifies the company's strengths, weaknesses, opportunities, and threats. The Porter's Five Forces model assesses the bargaining power of suppliers and buyers, the threat of new entrants and substitutes, and the intensity of rivalry among existing competitors. The assignment demonstrates how these tools are applied to understand Woolworths' market position, competitive advantages, and strategic decision-making processes within the Australian retail industry. The essay concludes with a summary of the strategic tools and their importance in business.

Running head: Competitive Strategy
Competitive Strategy
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1Competitive Strategy
Introduction
The following assignment aims at understanding the competitive strategies that are
planned and implemented in the business. In order to achieve business goal, objective and to
obtain competitive advantage, it is important for the organization to enhance their strategic tools.
The assignment seeks at describing three strategic and competitive tools in a chosen company
that is Woolworths of Australia. The three strategic tools are PESTLE, SWOT analysis Porter’s
Five Force Model. Woolworths implements these competitive tools to understand and state its
position in the market and to understand their competitors. Therefore, the paper would describe
how these tools are useful in organizations and what its outcomes are.
Discussion
The company Woolworths is an established retail industry in Australia. Woolworths
analyses its market and identify the nature of the market so as to remain competitive in the
industry. This analysis is followed by the following tools.
PESTLE Analysis
The PESTLE analysis is a competitive strategic management tool which includes four
factors political, social, economic, technological, legal and environment. These factors are the
macro-environment which helps the organization to identify the potential external factors
affecting the company.

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Political Factor
The political factor impacts the organization with government intervenes in the economy.
The political factor includes the labour law, tariffs, tax policies, the trade restrictions and
political stability. Moreover, the government focuses on particular government laws and
regulations. For example: Woolworths is and Australian company therefore must abide by the
laws of Food Standards Code. This law focuses on the packaged food and its content the industry
must mention all the nutritional information on the package. On the hand the political
disturbances may lead to problems within the organization especially with the investors from
investing in the business. Since, the company Woolworths is already and established company
there is less impact of the political factors.
Economic Factors
The economic factors predominantly include inflation rate, interest rate, exchange rate
and economic growth. The economic factors greatly influence the operations of the business and
how the business takes appropriate decisions. The financial position of a company is highly
influenced on the economic factors. It is observed that in Australia there is decrease in disposal
income and thus has diminished the purchasing power; this is due to the drastic economic crisis
in Australia. Even due to the rise in living cost it has lowered the rate of purchasing power. This
factor does impact the price of the products and therefore, Woolworths has to lower the price of
the products. The ease in economic regulation has provoked good opportunity for the new
entrants.

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Social Factors
The social factor mainly includes the population growth rate, health consciousness and
cultural aspects. People of Australia are more concerned about their health and therefore, focus
on the organic food sector. Thus Woolworths aims at providing organic food to its customer and
expanding its business in food sector. The social factor also involves the intermediaries and other
connections like suppliers, the company is facing some poor connection with its suppliers and
thus there is a significant change in the business culture.
Technological Factors
The ever-changing technology also puts a great impact on the business the new
technological advances has influenced new innovations and creativity in the global market. The
technological advance helps the business to grow and distinguished from its competitors.
According to Woolworths “the company has transferred all the national organization staff to an
instinctive technology: Goggle application platform which aims at supporting Woolworth’s
workforce in order to bring efficiency in their work” (Rastogi and Trivedi 2016).
Legal Factor
The legal factors includes the employment law, health and safety law, discrimination law
and these factors can affect the company’s operations, demand for products and its cost as well.
The employment management law is the key factor which must be adhere by the companies. The
company Woolworths takes good care of its employees with good benefit and proper safety
environment. Since, Woolworths is a well-known company the management take good care of
all the legal regulation related to the company’s policies and it is also recommended that the
company must oblige with NFF codes.

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Environment Factor
The environmental factors which includes all the environmental factors and ecological
factors such as climate change, weather which may affect the industry such as farming and
tourism. For example: since, Woolworths provides organic fruits and vegetables, when there is a
climatic change the production and the selling of particular vegetables is not available.
Therefore, the Woolworths have to be facing these kinds of challenges in business as well.
Porter’ Five Force Model
The Porter’s Five Force Model is a tool which is used by the business in order to examine and
evaluate the performance and the current position of the business by attaining competitive
advantage over the competitors. This model particularly focuses on these areas:
Bargaining Power of the Suppliers
Successful and established companies possess the most powerful suppliers and competent
workforce. Woolworths occupies over 70% of the retail industry, therefore the domestic market
of Australia is facing with limited choices of suppliers or intermediaries. However, Woolworths
does own the maximum number of suppliers through local and oversea therefore there is
moderate level of risk regarding the bargaining power of supplier.
Bargaining Power of the Buyers
The bargaining power is described as the ability of the customers to buy a product and on
prospects and the customers buys the product. The prospects may be price, availability, customer
value, personal choices and so on. The trend of healthy living in Australia has changed the
living style and societal values, people are more inclined towards the healthy and organic food

5Competitive Strategy
therefore, Woolworths has a good opportunity to expand its retail industry in the food sector by
providing organic products.
Threats of New Entrants
The threats of the new entrants may bring many obstacles to the company that is perfect
competition, customer loyalty to the established brands, access to the distribution level,
sanctioned monopolies and profitability of other firms. For example: the rapid increase in food
and grocery industry has bought good interest for the new entrant in this particular field, but
threat of new entrant to Woolworths is quiet moderate as it is a well-known brand in Australia
and has earned vigorous customer loyalty. However, the company must not underestimate the
entrants and must be well prepared for upcoming challenges, as the new entrants may possess
new marketing strategies and may take over the industry.
Threats of Substitutions
The substitution product tries to resolve the same economic need, nowadays the
competition is observed to be elevating. People are becoming more demanding and thus the
companies have to consecutively come with some new changes in their products and services.
For example: In Australia the buyers have the perception from supermarket that they must offer
“value for money”. There are lots of substitute’s products which are being offered through
convenience stores, such as Coles and 7-eleven. Moreover, Woolworths is facing competition
with the farmer market which offers organic products.

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Rivalry among existing competitors
There are numbers of significant business growing in this sector; there have been price
battles which are observed to be emerging between both the big companies and small companies.
The Woolworths is facing high intensity of rivalry in the industry, even Woolworths with well-
known brand name faces rivalry. The rivalries create limitation for the growth of the business.
SWOT Analysis
The SWOT analysis is an effective tool which analyses both the internal and external factors
affecting the company growth.
Strength
The strength of the company identifies the key factors which helps the company to
achieve its goal. For example, “Woolworths is an established company in the retail industry and
covers over 900 stores in Australia” (Woolworths SWOT Analysis, 2019). It serves around “1.8
million customers every week. Woolworths has been rewarded as Australia’s most attractive
supermarket loyalty program. It has most efficient workers compared to other like Coles”.
Weakness
The weakness refers to the factors where the company must put emphasize on
overcoming and taking appropriate steps in order to deal with the challenges and its weakness.
Woolworths has low international presences (Woolworths SWOT Analysis 2019). Their
dominant presence has led to bring discrepancies in supplier relations.

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Opportunities
Opportunities are the factors where the company can seek benefit and growth
opportunity. For example: huge market retail in emerging economies, due to growing demand in
the grocery and food industry Woolworths have good opportunity to expand its business in
global market.
Threats
Threats are the factors where the company must focus on its strategic plan and be aware
of the external environment which can hinder the growth of the company. For example: high
intensity of competition for Woolworths affects the growth in the industry. Economic factors
like market policies and recession could be an obstacle for the company.
Conclusion
Therefore, it can be concluded from the above discussion that the strategic tools plays a
major part in a business. It helps the company to give an overview of the environment which can
be beneficial or can be obstacle for the company. Since, Woolworths has implemented all the
strategic competitive tools it has remained profitable in the market since a long time. Therefore,
for better access and growth the strategic planning is highly essential.

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Reference and Bibliography
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Aug. 2019].