Application of Strategic Management Tools for Competitive Advantage

This report provides a comprehensive analysis of competitive advantage, focusing on strategic planning and the application of key management tools. It begins with an introduction to the importance of strategic planning in today's complex business environment, emphasizing its role in setting goals and adapting to market changes. The report then delves into three crucial strategic tools: SWOT analysis, PESTLE analysis, and Porter's Five Forces. The SWOT analysis examines Coca-Cola's strengths, weaknesses, opportunities, and threats, while the PESTLE analysis explores Woolworth's political, social, economic, technological, environmental, and legal factors. Lastly, the report applies Porter's Five Forces to analyze Apple Inc.'s competitive position. The report concludes by summarizing the importance of these tools in developing measurable goals and understanding a company's competitive landscape, using real-world examples to illustrate each concept. The report references several academic sources to support its findings.

[Competitive Advantage]
2019
Student’s Name

Competitive Advantage 1
Introduction
Due to increasing complexities in the business environment, it becomes imperative for the
organization to undertake strategic planning. Strategic planning is considered as a roadmap
that helps the companies in setting measurable goals and guides the actions for achieving
operating efficiency and allows being proactive towards the changes in the business
environment (Bryson, 2018).
The report will provide insight into the application of strategic management tools for
analyzing the opportunity and the intensity of completion in external environment. It will
cover the tools such as SWOT, PESTLE and five forces model.
SWOT Analysis
This strategic technique is used to analyze all the factors that help in taking business
decisions. It will cover the internal strengths and weakness of companies and will also
provide insight into the opportunities and the threats that lie in external environment. It helps
in determining the core competencies of the company and the threats that can affect the
functioning of the business (Channon and Jalland, 2016).
Strengths:
Strengths describe the unique selling proposition of the company and the advantages that help
the company in attaining higher profitability. It is analyzed that Coca-Cola enjoys global
presence and has large distribution networks. The company has largest market share and are
able to maintain the loyalty of the customers. It enjoys unique brand identity and developing
effective marketing campaigns for retaining customers (Bohari, Hin and Fuad, 2017).

Competitive Advantage 2
Weakness:
It describes the area where the company can lose its sales and also determines the area where
improvement is required. It is analyzed that the company like Coca-Cola is not able to
diversify its existing product range and do not develops health beverages in response to the
obesity issue faced by the customers. The company faces intense competition from Pepsi and
is not able conduct water management (Gurel and Tat, 2017).
Opportunities
It refers to the advantages in the external environment that allows the business to grow and
sustain in the future. It refers to the response the company undertakes considering the
changing business trends.
The improvements in the food and the health business provide the opportunity of
diversification and allow the company to cross-sell its product to existing customers. The
company gets the opportunity of saving the acts of supply chain by selling new product
ranges to the existing suppliers. The increased demand in developing countries provides the
opportunity of maximizing the profits. The improvements in the supply chain provide the
opportunity for cost reduction (Gurel and Tat, 2017).
Threats
It includes the obstacles that the company faces in the successful operation of business and
determines the situation that can directly impact the performance of the company. The
scarcity of raw material and indirect competitors creates a threat to the company. The
company faces the scarcity of water consumption and use of pesticides creates threat for the
operation of business. The indirect competitors such as Costa Coffee, Starbucks Café Coffee

Competitive Advantage 3
Day provides diversification in the products and the healthy drinks such as Real, Red bull
shifts the interests of the customers (Bohari, Hin and Fuad, 2017).
PESTLE Analysis
It is a strategic tool that helps the company in analyzing the macro-environmental factors that
affect the performance of the company. It provides a clear picture of the internal and external
factors. It includes various factors such as political, social, economic, legal, technological and
environmental factor. It provides insight into the operational challenges faced by the
companies. The further paragraphs will reflect upon PESTLE analysis of Woolworth
(Nandonde, 2019).
Political Factor
It includes the involvement of the government in industry. It states the policies and
restrictions imposed by the government. The company operates in various dynamic
environments and focuses upon the trade regulations related to food & staples, the level of
corruption, employee benefits, taxation policy and the price regulations in the country in
which the company operates (Fozer et al, 2017).

Competitive Advantage 4
(Source: Aithal, 2017)
Social Factor
The culture, value, and beliefs of the customers play a major role in the successful operation
of the company. Woolworth focuses upon analyzing the preferences of the target market
which includes the leisure activities, demographics, culture, and attitude of the consumers.
The company focuses on designing the marketing messages according to the beliefs of the
customers so as to attract large number of customers and increase its market share (Fozer et
al, 2017).
Economic Factors
These factors include the growth rate, inflation rate, fluctuations in the exchange rate,
economic cycle and interest rate in the country. It is analyzed that the global crisis has
directly impacted the performance of the company and has suffered decrease in the demand
of the products because of lower purchasing power of the customers. The fluctuations in the
wage rate and the interest rate affect the performance of the company (Aithal, 2017).

Competitive Advantage 5
Technological Factors
It includes the analysis of the advancements in the technology to cope up with the changing
business trends. Woolworth focuses on adopting technological advancements to speed up the
operational process and cut the cost structure of the company. The adoption of latest
technology allows delivering innovative products to the consumers and gain maximum
satisfaction (Aithal, 2017).
Environmental Factors
Environmental standards and regulations majorly affect the performance of the company. It
includes the regulations related to environmental pollution, changes in climatic conditions,
management of waste and the attitude of country towards green products. Such factors restrict
the operation of the company and help in improving the brand image of company (Nandonde,
2019).
Legal Factors
It covers the laws that protect the intellectual property of the company. Such laws help the
company in sustaining its competitive edge over others. It includes laws such as consumer
protection, employment law, discrimination law, and health and safety laws (Nandonde,
2019).
Porters Five Force Analysis
This strategic tool is developed by Michael E Porter for analysis of the strategic position and
competitive strength of the company. It describes the intensity of competition in the external
environment. It helps the company to increase its capacity by analyzing the factors that affect
the profitability of the company (Harding, 2017).

Competitive Advantage 6
(Source: Luttgens and Diener, 2016)
The threat of Substitute products
It determines the availability of close substitutes in the market and increases the likelihood of
consumers switching over other brands. It reduces the attractiveness of the market. The threat
of substitute products in low in the case of Apple Inc. because the company offers advances
features and services and enjoys strong brand positioning. However the competitor's
performance is low in comparison to Apple Inc. (Luttgens and Diener, 2016).
Bargaining Power of Buyers
It describes the power of the buyers to drive down the price of the products. It helps the
company in analyzing the switching cost of buyer and importance of each buyer for the
organization. The bargaining power of buyers is high due to low switching cost and increased
knowledge to the customers. The customers get shifted to the brand that provides maximum
features at minimum cost (Luttgens and Diener, 2016).
Bargaining Power of Suppliers

Competitive Advantage 7
It reflects the power of the suppliers to drive up the prices of products. It helps in determining
the cost of switching from one supplier to another. It is analyzed that the bargaining power of
suppliers is low because of large availability of supplier to the company and this, in turn,
decreases the power of driving up of prices by suppliers (Wonglimpiyarat, 2012).
Industry Rivalry
It describes the number of competitors exists in the external environment. It is analyzed that
the increase in competitors decreases the attractiveness of the business. It is analyzed that the
intensity of competition is high because the companies like LG and Samsung use aggressive
strategies and there is low differentiation which in turn intensifies the competition. The
switching cost of customers is low which in turn increases the competition (Amrollahi and
Akhgar, 2013).
The threat of New Entrants
It describes the threat of new entrants entering the market. It reduces the profitability of the
business if there are no strict regulations and barriers to entry. The threat of new entrant is
moderate because it involves high capital requirements and the company enjoys strong brand
positioning which is difficult to meet by new entrants (Amrollahi and Akhgar, 2013).
Conclusion
From the above discussion, it is concluded that strategic planning is important to develop
measurable goals and analyze the position of the company in a competitive environment.
Through the application of SWOT analysis we realized the strengths and the weakness of
Coca-Cola and also the opportunities and challenges faced by the company in external
environment. PESTLE analysis has described the macro-environment factors of country in

Competitive Advantage 8
which Woolworth operates and lastly it covers the porters five force analysis to analyze the
competitive position of Apple Inc and its attractiveness in competitive market.
References
Aithal, P.S., (2017) An Effective Method of Developing Business Case Studies based on
Company Analysis. International Journal of Engineering Research and Modern Education
(IJERME), ISSN (Online), pp.2455-4200.
Amrollahi, A. and Akhgar, B., (2013) Analyzing open source business with Porter's five
forces. International Journal of Computer Theory and Engineering, 5(1), p.162.
Bohari, A.M., Hin, C.W. and Fuad, N. (2017) The competitiveness of halal food industry in
Malaysia: A SWOT-ICT analysis. Geografia-Malaysian Journal of Society and Space, 9(1).
Bryson, J.M., (2018) Strategic planning for public and nonprofit organizations: A guide to
strengthening and sustaining organizational achievement. John Wiley & Sons.
Channon, D.F. and Jalland, M., (2016) Multinational strategic planning. Springer.
Fozer, D., Sziraky, F.Z., Racz, L., Nagy, T., Tarjani, A.J., Toth, A.J., Haaz, E., Benko, T. and
Mizsey, P. (2017) Life cycle, PESTLE and multi-criteria decision analysis of CCS process
alternatives. Journal of cleaner production, 147, pp.75-85.
Gurel, E. and Tat, M. (2017) SWOT analysis: A theoretical review. Journal of International
Social Research, 10(51).
Harding, S., (2017) MBA management models. Routledge.

Competitive Advantage 9
Luttgens, D. and Diener, K., (2016 )Business model patterns used as a tool for creating (new)
innovative business models. Journal of Business Models, 4(3).
Nandonde, F.A. (2019) A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence, 38(4), pp.54-61.
Wonglimpiyarat, J., (2012) Technology strategies and standard competition—Comparative
innovation cases of Apple and Microsoft. The Journal of High Technology Management
Research, 23(2), pp.90-102.