HI6006 Competitive Strategy: Industry Analysis Using Strategic Tools

This essay explores competitive strategy through the analysis of three distinct industries: tourism (Lizard Island resort), age care (Age Care Guild), and childcare (Umina Child Care centre). It applies strategic development tools such as the five forces analysis, SWOT analysis, and the Industrial Organisation (I/O) model to assess the competitive landscape and potential for success in each sector. The five forces analysis examines the tourism industry, focusing on the threat of new entrants, bargaining power of suppliers and buyers, the threat of substitutes, and rivalry among competitors. The SWOT analysis evaluates the strengths, weaknesses, opportunities, and threats for the Umina Child Care centre. The I/O model is applied to the Age Care Guild, emphasizing the importance of the external environment and strategic alignment for achieving high returns. The essay concludes that these strategic tools are essential for organizations to develop effective strategies, analyze risks, and maintain a competitive edge in their respective markets. Desklib provides access to similar solved assignments for students.

HI6006
COMPETITIVE STRATEGY
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Contents
Essay...........................................................................................................................................................3
Lizard Island resort...............................................................................................................................4
Five force analysis model......................................................................................................................4
Umina Child Care centre......................................................................................................................5
SWOT analysis......................................................................................................................................5
Age Care Guild......................................................................................................................................7
Industrial Organisation Model (I/O)....................................................................................................7
References..................................................................................................................................................9
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Essay
In today's world, a market is full of competition with many new and innovative businesses. Each
and every business owner is giving tough competition to its competitors by generating various
strategies with the aim to achieve goals and objectives. Development of a strategy is very
necessary in order to compete and achieve success in the market. The strategy supports business
organisations to be successful by making innovative as well as creative services and products.
Development of a strategy also assists in doing an analysis of the market and competitors so as to
make plans accordingly. In order to make strategies, there are various strategy development tools
being used by the business firms like PESTEL, SWOT, five force analysis, resource-based view,
input/output model etc. In this assignment, there will be a discussion of the few models on the
basis of three chosen industries. Tourism, age care, and child care industry is being selected.
Under tourism industry ‘Lizard Island resorts' is selected, under age care ‘Age care guild' is
selected and under childcare ‘Umina Child Care centre' is selected. Three business strategy tools
will be applied to these companies and the proper analysis will be made.
Development of a strategy is one of the important things for the businesses as it assists in
delivering several outlines so as to attain goals and objectives for the achievement of success. It
is also important for the purpose of competitive strategy. Strategic planning is being termed as a
tool used for making decisions and applying changes in the in several business approaches for
the purpose of success (Rothaermel, 2015). The three strategic development tools like five force
analysis, SWOT, and I/O are being described here.
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Lizard Island resort
Five force analysis model
(Source: OvidijusJurevicius, 2013)
This model is being defined as the analysis tool that makes use of five forces of industry in order
to make a determination regarding the intensity of the competition in a tourism industry as well
as its level of profitability. Tourism industry i.e. ‘Lizard Island resort’ is one of the rapidly
growing industry is contributing well to the development of country's economy. Due to its
increased market, there are various competitors also due to whom it is necessary to make a
strategy for the purpose growth and development.
There are five forces that make a determination of the structure of an industry as well as the
competition level. The threat of new entrants describes that how easily entrance can be made in
an industry. If an industry is making a profit and there are fewer barriers to enter, rivalry
intensifies. When more association compete for a similar market then there is a fall in profit. It is
necessary for the tourism industry to develop high barriers to make entry to discourage new
entrants (Rothaermel, 2015). The strong power of bargaining allows suppliers to make the selling
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of low quality or high priced raw material to the buyers. This makes an impact on the profits of
the buying firms as they need to pay more for the material. There is bargaining power of
suppliers when buyers are many but suppliers are few, the existence of few raw material
substitutes, there are scarce resources with suppliers and cost of switching material is high. As
per the bargaining power of buyers, they are having the power to make a demand for high-
quality products and low prices from the producers of the industry when there is a strong power
of bargaining. Due to the low price, there will be low revenue while high product quality
increase cost of production. The threat of substitutes force threatens when substitute products or
service are easily available to buyers in better quality and affordable prices. In the tourism
industry, a threat of substitute is high as there are many competitor industries that attract
customers towards them. Last force is rivalry among competitors; it determines how profitable or
competitive an industry is. The tourism industry in the competitive market has to make
aggressive competition in order to have a market share that supports in generating profit.
Umina Child Care centre
SWOT analysis
(Source: Presentationgo, 2018)
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In order to have a proper child care centre, ‘Umina Child Care centre’ must make consideration
of feasibility with the support of the detailed study. One of the ways to make an evaluation of the
potential success in operating child care centre is by doing SWOT analysis to look for Strengths,
Weaknesses, Opportunities, and threats.
The strength area analyses demand the services of child care centre. There are many people now
a day's who work as well as a single parent is in a need for child care for their children. In terms
of satisfaction, the strength of this business is that it makes provision of the creative aspect for
owners who are able to make the development of a theme and curriculum of the early childhood
to be utilized. In the analysis of SWOT, potential weaknesses in regards to the business model
must also be analysed. Child care centre requires a license to make operations and have to be in
compliance with various laws. There is also an inclusion of daily running cost that includes food
and utilities (Urban et. al., 2012). Overall maintenance of the centre can also be very expensive
that somewhere give weakness in the business. Association of the potential opportunities in
relation to child care business is exciting. There are also chances of growth that not just involve
children but also the possibility of additional buildings. Child care centre is having an
opportunity to give services to the families who are having low income with the support of
various government programs. As per the aspect of threat, day care centre must focus on the
competition, basically from the organisations that offer in-house care of a child. A risk is also
there in regards to the high staff turnover and the problems in finding qualified members of staff.
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Age Care Guild
Industrial Organisation Model (I/O)
(Source: Open learning world.com, 2012)
The I/O model is being used in ‘Age Care Guild’ an aged care organisation which provides
services to the old people regarding food, residence etc. This model is being based on several
assumptions like the external environment- the general, competitive environment and industry
impose constraints and pressure on organisations and supports in determining strategies that will
support in generating high returns for the aged care industries. In this model there is an inclusion
of five steps; external environment is being studied so as to know its characteristics that will
make determination regarding strategic alternatives of a company, secondly an industry is being
selected i.e. aged care for high returns on the basis of its characteristics, after that selection of
various strategies are being done that will support in giving high average return, develop and
acquire required assets and resources skills to make implementation of strategy that has been
chosen, in the end implementation of selected strategy is being done for its overall success (Lin
and Wu, 2014).
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This model is being applied by aged care organisation in order to get success by providing good
services to the individuals in comparison to the other competitive association.
From the above essay, it has been analysed that there are various strategic tools that are being
used by the organisations so as to attain various objectives and goals. Here three models are
being described as five force analysis, SWOT analysis and I/O model by three different
industries. All these tools support in making an effective strategy for the companies so that they
will be able to make healthy competition in the market. Development of the strategy supports in
analysing risks as well as competitors so that the strategy can be made accordingly.
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References
Open learning world.com, 2012. The I-O model. [Online]. Open learning world.com. Available
at: http://www.openlearningworld.com/books/Introduction%20to%20Strategic
%20Management/Alternative%20Models%20of%20Developing%20Strategic
%20Competitiveness/The%20I-O%20Model.html. [Accessed on 9 may 2018].
Presentationgo, 2018. SWOT analysis matrix for power point. [Online]. Presentationgo.
Available at: https://www.presentationgo.com/presentation/swot-analysis-matrix-powerpoint/.
[Accessed on 9 may 2018].
OvidijusJurevicius, 2013. Porter’s five force. [Online]. Strategic Management. Available at:
https://www.strategicmanagementinsight.com/tools/porters-five-forces.html. [Accessed on 9 may
2018].
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Urban, M., Vandenbroeck, M., Van Laere, K., Lazzari, A. and Peeters, J., 2012. Towards
competent systems in early childhood education and care. Implications for policy and
practice. European Journal of Education, 47(4), pp.508-526.
Lin, Y. and Wu, L.Y., 2014. Exploring the role of dynamic capabilities in firm performance
under the resource-based view framework. Journal of business research, 67(3), pp.407-413.
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