HI6006 Assessment 1: Strategy Development Tools - PESTEL, SWOT, 5F

This essay provides a detailed explanation of key strategy development tools, including PESTEL analysis, Porter's Five Forces, and SWOT analysis, and demonstrates how these tools are applied in business contexts, particularly within the Australian tourism industry. The PESTEL analysis examines political, economic, social, technological, environmental, and legal factors affecting businesses. Porter's Five Forces model assesses the bargaining power of buyers and suppliers, competitive rivalry, barriers to entry, and threats from substitutes. SWOT analysis identifies strengths, weaknesses, opportunities, and threats. The essay emphasizes the importance of these tools for strategic planning and decision-making to enhance organizational growth and profitability. It uses practical examples to illustrate how these frameworks can be used to analyze market dynamics and formulate effective strategies.

HI6006
Assessment 1: Individual
Assignment
Tourism
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Table of Contents
Introduction.................................................................................................................................................3
Main context................................................................................................................................................3
PESTEL...................................................................................................................................................3
Five Forces..............................................................................................................................................4
SWOT.....................................................................................................................................................6
Conclusion...................................................................................................................................................7
References...................................................................................................................................................8
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Introduction
The paper will help in explaining the main strategy development tools and the way of using them
in order to execute the concerned business processes. PESTEL analysis is used in order to
determine the factors related to the political and economic factors that can impact on the growth
of the business. The use of the Five Forces is done mainly to investigate the demands of the
customers and formulation of the specific strategy to increase the profitability of the firm. SWOT
analysis is to investigate the strengths and weaknesses of the industry o the firm and to use the
opportunities available by reducing the crucial threats.
Main context
Development of the strategy is considered as t be vital for the growth and development of an
organization. There are various tools which need to be analyzed effectively in order to develop
effective strategies, these are PESTEL, SWOT and Five forces.
PESTEL
Political factors
Australia is considered as one of the most politically stable countries that provides desired
platform for various types of business organizations to execute their respective business
processes. The country is considered as to be the safe destination for making suitable
investments and the tourism sector is rising significantly throughout Australia and thus, it will
provide opportunities to all of the tourism business organizations (Johnson, 2016). The country
is having skilled candidates throughout different parts of the country and it retains multi-lingual
workforce which helps in enhancing the growing economy.
Economic factors
The prices of various properties are increasing high in relation to the income levels throughout
Australia and it has created the great demand for the rental properties. It is very important for
the tourism companies to analyze capital growth, off-plan, exchange rates of the currency and
economic stability (Darcy et al., 2017). The currency exchange rates against the euros, dollars as
well as sterling are found to be favorable within the Australian market segments. Therefore, it
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attracts the foreign market investors in order to invest more in the execution of various business
processes relating to the tourism industry.
Social factors
The use of the social factors is crucial and is used as the vital tool for developing the effective
strategy for the concerned organization. The understanding of the social stratification such as the
classes and caste in order to enhance the evaluation of the business processes (Jarzabkowski and
Kaplan, 2015). The wealthiest 5-10% of me people are considered into the upper groups and
strategies needs to be formulated as per the income groups of the people so that the profitability
can be maximized.
Technological factors
The development of the latest and innovative factors are of great importance as it provides the
desired competitive advantage to the concerned organizations throughout the competitive market
areas. Bringing up of the latest innovative technologies is important in order to attract a large
number of the customers towards the firm and thus, technological factors act as the vital tool for
a formulation of marketing strategies.
Environmental factors
These include the crucial changes related to the climate and weather. The changes in the
temperature can generate the significant amount of impact on the tourism industry and thus,
formulation of the suitable strategies needs to be done in order to execute the concerned business
practices (Song et al., 2017). There should be proper strategies in order to handle the issues from
global warming and thus, it is the useful tool for the development of marketing strategy.
Legal factors
The legal factors are generally related to the legal environment in which the firm is going to
operate. Sometimes there are few of the contractual issues that affect the execution of the
business processes in various ways. The vital elements that play the active part information of a
particular contract area offer as well as acceptance.
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Five Forces
Identification of the five forces is vital as it helps in bringing the desired elevation in the
evaluation of the concerned business processes. The use of the five forces is done in order to
understand the business requirements as per the availability of the products or services
throughout the concerned market segments.
Bargaining power of buyers
This refers when the consumers retain more options from the concerned market segments
regarding the purchase of a particular product or service. It has become easier for the consumers
to find out the best product or service for them by searching on online. There exists very less
requirement of the travel agents in order to plan for the holiday trip and this has transferred the
power in the hands of the buyers (Mkude and Wimmer, 2015). The help of this model helps in
predicting the ability of the power of bargaining for the buyers to eliminate the intermediaries.
Competitive rivalry
The rivalry among the competitors throughout the tourism field is considered as to be fierce. It is
nee of the crucial aspects that help the buyer in differentiating among the competitors and the
services as well as products offered by them. When the customers gather knowledge regarding
the offers provided the firms, the internet effectively reduces the differences between he
concerned competitors (Bull et al., 2016).
Barriers to entry
The initial investment in the tourism generates a barrier towards the entry but it is somewhat
reduced by the use of internet technology (Balasopoulou et al., 2016).The understanding of these
barriers is of great importance in order to develop the suitable strategy for promoting the growth
of the business. One of the vital barriers within the tourism industry is the differentiation.
Bargaining power of the suppliers
It helps in referring that when the power is retained in the hands of the suppliers. It is the primary
motive of the business organizations to increase the demand of a particular product throughout
the concerned market areas as this helps in selling the products to a certain high range and the
entire power goes into the hands of the suppliers (Greenspan, 2015).
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Threats from substitutes
The development of the similar products as well as services from the various competitors refers
to the crucial threats obtained from the substitutes (Wind and Hays, 2016). It increases the
competition level across the companies regarding the selling of a particular product and thus,
there exists crucial importance to develop the suitable strategy that will help in increasing the
productivity as well as the profitability of the concerned organization.
SWOT
The use of the AWOT analysis in main strategy development is done to investigate the strengths,
weaknesses of the industry or the concerned organization. Moreover, it also evaluates the
opportunities that are available by reducing the potential threats all across the concerned market
segments (Bohari et al., 2017). An example for the SWOT analysis of the tourism industry has
been provided below:
Strengths Weaknesses
 World class nature
 Safer Australian environments
 Suitability to work wild traveling
 The large area of wild animals
 Famous as well as the bus destination
 Cost expensive
 Immense distances
Opportunities Threats
 Fast progressing economies
throughout Asia
 Suitable place for investment and
tourism infrastructure
 A craze for tourism destination among
youth
 Change in weather and climate
 The changes in the exchange rates
 Environmental destruction
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Conclusion
The paper effectively provides knowledge regarding the development of the strategy which is
used in order to execute business methods. Three strategy development tools have been taken
into consideration for the analysis of Australian tourism, they are PESTEL analysis, Five Forces
and SWOT analysis. Analyzing the factors that can generate great impact on the business is
crucial and tease tools help in identifying the demands throughout the market segments.
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References
Balasopoulou, A., Latour, D., Kousoulakou, H., Michael, N., Mc Kenzie, D., Mair, A.,
Vontetsianos, T. and Geitona, M., 2016. The use of PESTEL as a change management tool to
inform change management of polypharmacy and adherence to SIMPATHY program.
International Journal of Integrated Care, 16(6).
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).
Bull, J.W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sites, N., Baulcomb, C.,
Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., 2016. Strengths,
Weaknesses, Opportunities, and Threats: A SWOT analysis of the ecosystem services
framework. Ecosystem services, 17, pp.99-111.
Darcy, N.M., Somi, G., Matee, M., Wengaa, D. and Perera, S., 2017. Data Dissemination and
Use (DDU) Strategy Development: Design of the DDU Strategy Methodology. Journal of
Health Informatics in Africa, 4(1).
Greenspan, R., 2015. Walmart: Five forces analysis (Porter’s model). Panamore Institute.
Jarzabkowski, P. and Kaplan, S., 2015. Strategy tools‐in‐use: A framework for understanding
“technologies of rationality” in practice. Strategic Management Journal, 36(4), pp.537-558.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Mkude, C.G., and Wimmer, M.A., 2015, May. Studying Interdependencies of E-government
Challenges in Tanzania along a Pestel Analysis. In ECIS.
Song, J., Sun, Y. and Jin, L., 2017. PESTEL analysis of the development of the waste-to-energy
incineration industry in China. Renewable and Sustainable Energy Reviews, 80, pp.276-289.
Wind, Y.J., and Hays, C.F., 2016. The Five Forces Driving the Need for Change. Beyond
Advertising: Creating Value Through All Customer Touchpoints, pp.5-24.
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