HI6006 Competitive Strategy: Applying Key Strategy Development Tools

This essay provides a detailed analysis of three key strategy development tools: PESTEL, SWOT, and Porter's Five Forces. It explains each model's components and how they are used to assess a company's internal and external environment. The PESTEL analysis covers political, economic, social, technological, environmental, and legal factors affecting businesses. The SWOT analysis focuses on a company's strengths, weaknesses, opportunities, and threats. Porter's Five Forces model examines the competitive intensity and attractiveness of an industry. The essay includes practical applications of these models with examples like Nike, Microsoft and MacDonald to illustrate their use in real-world business scenarios. The analysis aims to provide a comprehensive understanding of these strategic tools for effective decision-making and competitive advantage.

Running head: COMPETITIVE STRATEGY
Competitive strategy
Name of the student
Name of the university
Authors note

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Executive summary
The above study topic deals with the pestel model, swot analysis and the porter five
force model and discusses the implication of the same. The study also gives supporting
conclusions regarding the process.

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Introduction
The study includes the analysis of the three model which are very important for any
business or any company. These models are namely PESTEL, Porters five forces model and
the SWOT analysis model. These models are very much useful to discuss about the current
performance of the companies all over the world. Apart from this the models also discusses
about the basic business procedures and the marketing strategies as a whole. Every process
deals with various different aspects related to all these models. Lastly the detailed
descriptions are provided related to the models and the theoretical aspects as a whole
(Dockalikova and Klozikova 2014).
Discussion
PESTEL analysis
A PESTEL analysis is a process or tool used by the marketers and to monitor the
macro – environmental model which is very much related to the organisation. Hence the
theories or the process will be very much effective for every company to evaluate the overall
performance of the company. Hence the PESTEL stands for –
P= political
E= economic
S= social
T= technological
E= environmental
L= legal

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Political factors
These factors discuss about how and to what degree the government interventions
occurs in the economy. This can include the government policy, political stability in the
overseas market, foreign trade policies, tax policies and the labour law policies and so on.
Hence it is clear from this aspect that the political factors often have an impact on the
operation of the organisation. Hence the organisational rules and regulations are meant to be
useful towards the current and anticipated future legislation and to adjust the marketing
policies (Cadle et al.,2014).
Economical factors
These factors have certain economic and significant factors overall to see the impact and the
overall profitability of the business. These factors includes like economic growth, interest
rate, Inflation, disposable income of the consumers and the business persons. These factors
may be classified into the macro and micro economic. Hence these factors include the
government rate control, taxation and further (Bohari et al.,2017.).
Social factors
These are known as the socio- cultural factors also and they are added to the shared
beliefs and the attitudes related to the factors like populations growth, age distribution, health,
consciousness and the carrier attitudes. These directly influence the marketers as a whole.
Technological factors
These are the factors related to the technological change in the landscapes and the impacts of
the same in the market. These factors work on the three distinct ways like-
 New ways to produce goods and services.
 New ways to distribute goods and services.

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 New ways to connect to the target market.
Environmental factors
These factors have come to existence in the last 15 years or so. They have become an
integral part due to scarcity in the raw materials, pollution targets, doing business or so and to
ensure sustainability to the governments. Hence these are the basic issues which the
marketers could look to face to the process to face the social eternity. These are only be
possible out of a sustainable source.
Legal factors
These factors include health and safety, equal opportunities, advertising standards and
so on. The consumer rights and the rules and regulations are also likely to add certain values
to the marketers regarding this case.
Hence it can be said that the PESTEL analysis have been considered as an important
factor in order to judge and indicate the overall performance of any small or big organisation
towards success. Apart from this all the political, legal, social contexts have been taken care
of properly while valuing the overall performance of any company.
For example the PESTEL analysis of Nike can be considered-
Political factors
 The company always look to impose tax on the goods and abide by the manufacturing
laws.
 Various political conflicts can always make the customers related to the process
difficult or prevent imports and exports.
Economic factors

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 The revenues of this company are to some extent dependent on the low cost of labour
in far eastern countries. This is changing through which means that the product price
across the globe come with less economically developed countries.
 With its deep pocket finances, Nike has the resources chase after small emerging
markets in which they could sell products.
Social factors
The worldwide increases in health consciousness means that more and more
individuals are moving towards better lifestyles. These people will undoubtedly buy plenty of
sports apparel and something which could make Nike very happy.
Technological factors
The company meets legal repercussions for its shady marketing practises that includes
false discounts.
Environmental factors
The company had made a promise of change in the current practises with a strong
resolve to be more eco.
SWOT analysis
It is a framework for identifying and analysing the internal and the external factors
which can have an impact over the viability of a project, product and the process place or any
person. Hence it is an important tool to be used by the business entity or any kind of non-
profit organisation. To a lesser degree or any individual for to assess and address certain

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situations or initiatives, products and process as a whole. Hence a SWOT analysis is done to
start as a project or some planning exercise. The framework is considered to be very much
supportive for the decision making because it is an entity to cover all the aspects and the
possible opportunities as a whole. For example a market niche of a business can bring out the
competitive opportunities and different other process and procedures as a whole. Hence it
could look to bring the carrier success and the path to maximize the whole carrier set up as a
whole. Hence it can add certain achievement value.
Elements of SWOT analysis
The SWOT analysis have four areas to consider namely
Strength
It I the internal abilities and the resources that support the successful outcome.
Weakness
The process discusses about the all over internal attributes and the resources to follow
against the successful outcome.
Opportunities
The several external factors ant the process can initially look to capitalize and use
certain advantage.
Threats
These are been considered as the external factors which could look to follow the
company success.
Hence a SWOT matrix is an item which could be identified and to be divided into
four quadrants. Hence it is a matrix whose quadrants does represent the decision makers

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strategies and could look to list out the basic changes that could be implemented In the case
to run a business. Thus the entities could look to undertake the SWOT analysis and hence it
could look to adapt the possible Templates of existence. Hence these templates could
generally follow the four quadrant matrix.
The SWOT analysis requires to follow certain steps for the decision making purpose
for any kind of entity, organisation or the business groups. The various tools exist in the
business aspect for a series of question under which the changes could initially be applicable.
For example the decision making elements are to be useful in this context and it actually
describes the advantages it has gained over the others and hence have looked to evaluate the
overall market trends and increase to the sales volume. The process have also looked to
describe the best possible market advantages it could look to have over the business
competitors as a whole. Hence the process have looked to identify the possible opportunities
and threats as a whole. Thus the SWOT analysis is a good tool to initiate the overall market
performance overall.
Therefore it can be said that in order to determine a company’s strength, weakness,
opportunity and threat the SWOT analysis have been considered as a vital part. Moreover this
analysis helps the company management to work on the weakness and moreover to utilise the
strength properly to be one step ahead of the other company.
For example the SWOT analysis of Microsoft can be considered. These are as follows-
Strength
 The applications and operations capacity forth with afresh created online account
arrangement capacity.
 Flexible workforce through accidental workers at seasonal or cyclical rate.
Weakness

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 The company have not yet came up with some new branded products.
 Falling sales on the operating system and the server software sectors.
Opportunity
 Cheaper all around telecommunication costs available to the new market shares.
 Acceptance a part of human for the internet access.
Threat
 Apple and Linux abuse Microsoft’s 80 percent bazaar allotment of the desktop
operating market.
 Department of justice antitrust actions and the added accepted creates ambiguity a
part of advisors back its aftereffect is known.
Porters five force model
The five force model of porter have to underline the main key components for the
process-
These forces have to determine the possible industrial structure and the level of
changes to see whether it is less profitable for the cases. Hence the industry with low
products and the suppliers have made to adjust the best possible changes relating to the
process. Hence the same could be initiating with the low profitability valuation. The five
force model are as follows-
Threats of new entrants
The theory have determined to enter to any particular industry. Hence there are certain
areas to consider and the changes to be looked to intensify the major relevant changes. Hence
the same could look to provide high barriers when-

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There is low amount of capital entering in the market.
 No government regulation.
 Bargaining power of suppliers
The buyers have the power to demand low price and the high product quality will be
getting to the lower revenue producers.
 Only few buyers could exist
 Buyers are price sensitive
 Threats of substitutes
The force is looking to threaten the buyers who can easily and the substitute products
with attractive prices or the better changes related to the process. Here the service cost
products and the little cost to be initiated in this process. Hence for example customers
switching from coffee to tea does not cost anything and the same could be considered in the
case of car to bicycle.
Rivalry among the existing competitors
It is a major areas to consider where the competitive and profitable industry is
implemented over here. Hence in the competitive industry the firms come to compete over
the market share which could result in the low profits. Hence the rivalry among the
competitors is intense when-
 There are many competitors.
 Exit barriers are high
 Industry of the growth are very high to this aspect.
 The products are not differentiated and can be easily subtle.
 The competitors are of the same size.

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 There is a low customer loyalty (Niederwieser et al.,2016).
Although porter had already been introducing the major changes that can be implemented
in this concept. Hence it can be said that the components haven demanded to overpower the
basic and the primary products that have ensured a lot of value addition in the process. Hence
the porters five force model is also a big tool to consider the data value.
Hence the porter’s five forces model is also an important area to consider as a whole. The
process have been important also to know about the possible market threat, new market
entrances competitor rivalry and the other important areas. Hence this model plays a vital role
to the company better.
However an example of MacDonald can be considered in this regard. These are as
follows-
Competitive rivalry with firms
 High number of firms- strong force
 High aggressiveness of firms- strong force
 Low switching cost- strong force
Bargaining power of customers of MacDonald’s
 Low switching cost- strong force
 Large number of providers- strong force
 High availability of supplier- strong force
Bargaining power of suppler of MacDonald’s
 Large number of suppliers- weak force
 Low forward vertical integration of suppliers- weak force
 High overall supply- weak force

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Thereat of substitutes
 High substitute available- strong force
 Low switching cost- strong force
 High performance –to – cost ratio of substitutes- strong force.
Threats of new entrants
 Low switching cost- strong force.
 High variable cost of capital – moderate force.
 High cost of brand development – weak force
Conclusion
Hence it can be concluded that the basic theories and the model relating to the
marketing and the business valuation model like the SWOT model, PESTEL model and the
porters five force model have been initiated over the market and the same have initiated the
basic changes In the process. Apart from this the models are been very much effective to the
business concerns as a whole. Hence it can be said that the correct and effective use to this
process is very much useful for the future perspectives as a whole.

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