HI6006: Exploring Strategy Development Tools for Business Growth

This essay provides an overview of strategy development tools used in business, focusing on PESTEL analysis, SWOT analysis, and Porter’s five forces. It explains how PESTEL analysis helps businesses analyze external environmental factors such as political, economic, social, technological, environmental, and legal aspects. Porter’s five forces, including competitive rivalry, threats of new entrants, bargaining power of suppliers and customers, and substitutes, are discussed in the context of analyzing competitive intensity. The essay also covers SWOT analysis, which examines an organization's strengths, weaknesses, opportunities, and threats. Examples from the tourism industry are used to illustrate the practical application of these tools. The essay concludes that these analyses are essential for developing effective business strategies, understanding competitive markets, and achieving organizational growth and profitability. Desklib provides access to similar solved assignments.

Running head: COMPETITIVE STRATEGY
Competitive Strategy
Name of the Student
Name of the University
Author Note

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COMPETITIVE STRATEGY
The purpose of the essay is to understand the various development tools that help to
develop the business. The essay will highlight PESTEL, SWOT and Porter’s five forces that help
in the business to serve with a specific field of analysis of the organization. The report will throw
a brief overview of all the three development tools that help in the strategy making and
understanding the external factors as well the internal factors that play a significant role to drive
the business. It will give clear ideas of the intensity of the competition existing in the rival
market.
PESTEL Analysis
PESTEL analysis as the strategic tool is basically used in business world by many of the
organization. It is used by the business to observe and analyze the external environments that
have an effect on the organization. These factors include the political, economic, social,
technological, environmental and legal factors which are used to shape the business (Theaker
2017). PESTEL analysis can be used by tourism industry to analyze international companies. It
also helps in assessing the global behavior of tourism demand. It will help to identify and discuss
the factors of the macro environment that can have significant impact on the tourism industry.
For example, if the tourist company after analyzing founds that the governments choose to make
shopping tax free for the tourist, which gives the tourist the right to claim back VAT (value
added tax)/GST (Goods and services tax) (Vanhove 2017). This factor can help the tourism
company to attract more of the tourists.
Porter’s Five Forces Analysis
The development tool Porter’s five forces was framed by Michael Porter to influence
principal competitive in market. The Porter’s five forces is used to analyze the strategic tool to

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develop the business strategy, the five forces are competitive rivalry, threats of new entrants,
bargaining power of supplier, bargaining power of customer, substitutes (E. Dobbs 2014). This
analysis helps an organization to identify the competition of business. It is also useful to adjust
your strategy that suits your competitive environment and to measure the level of threat among
the business related forces that drives the activities such as the suppliers and the customers. For
example, the social factor of the Porter’s five forces can influence a huge number of population
interest (Wise and Harris 2017). Similarly, the concerts in the city of Medan resulted into high
traffic of viewers which also contributed in the tourism development of Indonesia. The condition
of global economy is necessary to consider in the tourism industry as it can affect the state of
industry where the certain factors are depending upon the economic factors (Longoni, Golini and
Cagliano 2014).
This analysis helps to prevent the pressures that are being produced from each of the
strong competitive pressure. It could also lead to low level of profitability. It helps in assessing
the intensity of the completion and develops strategy thinking of the business to make effective
strategy to compete with the character of the competitive market. Porter’s five forces also help a
business to select a specific direction to put into its shield from as many competitors as possible.
it characterizes to earn profit when both suppliers and customers are of low threat and with no or
few substitutes, high barriers of new entrance and present rivals in the industry are minimal.
SWOT Analysis
The SWOT analysis was developed by a management consultant named Albert
Humphrey. The SWOT analysis strategy tool is used in business for understanding the strength,
weakness and the opportunity and the threat that are existing in the organization. It is helpful for
the developmental of business as it is used to help an entity whether it is an individual or

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organization to get a place in the market against the competitors. Once the analysis is done the
decision maker will be able to assume if there is a goal to achieve then what is required to make
it successful. Analysis of tourism industry can help to attract factors that may develop the
strategies to transform a destination into authentic destination. For example, Italy tourism spots
on mainly the preserving the ancient ruins, museums and Vatican City to extract its people from
all over the world (Manrai, Manrai and DeLuca 2017). The results of using this factor to use in
tourism showed that Italy became the third most visited country in Europe and fifth in terms of
world ranks focusing on the cultural tourism.
There are various difficulties that are faced by the tourism to deconstruct its classic
aspects o form the quality tourism trends in the post industrial economy. It is important to pattern
and place study process using SWOT analysis to identify the capabilities and market
corresponding to make actions that can help in establishing tourism feasibility in each region
(Shinoj 2016). The tourism industry can use this to develop a small analysis on the weaknesses
and strengths which are internal environments and the opportunities and threats are external
environments. It helps the industry to match and convert its strategy according to its internal and
external environments.
From the above it can be concluded that by using these three different analysis a
company or organization can develop their business strategy from every prospect because it give
them the clear view of their competitive market and the driving forces. Each analysis will help
the business know how to plan their strategy according to the competitors and achieve their
targeted goals for the targeted customers as well. These PESTEL, SWOT and Porter’s five
forces analysis is necessary for every organization to know their current position in the market to

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increase their profitability in their business and for the overall growth and development of the
organization.

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References
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Longoni, A., Golini, R. and Cagliano, R., 2014. The role of New Forms of Work Organization in
developing sustainability strategies in operations. International Journal of Production
Economics, 147, pp.147-160.
Manrai, L.A., Manrai, A.K. and DeLuca, J., 2017. Twenty Shades of Italy: An Analysis of its
Cultural, Natural, and Dual Tourist Attractions with Implications for Global Tourism
Marketing. Journal of Global Marketing, 30(5), pp.297-308.
Shinoj, P., 2016. SWOT Analysis for Assessing Entrepreneurship Readiness.
Theaker, A., 2017. What is public relations?. In The Public Relations Strategic Toolkit (pp. 17-
27). Routledge.
Vanhove, N., 2017. The Economics of Tourism Destinations: Theory and Practice. Routledge.
Wise, N. and Harris, J. eds., 2017. Sport, Events, Tourism and Regeneration (Vol. 65). Taylor &
Francis.