Holmes Institute HI6006 Competitive Strategy: Key Strategy Tools

This essay provides an in-depth analysis of four key strategy development tools: SWOT analysis, PESTEL analysis, Porter’s Five Forces model, and the Resource-Based View. It explores how these tools are used to understand the organizational environment, assess internal and external influenc...Read More

Key Strategy Development Tools 1
KEY STRATEGY DEVELOPMENT TOOLS
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Key Strategy Development Tools 2
Introduction
Planning in business is the most significant thing of every organization in the market.
Strategic development tools are significant as they help various business stakeholders to
understand the organizational environment and think more strategically concerning their business
operations. There are various common systems are accessible, although some approach to the
front position more regularly than others does in business operations (Arnaud, Mills, Legrand,
and Maton 2015). Some of the key strategic development tools in operations comprise of SWOT
analysis, PESTEL analysis, Five Porters’ force framework, PROFIT, Resource-Based View,
Ansoff, Ghemawat, Generic Strategies, and input or output among other business development
devices. Additionally, strategic planning by use of development tools involves consideration of
potential internal as well as external influences on the corporation together with plotting out the
method to pact with such influences in the operations. From the marketing point of view,
strategy development tools focus on the needs of different customers, competitive factors in
business operations, and organizational advantages. The numbers of tools are used to guarantee
that the plans alongside policies created are a suitable plan that can be set in actions to enhance
operations of the business (Kara 2018). Therefore, this research paper focuses on examining the
main strategy development tools and how they are used in business operations. The four strategy
development tools that will be used in this examination consist of SWOT examination, Model of
Porter’s Five Forces, PESTEL examination, together with Resource-Based View, analysis.
Strategy development tools are and how they are used in business
SWOT Analysis

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The analysis of SWOT remains to be a device employed in tactical preparation to
discover, and finally, prioritize corporations’ forces, flaws in operations, chances, alongside
threats that negatively affect their productions. Besides, SWOT analysis according to Alfanda
and Suhartanti (2018) is a short form that sites for these elements that affect operations of
businesses both positively and negatively. The process comprises of a devising meeting where
contestants develop the catalog for each of these regions rooted in past collected data as well as
business data. Once the records are developed, the grading process is exploited to prioritize
different elements so that the top matters in every group can be exploited to offer the base for the
progress of business tactics, aims, and strategies (Muzumdar 2013). The use of this strategic
development tool in business operations helps managers and other business operators to develop
a dialogue with stakeholders to attain varied viewpoints concerning the needs of different
customers in the current competitive marketplaces (Liu and Li 2017). The use of this tool of
strategic development offers a better way on how business operators can increase their strength,
reducing the consequences of their flaws, create the most of any chances as they operate, and
decrease the effects of any danger in their operations.
PESTEL analysis
PESTEL Analysis is one of the essential tools of strategy development of a business. It
refers to the concept that is found within principles of marketing in business operations. Besides,
this strategy development tool remains to be a concept that is used as the device by businesses to
track the environment that they are operating in or are planning to launch a fresh service or
product in the operations. PESTEL analysis helps business operators to determine how various
political factors, financial aspects, social elements, technological advancements, and legal

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alongside environment aspects will impact the routine operations in the long-run (Kara 2018).
This tool of strategy development is always used in collaboration with different analytics
business tools that consist of SWOT analysis along with Porter’s 5 forces to offer the apparent
perceptive of the circumstance and linked internal as well as external aspects affecting business
operations. All aspects of this strategy development tool are significant for any business unit
within an industry. More than just the need to understand the market setting, this structure
represents one of the vertebras of the backbone of strategic management process that only
defines what a corporation need to do, but it also accounts for the organizational mission and
goals alongside strategies stringed to their operations. For instances, this tool assesses how
different government regulations together with legal aspects are evaluated in conditions of their
capacity to influence setting of trade and marketplaces where trade occurs. Through the use of
this tool, businesses can examine the economic concerns that are clear to have an influence on
operations of organizations (Liu and Li 2017). Therefore, with examination o social aspects
through this tool of strategic development, businesses can analyze the socio-financial settings of
its marketplace.
Porter’s Five Forces Model
It is a business device that assists managers to understand where their businesses power
lies about present competitiveness in the marketplace along with future positioning strength. The
tool forces managers of various businesses to analyze the bargaining power of various suppliers
and clients. It also helps most business operators to be capable of examining various threats to
the new entrants and substitutes that can have impacts in their operations (Göral 2015). Besides,
Porter’s Five Forces aid in the process of understanding the competitive rivalry that exists in the

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marketplace. Hence, the use of this strategic tool for development in business operations can help
various business operators to understand the balance power as well as to identify areas of
potential profitability in their operations efficiently. The model of Porter’s is thus essential in
business operations, and it needs to be used at the line of business level. Additionally, this model
of strategic development tool offers the foundation for organizations to engage in tactical
planning to believe important aspects that are affecting the operations of businesses (Muzumdar
2013). Therefore, by use of this model, most businesses can be able to build a strategy to keep
ahead of every influence that affects their operations such as bargaining strengths of suppliers or
buyers.
Resource-Based View
The strategic development tool of Resource-Based View refers to the managerial
structure used in the process of determination of the strategic resources with the potential to
deliver competitive merit to the organization. It is a tool that can be used or exploited by an
organization to attain sustainable competitive merit in the current competitive marketplaces (Li
2014). Besides, this tool concentrates on managerial concentration on the internal possessions of
business in the effort that aims at identifying different assets, capabilities, together with
competencies with the potential to give business superior competitive advantage in a business
environment. The tool is best applied for different types of assessment of the existing portfolio of
resources that exist in business operations. In business operations, Resource-Based View tool
offers the fundamental direction for the strategy of the organization. It also acts as the
fundamental source of profit for the operations of organizations (Lockett and Wild 2013). In
most cases, Resource-Based View perceives that value derived from skills of management,

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capabilities of data, together with administrative processes that is regarded as scarce elements
necessary to generate financial rents.
Conclusion
It is clear from this discussion that the strategic development tools are significant in the
management and operations of businesses around different marketplaces. Some of the key
strategic development tools in operations have been found to include SWOT analysis, PESTEL
analysis, Five Porters’ force framework, PROFIT, Resource-Based View, Ansoff, Ghemawat,
Generic Strategies, and input or output among other business development devices. All the four
examined strategy development tools in this study focus on improving business operations in one
way or the other. The need to understand these tools of strategic development and how they
apply to the business can enable the businesses to adjust their business strategies. These tools can
help businesses to use their resources better to generate higher earnings for its investor and offer
quality products along with services to targeted customers.

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List of References
Alfanda, R. and Suhartanti, P. (2018). SWOT Analysis: How to Promote Halal Tourism in
Aceh?. Sebelas Maret Business Review, 2(2).
Arnaud, N., Mills, C., Legrand, C. and Maton, E. (2015). Materializing Strategy in Mundane
Tools: the Key to Coupling Global Strategy and Local Strategy Practice?. British Journal of
Management, 27(1), pp.38-57.
Göral, R. (2015). Competitive Analysis of the Hotel Industry in Konya by Using Porter’s Five
Forces Model. European Journal of Economics and Business Studies, 3(1), p.106.
Kara, E. (2018). A Contemporary Approach For Strategic Management in Tourism Sector:
PESTEL Analysis on The City Muğla, Turkey. Journal of Business Research - Turk, 10(2),
pp.598-608.
Li, Y. (2014). International Strategic Alliance and Its Performance in China: The Resource-
Based View. International Journal of Business and Management, 9(11).
Liu, X. and Li, J. (2017). SWOT and PESTEL Analysis on the Coordinated Development of
New Urbanization and Agricultural Modernization in Heilongjiang Reclamation Area. DEStech
Transactions on Economics, Business and Management, (eced).
Lockett, A. and Wild, A. (2013). Bringing history (back) into the resource-based view. Business
History, 56(3), pp.372-390.

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Muzumdar, P. (2013). Business Model Development Through Corporate Strategy Design: IBM
SWOT Analysis. SSRN Electronic Journal, 5(1), pp.7-26.