Competitive Strategy Analysis of PurePonics: PESTLE & SWOT

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This report provides a comprehensive analysis of PurePonics, an innovative Australian startup in the agriculture industry, focusing on its competitive strategy. It employs PESTLE analysis to assess the external business environment, Porter's Five Forces to identify competitors and their impact, SWOT analysis to evaluate the internal environment, and Ghemawat's CAGE framework to analyze patterns of trade and the flow of information, capital, and people. The report covers PurePonics' background, external factors (political, economic, social, technological, legal), competitive forces (supplier power, buyer power, new entrants, substitutes, industry rivalry), cultural, administrative, geographical, and economic distances, and internal strengths, weaknesses, opportunities, and threats. The conclusion highlights the importance of adapting to the external environment and provides recommendations for PurePonics to enhance its market position. Desklib offers a platform for students to access past papers and solved assignments for further study.

COMPETITIVE STRATEGY
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Executive summary
This report has been developed on the PurePonics company which is an innovative Australian
Start-up established in the year of 2016. This report has defined the external business
environment effect on the organisation by the use of PESTL analysis. The Pestl analysis has
effectively analysed the external environment of the company and effect on its internal
operations. Porter five forces strategy is also explained in this report to identify the competitors
of the company’s and effect on the business of the PurePonics.SWOT analysis tool is also used
in this report to analyse the internal environment of the company. Ghemawat’s cage strategy is
also analysed in the report which has helped to analyse patterns of trade and the flow of
information, capital and people.
Background information of the company
PurePonics is working in the agriculture industry and having focused to produce the pure
vegetables and fruits. The company has focused to produce better taste, less waste in the
production. It is also focused to grow crops and vegetables near the market to provide fresh
products to the customers. PurePonics is an innovation-based company which was incepted in
the year 2016 to provide fresh and safe food to the users (PUREPONICS, 2016).
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Table of Contents
1.0 Introduction................................................................................................................................5
2.0 External analysis........................................................................................................................ 6
2.1 Political.................................................................................................................................. 6
2.2 Economical............................................................................................................................ 6
2.3 Social.....................................................................................................................................6
2.4 Technological........................................................................................................................ 6
2.5Legal....................................................................................................................................... 7
3.0 Porter’s five forces strategy....................................................................................................... 8
3.1 Bargaining power of suppliers...............................................................................................8
3.2 Bargaining power of buyers...................................................................................................8
3.3 Threat of new entrants...........................................................................................................8
3.4 Threat of substitutes...............................................................................................................8
3.5 Industrial rivalry....................................................................................................................9
4.0 PankajGhemawat (Cage strategy)............................................................................................10
4.1 Cultural distance.................................................................................................................. 10
4.2 Administrative distance.......................................................................................................10
4.3 Geographical distance..........................................................................................................10
4.4 Economic distance............................................................................................................... 10
5.0 SWOT analysis........................................................................................................................ 11
6.0 Conclusion & Recommendations............................................................................................12
References......................................................................................................................................13
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1.0 Introduction
This report will be based on the PurePonics Company which is working in the agriculture
industry to produce fresh and safe vegetables and crops for the people. This report will make a
discussion on the external business environment of the organisation through the use of Pestl
analysis tool. After this, the report will discuss the competitive environment of the company
through the use of Porter’s five force strategy to discuss the competitive environment of the
company. It is essential to analyse the competitive environment of the organisation to identify
the threat of competitors and their possibilities in the future. After this, the report will turn on the
Pankaj Ghemawat’s Cage strategy which is used to analyse the flow of information, people,
capital and also to analyse the trade patterns. Swot analysis tools will also be used in this report
to analyse and evaluate the internal environment of the company.
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2.0 External analysis
PESTL analysis tools are used here to analyse the external environment of the company. It is an
effective tool which covers the almost possible elements which affect the organisation. PESTLE
analysis is given below of the PurePonics:
2.1 Political
Policies developed by the government create a huge effect on the organisation and it is essential
to adopt the government policies effectively in the organisation. Finance policies, budget, fiscal
policies and tax are designed by the government which creates a huge effect on the
organisation’s internal financial structure (Adeoyeand Elegunde, 2012).
2.2 Economical
GDP, unemployment rates, education, inflation rates are considered in the economic factor
which creates a huge effect on the production and performance of the company. Higher inflation
declines the value of the product according to which company has to make changes in the
production of the products.
2.3 Social
Social acceptance, traditions, social values, festivals and occasions are considered in the social
factors. It is essential to consider these factors to develop better products for the targeted
customers by the PurePonics.
2.4 Technological
Innovation and change in technology effects on the performance of the company. PurePonics is
working in the agriculture industry to produce fresh and chemical fewer vegetables and fruits for
the customers. It is essential for the company to use new technology to provide better products
(Adeoye and Elegunde, 2012).
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2.5Legal
The legislation provides a framework for the company to protect the benefits of the customers
and eliminate the possibilities of unethical work in the organisation. It is essential for the
PurePonics to consider the rules and acts related to the agriculture industry.
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3.0 Porter’s five forces strategy
3.1 Bargaining power of suppliers
Suppliers create huge impacts on the consideration of the cost and price of the product. As the
PurePonics is engaged in the production of the fresh vegetables and fruits so it has less threat or
effect on the company. The company does not have any supplier for products so it has less effect
on the supplier power on the production of the products and as well as on the cost of the
products.
3.2 Bargaining power of buyers
PurePonics is working in the business to customers market so it has a huge influence on the
customers. It is essential for the company to consider the demands of the customers in the
product ranges and in determining the price of the products. Most of the customers wantpure
hygienic vegetables and fruits in which has been developed with the natural process in the lesser
price so it is essential for the company to develop a better channel to produce the products in the
lesser cost (Dobbs, 2014).
3.3 Threat of new entrants
PurePonics is working with the new innovation to produces fresh vegetables and fruits for the
customers who have a need of this. The company has a huge threat of the new market entrants
due to a large scope for the company in the future. It is essential for the company to use the
better techniques to decline the threat of new entrants in the market.
3.4 Threat of substitutes
Fresh vegetables and fruits are the final outcomes of the PurePonics which has fewer substitutes.
The company is not using any type of chemical in producing the products which decline the
threat of the substitutes.
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3.5 Industrial rivalry
The PurePonics is working in the agriculture industry but it has a new concept to grow crops so it
has a less market rivalry. But it has a huge threat to enhance the market competition in the future
(Yunnaand Yisheng, 2014).
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4.0 Pankaj Ghemawat (Cage strategy)
This strategy works to analyse the difference in the culture, administration, geographical and
economy. The strategy is explained below in the context of the PurePonics Company:
4.1 Cultural distance
People belong to different culture effect on the internal working environment of the organisation.
The PurePonics Company has less threat of the cultural distance due to the majority of the people
belonged to Australian culture (Ghemawat, 2014).
4.2 Administrative distance
This factor is related with the difference in the historical and political association of the nations
in which a company is working. The PurePonics is working in Australia only so it has less effect
of this factor on the operations.
4.3 Geographical distance
Geographical distance also effects on the organisational operations which are working in the
different geographical areas. Ghemawat has considered the distance between the two countries in
which the company is working. Profitability and performance are affected by the difference
between the two nations.
4.4 Economic distance
People belong to a different country are having a huge difference in the terms of purchasing
power and living of standards which effects on the sales of the company. As the PurePonics is
working in Australia only so it has less effect on the operations and performance due to
economic distance (Ghemawat and Altman, 2016).
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5.0 SWOT analysis
SWOT analysis tool is used to analyse and evaluate the internal environment of the company
which is significant. Different factors are considered in the SWOT analysis which is given
below:
Strength
 An innovative concept in the
agriculture production is the key
strength.
 Skilled employees support to make
changes according to the external
situation of the company.
Weakness
 The internal structure of the company is
the key weakness.
 Inappropriate internal organisational
structure effect on the operations.
Opportunities
 The international market is full of
opportunities.
 Expansion of the business in the
different geographical areas.
 Expansion of the product range also
enhances the business of the company.
Threats
 The interesting concept can attract
other companies to work in this sector.
 Production of the vegetables and fruits
based on nature.
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6.0 Conclusion & Recommendations
On the basis of the above report, it has been concluded that PurePonics Company has an
innovative concept. The external environment creates a huge impact on the internal operations of
the business. It is essential to make changes in the internal environment according to the external
business environment. Cage strategy is effective to make a comparison between the two nation in
which a company is working.
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References
 Adeoye, A.O. and Elegunde, A.F., 2012. Impacts of external business environment on
organisational performance in the food and beverage industry in Nigeria. British Journal of
Arts and Social Sciences, 6(2), pp.194-201.
 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.
 Ghemawat, P. and Altman, S.A., 2016. Emerging Economies: Differences and Distances
1. AIB Insights, 16(4), p.7.
 Ghemawat, P., 2014. Arbitrage Strategies. Unpublished Globalization Note Series,
University of Navarra, IESE Business School in Barcelona, Spain.
 PUREPONICS, 2016. We care about you eat. [Online]. Available at:
https://www.pureponics.com.au/ [Accessed on 21 Aug. 18].
 Yunna, W. and Yisheng, Y., 2014. The competition situation analysis of shale gas
industry in China: Applying Porter’s five forces and scenario model. Renewable and
Sustainable Energy Reviews, 40, pp.798-805.
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