Strategic Tools for Business Administration: A Comprehensive Report

This report provides an overview of strategic management tools used in business administration. It begins by introducing strategic management and its objectives, emphasizing the importance of environmental analysis. The report then delves into specific tools, including PESTLE analysis, which ex...Read More

Business Administration

STRATEGY TOOLS 1
Introduction
Strategic management is the formulation and implementation of the plan in order to achieve
the objective and goals. The organisation analyse the environment before implementing the
plan. There are many tools are used by the company to determine the external and internal
environmental factors which affects the business. PESTLE, SWOT, Porter’s Five Forces
Strategic, and many others that can helps to analyse the environment and implement the
appropriate strategy that helps to attain the objective of the organisation. In this report, the
discussion is made on the strategic tools which are used by the company in the process of
strategic management.
Strategic tools
PESTLE Analysis
It is a tool which is used by the company to analyse the macro environmental factors such as
political, economic, social, technological, and legal and environment. The external forces
affect the organisation performance as they are important factor in the organisation
environment. These factors affect the strategic planning of the organisation which is
implemented by analysing the environment. This tool analyse the environment of the
particular country that affects the business. This tool describes the six factors and these
factors include the government, geographical, environment and economic situation of the
country. The business is affected from the external factors as its survival is based on the
condition of the country (Frue, 2016). This tool analyse the opportunity for the company by
evaluating the environment in the terms of expansion in the business. It mostly used in the
process of expansion of business in the other country in order to analyse the factors which
becomes the strength and weakness of the business. The evaluation of entrants the market is

STRATEGY TOOLS 2
also done as per the analysis of the market. The different factors of these tools contain the
different content for analysing the environment such as
Political- It includes the decision of government, rules and regulation developed by the
government on the behalf in the context of import and export. That affects the transfer
business of the company from one place to another.
Economic- It determines the economic condition of the country. It includes the economic
growth, exchange rates, inflation rates, disposable income, unemployment rate and many
others. It affects the demand of consumers towards the services as per their market condition.
Social- This dimension of the PESTLE Analysis represents the demographic characteristics
such as customs, tradition and religion. It also includes the factors of taste, age distribution,
population rate, career attributes and the income of consumers. It also affects as the demand
of consumers is changing with the trends and fashion and as per the generation gap.
Technology- This dimension evaluates the innovation factors and the rate of development in
the technology. Developing technology in the country helps the business to grow in the
market by developing the new products.
Legal-
It includes the acts and laws regarding for the protection of consumers and the company. It
includes the specific laws such as health safety, employment laws, consumer protection laws
and the patent laws.
Environmental-

STRATEGY TOOLS 3
It includes the factors related to environment such as weather, climate, tax policies, pressure
form NGO and many others. It affects the products as per the changing the weather and it
directly affects the business (Business to you, 2016).
SWOT Analysis
SWOT Analysis is a strategic tool which is used to help the organisation to identify the
internal factors such as strength, weaknesses, opportunities and threat (Gürel, and Tat, 2017).
This tool helps to evaluate the objective of the company by identifying the internal and
external factors. Internal and external factors reflect the favourable and unfavourable
conditions for the business to achieve the objective. This tool is used by the many companies
before adopting and implementing the plan in the business. Strength and Weaknesses are the
internal factors and the opportunity and threat are the external factors. This tool is considered
as the best tool for the strategic analysis for the business (Bull, et. al, 2016).
Porters Five Forces Framework
Porters Five Forces Framework is used to analyse the competitive forces that affects the
business of the organisation. This tool evaluates the competitive environment in the five
factors such as new entrants, substitute, competitors, bargaining power of consumers and the
bargaining power of suppliers. These are the forces determine by the structure of the industry
and the level of competition in that industry. This tool is implemented on the industry to
analyse the growth and competition in the industry. It also helps to evaluate the activeness of
the industry. This tool is used by the company to gain the competitive advantage and grab the
share in the industry. The analysis of the industry helps to evaluate the competitive position
of the company in the industry. It is very useful tool in adopting the appropriate the strategy
as its reveal the growth of the industry on the five keys.

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(Source: Jurevicius, 2013)
Porter’s Generic strategy
It is a concept that describes the process of adopting the competitive advantage across the
market. This tool helps the company to gain the competitive advantage by adopting the
competitive strategy. It defines the three generic strategies such as cost leadership,
differentiation and the focus strategy. These three approaches are the example of generic
strategy which is useful for the every business in order to earn the high profit. These three
approaches are considered as the competitive advantage of the company (Salavou, 2015). The
Company choose the two competitive strategies for the growth of the business in the market.
The generic strategy of the company reflects the choices made regarding the both types of
competitive advantage and the scope. Cost leadership strategy of the company states the low
cost strategy to attract the customer towards the business. Differentiation strategy defines the
different product and services of the organisation from the competitors so that the large
number of consumers attracts towards the business. The third strategy of the tool focuses
strategy that the company focus on its particular products and services in order to grab the
high market share of the market. After analysing the environment, the company has to adopt
the strategies so that it can gain the competitive advantage and the objectives (Mind Tools,
2018).

STRATEGY TOOLS 5
Conclusion
From the above limelight discussion, it has been concluded that the strategic tools is plays an
essential role in the success of the business. It helps the organisation to achieve the objective
by beat the competitors or by analysing the factors that affects the business. External and
internal analysis of the company helps to achieve the success in the market and that can be
possible with the help of these tools.

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References
Bull, J.W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, 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.
Business to you. (2016) Scanning the Environment: PESTEL Analysis. [online] Available
from: https://www.business-to-you.com/scanning-the-environment-pestel-analysis/ [Accessed
11/4/19].
Frue, K. (2016) The Advantages of PESTLE Analysis. [online] Available from:
https://pestleanalysis.com/advantages-of-pestle-analysis/ [Accessed 11/4/19].
Gürel, E. and Tat, M. (2017) Swot Analysis: A Theoretical Review. Journal of International
Social Research, 10(51).
Jurevicius, O. (2013) Porter's Five Forces. [online] Available from:
https://www.strategicmanagementinsight.com/tools/porters-five-forces.html [Accessed
11/4/19].
Mind Tools. (2018) Porter's Generic Strategies. [online] Available from:
https://www.mindtools.com/pages/article/newSTR_82.htm [Accessed 11/4/19].
Salavou, H.E. (2015) Competitive strategies and their shift to the future. European Business
Review, 27(1), pp.80-99.