Analysis of Strategic Management Tools for Competitive Advantage

This essay provides an overview of strategic management tools, emphasizing their importance in achieving competitive advantage. It delves into the PESTLE analysis, examining political, economic, socio-cultural, and technological factors, using Starbucks as a case study. The Ansoff Matrix is then explored, outlining market penetration, market development, product development, and diversification strategies, with Walmart as an example. The SWOT analysis is also discussed, highlighting internal strengths and weaknesses, as well as external opportunities and threats, with Apple as an illustrative case. The essay concludes by summarizing the significance of these tools in guiding strategic decisions and ensuring long-term business success. The analysis of these tools is crucial for understanding the internal and external environment of a business and developing effective strategies.

Management
Competitive advantage
Student’s name
8/21/2019

Competitive advantage 1
Introduction
Strategic development tools highlights about the various tools, which are based on the industry
good practices that meets the varying needs in the strategy development process. Along with this,
these tools also help the business houses to create or generate value for their customers and also
to capture value with the sustainable advantage over the other players in the game. Moreover, it
also helps in aligning the various activities with the organization towards the common goals,
which mainly supports a winning business strategy. Hence, various strategic tools which the
companies follows are- Pestle analysis, porters five force model, SWOT analysis , ansoff matrix
which helps in knowing about the internal as well as external environment (Eden, & Ackermann,
2013).
Pestle analysis-
Pest analysis mainly denotes, about the political, economic, socio-cultural and technological
aspect. As each of these factors helps in defining about the business internal as well as external
environment and along with this, which all other factors affect the organizational health.
Starbucks one of the well-known coffee shops, with its largest coffee brand globally it is the
most successful brand. It is famous because of its excellent quality and great leadership in the
market. Hence, it is seen that they have more focus over quality as well as ethics. They are also
well known for the it’s excellent customers services and the pleasant environment which makes
them feel differentiate it from its competitors (Taecharungroj, 2017).
Political factor has a major impact on every business and its profitability. It mainly helps in
determining the environment of the nation, which mainly links it with the economic and political
stability. The constancy of the political situation majorly affects the steadiness of the supply
chain. Moreover, administrative disruption also affects the day-to-day procedures along with the
deals and effectiveness of the businesses. As in this, the contractors of the Starbucks are
scattered in numerous parts and they also deals with the political pressures. Hence, it is seen that
political conditions of the various nations are majorly affected due to the political circumstances
(Simon, 2011).

Competitive advantage 2
Economic factor also majorly highlights about the buying ability of the clienteles. And how this
factor affects the brand transactions, effectiveness is affected. Along with this, It is also seen that
the affects the cost of raw substantial and labor cost as well. All these aspects are totally linked
with the success of the Starbucks in the long run. Hence, the better economic conditions, leads to
the higher profitability of the company (Luthans, & Doh, 2012).
Socio-culture factor highlights that Starbucks ecological impact, undertaking the climate
changes and stimulating others as well to do the same. By using the ecological, socially and
economically responsible guidelines of upkeep global, Starbucks is able to procurement the
coffee under “ Starbucks shared planet”. Along with this, changing customers preferences also
affects the sale of coffee and the business of Starbucks.
Technological factor also mainly factors the organizational profitability of the business.
Technology also enables the performance across all the functions, which made the good use of
info technology all across the company to drive performance. Moreover, Starbucks also
introduced in terms of technology its card, which attracts lot of customers and made them quick
visitors. They also use more of the biodegradable material for recycling. Other than this, they
also doing online delivery of their coffee and much more (Chua, & Banerjee, 2013).
Ansoff matrix
Ansoff matrix mainly states about the strategic development tool that provides the framework to
helps the senior members of the company to devise its strategies for the future growth. It mainly
comprises of 4 basic factors such as market penetration strategy, market development, product
development and lastly, Diversification.
Market penetration of Wal-Mart mainly highlights about the selling of more goods and
services to the company’s current markets on discounts and related offers. In addition to it, Wal-
Mart also enhances its online presence to recover its client’s access to its products selling.
Hence, such kind of access donates to growth of the business’s transactions revenue. As, it is
seen that Wal-Mart mainly applies the low price market penetration strategy in order to achieve
more through the cost leadership strategy.

Competitive advantage 3
Market development aspect states that Wal-Mart opens its new stores in the countries where no
as such operation works out. The main motive of Wal-Mart is to improve their reputation in
every market. In addition, earns more by working over online presence for the retail
transactions. As this competitive strategy maintenances the market growth, intensive growth
strategy through low values that appeal customers to Wal-Mart stores in the new market.
Product growth strategy mainly highlights about emerging and contributing the new
merchandises to the market where the business presently works. Hence, in this case Wal-Mart
applies negligible speculation on new product expansion. As they majorly focus over the savings
on sales and promotion which are the essential of the trade commercial. Hence, this growth plan
leads to the planned objective of capitalizing more in introduction of new products and services
in existing products (Stankevičiūtė, Grunda, & Bartkus, 2012).
Diversification- This strategy involved provide entirely new merchandises in the new
marketplace where mostly the companies do not operate. In walmart context, they are searching
for and acquiring companies that can helps in integrating into delivery and media Technology
Company. Hence, in applying this intensive growing approach mainly attainments must involve
higher effectiveness and maintenance of low cost processes. Divergence remains as negligible
intensive progress approach in term of Wal-Mart. Thus, in Wal-Mart case they have low degree
of divergence as they mainly focuses on its trade processes (Jarzabkowski, & Kaplan, 2015).
SWOT Analysis
SWOT Analysis is also one of the strategic development tools, which helps the companies to
know about the internal as well as external environment, which helps them in making further
decisions and strategy in order to generate the success of the organization in long run. It mainly
highlights about the internal strength and weakness of the company and along with this they also
highlights about the external opportunities and threats and accordingly further planning is done
by the company (Rigby, & Bilodeau, 2011).

Competitive advantage 4
Strength mainly highlights about the companies key strength, in term of apple, being innovate is
the major strength in which every year company hit the new product such as launch of a new
phone in every 12 months likewise, MacBook, I pad, I watch and IPods. Hence, it is seen that
apple covers almost everything, which an individual desires. Moreover, leadership position as
compared to the other brands. Design and technology the major strength of Apple Company
along with this, brand equity also plays major role, which generates the number1 value amongst
all the companies in the world.
Weaknesses of apple company highlights that apple only taps the high class people and
matching only the top customers expectation are fulfilled. People expect great things from apple
year after year and to maintain these expectations level is not at all easy for the company. Other
than this, Apple Company has dependency on few products and their closest competitors in these
terms are Microsoft and Google. Lastly, Incompatibility is key issue of apple, which makes a
huge impact on customers’ decision-making, regards the product purchase (Noe, et al, 2017).
Opportunities factors highlights that apple is growing company as this also helps in raising
GDP developing countries, this is all because of increasing consumption and growing needs of a
larger market. Moreover, apples also have the qualified professionals, which have many years of
experience in branding customers products and through this apple is continuously building new
opportunities. Lastly, apple is about to launch the product that created using green technology.
Hence, in future they will be applying sustainable technology.
Threat factor highlights that company facing the strong threat from the competition or many
other reasons, such as market penetration and lawsuits. In terms of competition, apple faces the
threat from competitor such as Samsung, Google and dell. As due to the intense competition,
company needs to explore the new technologies. Lastly, market penetration in smartphone also
generates major threat. Companies like Samsung, HTC and much more are using android
software to create more phones. Hence, for this, apple needs to upgrade its software so that they
can tap and attract more and more customers to generate more success (Heracleous, 2013).

Competitive advantage 5
Conclusion
From the above essay we can conclude that strategic management tools are the most important
aspect of the company as it not only highlights about the internals and externals environmental
factors but it also helps in selecting various strategies for future which the company can use to
generate more success for longer period of time. Hence, it is seen that whatever be the company
be, they need to analysis the market by making use of pestle, porter five force, ansoff matrix or
SWOT analysis all these development tools helps the companies to generate more success.

Competitive advantage 6
References
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