Competitive Strategy: Analysis of Key Strategy Development Tools Essay

This essay provides a comprehensive analysis of three key strategy development tools: PESTEL analysis, Five Forces model, and SWOT analysis. The PESTEL analysis examines the macro-environmental factors influencing businesses, exemplified by Atlassian Corporation. The Five Forces model, using Walmart de Mexico y Centroamerica as a case study, assesses industry competitiveness. Lastly, the SWOT analysis, applied to Woolworths Supermarket, identifies internal strengths and weaknesses, along with external opportunities and threats. The essay emphasizes the importance of these tools in strategic management, providing insights into competitive advantage, market positioning, and overall business objectives. The essay provides real-world examples for each tool to illustrate their practical application.

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Strategic management is the process of continuous preparations, examining,
investigating as well as assessing of all the requirements, which is considered
necessary for the business to meet its objectives. The strategic development tools helps
in the company in analyzing the strengths as well as the opportunities, which are
underlying (Bolland, 2017). It also helps the company in finding the factors that are
influencing to the business. In this essay, the PESTEL, Five forces model as well as
SWOT analysis is explained with examples.
PESTEL Analysis
It defines the structure of the factors in the macro-environment, which are used in
scanning the external environment. It is considered the significant part of strategic
management. The PESTEL analysis is the division of an external analysis; it is used
when company is conducting the research of market, as well as provides a complete
overview of the various factors of macro-environment like social, political, economic etc,
which should be taken into concern (Ginter et al., 2018). It is important tool because it
helps understanding the growth as well as turn down in the market, position of the
business and helps in providing the directions to operating the business. The PESTEL
analysis is further described with the example of Atlassian Corporation. Atlassian
Corporation Plc is an Australian enterprise software company that develops products for
software developers, project managers, and content management (Kanaki et al., 2018).
Further, the analysis of macro environment is done.
The Political Factor shows that due to Brexit and the election carried in US, made
change in the President of the country that is Donald Trump in 2016. The changes
strengthen the dollar of United States as well as weak the international currencies. This
change is considered good and optimistic for the company; it is due to the reason that
the company is only consent to obtain the payment in the US dollar. Economic Factors
leads that in 2015, the interest rate of Australia rises which is up to 6.35%, which results
in more investment and affects Atlassian positively (Mariana et al., 2017). Due to
increase in the revenue that is in the year 2015, it was $320million, which rises as
compared to the year 2014, which was $215million (Arnold et al., 2016). The social
factors also affects Atlassian, it is because of increasing inequality in the country that is

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the lower group of people was up to 13.3% in 2016 (Kanaki et al., 2018). However due
to this the company is affects to produce as well as to promote goods according to the
needs and requirements of the customers. The changes in the division of the
technologies, which is, cloud computing in 2017, influence Atlassian to use these
technologies to gain the competitive advantage; this helps the company in earning more
profits that is in 2017 the company revenue was $620million (Zeleti et al., 2019). The
software companies adopt the various laws provided by the government to prevent the
environment that is to operate the business in 100 percent renewal energy. The policies
were also made to develop ‘Green environment’ through the human resource and
power. The legal factors influence the company negatively because of the law passed
by the government, which is cyber security in 2018, through this Atlassian find trouble in
producing the product as well as law was also passed of no exemption in tax, which
raises the expenditure of Atlassian (Smetanková & Mandičák, 2019).
Five forces Model
It is the techniques for examining the competition of the company. It helps in
determining the competitive power in the industry as well as the position of the industry
by analyzing the bargaining power of the supplier as well as buyer. However, through
this model the profitability of the industry is also determined. The Five forces model is
explained with the example of Walmart de Mexico y Centroamerica, It is also called
Walmex (Smetanková & Mandičák, 2019). The company headquarter is in Mexico,
number of employees works in the company was 2,19,767 in the year 2015. Walmart de
Mexico is in the retail industry. In 2018, the revenue earned by the company was 616.91
billion Mexican pesos (Lasa et al., 2019). The five force of the model of company is also
discussed.
The threats of new entry in the retail industry is moderate, the companies can enter into
the industry easily because in Mexico not much investment is to be required. However,
it is difficult to compete with the companies, which already exist and is well established
that is Amazon, Calimax. In 2019, the government of Mexico liberalizes the rules and
policies in the supermarkets for making imports. This has extensively enhanced the

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situation for exporters in Mexican marketplace (Garrapa, 2019). The bargaining power
of all the purchaser in the retail industry is very high it is because the buyers has various
choices, many of the companies like Amazon sales was 502.2 million USD in the year
2017 because many buyer prefer to buy product through online (Culpepper & Thelen,
2019). Coppel also provides the opportunities to buy product online and other
companies like Fresko adopt several strategies like 50% weekly discount, coupons to
attract the customers (Garrapa, 2019). The bargaining power of the suppliers are
considered moderate it is because of many well-established supermarkets in Mexico
and dealers were not want to lose the agreements with these well-known companies
like MEGA, Amazon. But sometimes many of the dealers does not want to stuck in the
prices decided by the companies and change the prices according to their needs and
requirements (Wagner et al., 2019). The risk of the substitutes is also high because of
the same product offered by the similar companies like MEGA provide similar product
like that of Walmart de Mexico with discounts and other offer, loyalty programs to attract
the costumers. The competition with the existing firm in the supermarkets is high due to
various companies offer weekly discounts like Amazon offer 50% as it is considered the
main competitor of Walmart de Mexico because it provide the customer to shop online.
The other one is Calimax, which is the local brand of Mexico in the retail industry and is
located in the area of Northwest. The company is in the 3rd rank in gaining customer
value by providing high quality products (Campos et al., 2019).
SWOT Analysis
It is a tool of making the strategic preparation, which is used to support an individual as
well as business to gain the competitive advantage by identifying the strengths of the
company, weaknesses through which the company does not take the opportunities. The
opportunities, which company can take to gain the competitive advantage as well as the
threat associated to the competition arises or because of the planning of project.
However, it is considered significant for the company to state the goals of the company
as well as project in which the company is underlying also recognize the internal as well
as external factors, which are positive as well as Negative for the company in achieving
the overall objective of the company (Ginter et al., 2018). The strengths as well as

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weaknesses of the company are internal whereas the focus of opportunities as well as
threats is on the exterior environment. Further, the SWOT analysis is discussed with the
example of Woolworths Supermarket. It is the Supermarket chain in Australia, in 2019
the company has 995 number of locations and the revenue earned by the company in
2019 is 5,672.6 crores AUD. In 2019, the employee’s works in the company is 115,000
(Makhitha & Khumalo, 2019). The SWOT analysis of Woolworths Supermarket is
discussed.
The strengths of Woolworths Supermarket includes that company has the network of
strong distributors Woolworths supermarkets has the strong as well as better
distribution channel by carrying out several meeting with diverse suppliers and by
developing agreement with various distributors. The company has competent as well as
potential employees because Woolworths Supermarket provides various training
courses to the employees like course of hospitality management to the lower level
employees (Wang et al., 2019). The location of the company is also considered as
strength because it has more than hundred stores in the main location of Australia. The
weaknesses of the company are that the company find difficulties in knowing the
demands of the customers. The company also has lower presence in the international
market as many of the stores that is 100 stores of Woolworths in located in the home
country only. For taking the competitive advantage company can adopt various
opportunities like, it can provide the franchise of other corporations, this will help the
company to increase their market share. The company can use marketing mix tool to
promote the product; this will help the company to attract large number of target
customers because the company holds 80% of share in the market, through promotion
the customer’s gets more attracted towards the product and can make better
relationship with the customers (Zorbas et al., 2019). The threats arises that in
Australia, the government puts the pressure to lower the items of alcohol, The company
is targeting all the segments it is also considered threat that, the focus of the company
is not on the single customer base as well as not in the single product. Woolworths has
the potential dealers, some are Teys Australia is the main dealer, which supply meat as
well as various other inventories (Wang et al., 2019).

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From the above it is conclude that the strategic development tool is considered
significant for the companies to know the opportunities, weaknesses and helps the
company to take the competitive advantage. The PESTEL analysis is helpful in
scanning the macro environment as well as to know the factors that are affecting the
business. From the above it also conclude that five forces model is important to know
the competition prevailing in the industry and SWOT analysis is significant to know the
internal strength and weaknesses as well as external opportunities and threats.
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