HI6006: Analysis of Strategic Planning Tools Essay

This essay provides a comprehensive overview of strategic planning, focusing on the application of key strategic management tools. It begins with an introduction to strategic planning as an organizational management activity, emphasizing its role in setting priorities and achieving common goals. The essay then delves into specific tools, starting with the Ansoff Matrix, explaining its use in determining growth strategies, and illustrating its application with examples from Starbucks. Next, it explores SWOT analysis, examining the strengths, weaknesses, opportunities, and threats of Apple Inc. The analysis includes examples of how these factors impact the company's competitiveness. Finally, the essay presents Porter's Five Forces analysis, a model for assessing industry competition and profitability. It analyzes Walmart's position within the context of this model, considering the threat of substitutes, buyer power, supplier power, industry rivalry, and the threat of new entrants. The essay concludes by emphasizing the importance of strategic planning in achieving sustainable competitive advantage and satisfying customers.

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Strategic Planning
Student’s Name
8/22/2019

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Introduction
Strategic planning is considered as an organizational management activity that helps the
company in setting priorities, strengthening of the operations and engages stakeholders to
achieve common goals. It includes the strategic goals and actions for the accomplishment of
the goals (Steiner, 2010). Through implementation of effective strategic plan the company
can increase its market share and attain higher profitability in business. It will allow the
organization to be more responsive to the changing business environment and sustain its
business for longer period of time (Bryson, 2015).
The additional paragraphs of the report will reflect upon application of strategic management
tools which includes Ansoff Matrix, SWOT analysis and Porters five force analysis.
Ansoff Matrix
It is considered as a marketing planning tool that helps the top management to determine the
future growth strategy for the company. It will cover the strategies that the company can
adopt for advancing its profits through analysis of risk associated with the strategy. It helps
the organizations in assessing the opportunity cost associated with each alternative strategy
and selects the strategy that helps in maximizing market share and profitability of business
(Gurcaylilar-Yenidogan. and Aksoy, 2018). The four strategies under the matrix are
mentioned below:
Market Penetration
In this strategy, the organization focuses on selling the existing products in the existing
markets. It is analyzed that Starbucks applies the market penetration strategy by adding

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names to the coffee cups and products to entice the customers and increase the sales of the
company. Starbucks mainly focuses on adopting market penetration strategy under which it
provides cappuccinos, coffees, and espressos. It provides personal touch services (Chen,
2019).
(Source: Chen, 2019)
Product Development
In this strategy, the organization focuses on developing new products for existing customers.
It will help the company in attaining customer loyalty and increase the sales of the company.
It is analyzed that Starbucks focuses on adding new flavors to its coffee and develops
premium coffee with exclusive beans (Chen, 2019).
Market development
In this strategy, the organization focuses on selling the existing products to the new markets.
Starbucks focuses on establishing its coffee shops in different locations of the world. The
company has analyzed that expanding the business in Middle East and Asia region will help

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the company in attaining huge profits and develop the market for the company (Bolland and
Wellman, 2016).
Diversification
This is the last growth strategy that the companies use for expansion of market share. In this
strategy, the companies develop new products for the new market. This strategy is considered
as the riskiest one because it involves huge amount of resources and has potential of
increasing the sales by larger amount. It is analyzed Starbucks focuses on applying
diversification strategy by adding food menu at its coffee shops and aims to increase the sales
by 30%. It is using food to tap into the new markets and has turned into significant source of
revenue (Murdock, 2017).
Adoption of this strategic tool will help the company to be presentable to its stakeholders and
adopt the best growth strategy after analysis of the opportunity cost involved in it (Murdock,
2017).
SWOT Analysis
This strategy tool is considered as the most powerful tool to develop the strategy for the
existing and the new business. It helps in analyzing the strengths and the weakness the
company possess and also provides the chance to analyze the opportunity and threats that lie
in the external environment. It will help the companies in analyzing the changing trends and
the strategies adopted by the competitors (Phadermrod, Crowder and Wills, 2019). The
further paragraph will reflect upon the SWOT analysis of Apple Inc.
Strengths:
It describes the abilities of the company that allows it to differentiate from others. It helps the
company is strong brand recognition and develop the base of loyal customers. It is analyzed

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that Apple enjoys strong brand equity and has become a leading technology company. The
company delivers innovative products that are best in design and technology. The company
has wide distribution channel that helps in increasing profits of business (Sammut‐Bonnici
and Galea, 2015).
Weakness:
It reflects the areas that restrict the competitiveness of the company and the areas that require
improvement. It is analyzed that Apple depends upon few products and the products are
incompatible with third-party software and accessories. The company is not able to meet high
expectations of customers which in turn decrease the market share (Khan, Alam, and Alam,
2015).
Opportunities:
It describes the favourable actions that lie in the external environment to develop competitive
advantage for the company. The rising GDP in developing countries provide the opportunity
to expand the market because the consumers are ready to pay prices for products. The
advancements in the technology have provided the opportunity to advance its products. The
company is focusing on launching Apple Cars by the year 2020. The company has increased
its digital presence and has captured 50% of the US market through Apple smartwatch and
TV’s (Khan, Alam, and Alam, 2015).
Threats:
These are the factors that may harm the performance of the company. It includes a tight
labour market, increasing competition and high price of raw material. The company faces
major threat of market penetration because Android has eaten 47.5 % of the market share and
every brand want to enter the market of smartphone. This, in turn, increases the competition

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for Apple Inc. The company also faces the competition in laptops because Dell and Sony
introduce beautiful models including Alienware model. This, in turn, creates stiff competition
and provides the option to switch over other brands (Gurel and Tat, 2017).
The application of this tool will allow the company to analyze the threats and opportunity and
take advantage of it.
Porter Five Force Analysis
It is considered as a business analysis model that helps in analyzing five competitive forces
that shape a particular industry. This model is used to analyze the profitability and
attractiveness of industry and was developed by Michael E Porter in the year 1980. This
model is used to gauge competition in the industry and helps in efficient planning so that the
company can make the investment according to analysis of trends in the market. This model
allows the companies to effectively deal with suppliers and buyers and gives the dual
advantage when the bargaining power of buyer and supplier is low (Aithal, 2016).
The threat of substitute goods
It refers to the threat that limits the profitability of the company because of availability of
large number of substitutes. It is analyzed that the threat of substitute is low in case of
Walmart because it provides products at matchless prices and the companies that match the
prices of Walmart are very few. This, in turn, decreases the threat of substitute products
(Luttgens and Diener, 2016)
Bargaining power of buyers
It reflects the power of buyers to drive the price down. It is analyzed that the power of buyers
is not very high in case of Walmart. The customers do not get the ease of services and the

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products at much lower prices. This, in turn, lowers the power of buyers to switch over other
brands (Greenspan, 2015).
Bargaining power of suppliers
It reflects the power of supplier to drive up the price. It is analyzed that the power of
suppliers lies from low to moderate in case of Walmart because the company is considered as
the largest retailer and purchases in bulk. The switching cost for the company is low which in
turn lowers the power of suppliers (Greenspan, 2015).
Industry rivalry
It describes the intensity of competition that exists in the current market. It is analyzed that
the degree of competition is medium in case of Walmart because the company faces the
completion from Target and Costco. The company faces completion from Kmart and Best
Buy. However it is largest retailer so the intensity of competition is medium (Luttgens and
Diener, 2016)
The threat of new entrants
It describes the threat from the propensity of new entrants. It is low in case of Walmart
because the company enjoys strong brand equity and has huge distribution and supply chain
network. It becomes difficult for the new entrants to make a huge investment and develops
strong brand image (Aithal, 2016).
Conclusion
From the above discussion, it is critical to note that strategic planning is essential to
determine measurable goals for the company and allows the companies to sustain its

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competitive advantage by understanding the intensity of competition and the potential threats
and opportunities that lies in the external environment. It will help the company in analyzing
the opportunity cost involves each strategy and select the best strategy that will help in
increasing profits of business. Application of the above-mentioned tools will help in
delivering satisfaction to customers.

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References
Aithal, P.S., (2016) Study on ABCD analysis technique for business models, business
strategies, operating concepts & business systems. International Journal in Management and
Social Science, 4(1).
Bolland, E. and Wellman, J. (2016) Strategy. In Solutions (pp. 95-112). Routledge.
Bryson, J.M. (2015) Strategic planning for public and nonprofit organizations.
In International Encyclopedia of the Social & Behavioural Sciences: Second Edition (pp.
515-521).
Chen, S. (2019) The Product Life Cycle and Product Design. In The Design Imperative (pp.
123-142). Palgrave Macmillan, Cham.
Greenspan, R. (2015) Walmart: Five forces analysis (Porter’s model). Panamore Institute.
Gurcaylilar-Yenidogan, T. and Aksoy, S. (2018) Applying Ansoff’s Growth Strategy Matrix
to Innovation Classification. International Journal of Innovation Management, 22(04), p.1
Gurel, E. and Tat, M. (2017) SWOT analysis: A theoretical review. Journal of International
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Khan, U.A., Alam, M.N. and Alam, S. (2015) A critical analysis of internal and external
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Luttgens, D. and Diener, K., (2016) Business model patterns used as a tool for creating (new)
innovative business models. Journal of Business Models, 4(3).

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Murdock, A. (2017) Diversification and Growth. In Private Action for Public Purpose (pp.
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Phadermrod, B., Crowder, R.M. and Wills, G.B. (2019) Importance-performance analysis
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