MGMT 690: Analyzing Strategic Tools in Global Business

This report examines the application of strategic tools, specifically Porter's Five Forces and PESTLE analysis, within a global business context. The analysis begins with defining global strategy and contrasting it with other international expansion strategies, like multidomestic and transnational strategies. The core of the report focuses on the utility and benefits of these tools in assessing both the internal competitive environment and the external macro-environment of a business. Porter's Five Forces is used to understand the competitive landscape, while PESTLE analysis examines political, economic, social, technological, legal, and environmental factors. The report highlights the benefits of these tools, including their ease of use, cost-effectiveness, and ability to facilitate strategic planning and decision-making, particularly in the context of entering global markets. It also discusses the importance of thorough research and knowledge when utilizing these tools. The report concludes by emphasizing the role of these tools in pre-assessing opportunities and threats in a global market, ultimately aiding in developing effective business plans.

RUNNING HEAD: STRATEGIC TOOLS
STRATEGIC MANAGEMENT IN A DYNAMIC ENVIRONMENT

STRATEGIC TOOLS 1
Strategic tools
In order to understand the internal and external environment of the industry, Porters Five-
Force Analysis and PESTLE analysis will be best suitable.
Porter’s Five Force Analysis
Porters Five Force Analysis is a strategic model that assists in understanding the
company’s internal competitive environment. It helps in identifying the level of competition
prevalent within the industry. Thus, it determines the potential strengths and weakness of the
company. It consists of five forces including supplier’s power, customer’s power, the threat of
new entrants, the threat of identical products and competition prevailing in the industry. The
number of suppliers and switching cost usually determines the supplier’s power in an industry.
Customer’s power is determined by the ability they attain to drive the price. The threat of new
entry arises when there are low barriers to entry in the market. Additionally, the Threat of
identical product arises when there is easy availability of similar products in the market. Lastly,
competition in the industry is determined by the number of rivals exists in the industry
(Margretta & Porter, 2012).
PESTLE Analysis
PESTLE Analysis is also a strategic tool used to analyze the macro environment of a
company. PESTLE is an abbreviation that stands for Political, Economic factors determine the
financial performance of the country. It mainly includes factors such as GDP rate, Inflation rate
and unemployment level. Social factors determine the customs, norms, attitude, social behavior
and distribution of income and demographics trends prevailing in the particular country. It is
usually beneficial in ‘targeting’. Technological factors determine the level of technology

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up-gradation and innovation development prevailing in the country. Legal factors are similar to
political factors as it pours light on the government rules, regulation, laws and policies of a
country. Lastly, Environmental factors mainly determine the climatic change of the country
(Berry, 2017).
Benefits of Tools
It is examined that Porters Five Force Analysis and PESTLE analysis is one of the best
ways to analyze the market. Porter’s Five Force Model helps in understanding the level of
competition prevailing in the industry. It provides crucial information about the competitors,
buyers and suppliers. Thus, it helps in making effective plans for the future, to overcome the
potential threats and to fully utilize the opportunities. This, in turn, helps in dealing with the
buyer and suppliers more accurately (Gürel, 2017).
PEST Analysis is a significant tool beneficial for initiating a new business. It helps the
company in assessing the implications of entering in a national and global market. It is useful in
providing a deeper understanding of strategic intelligent within the organization. It helps in
raising alertness with respect to threats of the external environment. It allows exploiting the
opportunities that help in strengthening the business. Additionally, it is analyzed that both tools
are easy to use and economical in nature. Thus, their benefits can be availed by the organization
regardless of size (Perera, 2017).
Utilization of Tools in the global market
In order to use the Porter’s Five-Force Model and PESTLE Analysis, the marketer should
have a powerful knowledge. Additionally, it should be determined that the use of these tools
should be done before initiating the business in a global world. One should conduct thorough

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research and must attain a deep knowledge to develop an effective conclusion by utilizing these
tools. Additionally, one must know the source of information as it will ease down the process
and results in time-saving (Gretzky, 2010).
Analysis of these tools is not mandatory for the company, but their usage will assist in
determining whether the global country is offering a positive internal and external environment.
It will also help in pre assessing the opportunities and threats prevailing in the country. Hence, it
will provide the outline of the country and help in developing a plan (Steiner, 2010).

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BIBLIOGRAPHY
Berry, E. (2017). Pestle Analysis Essntials. CreateSpace Independent Publishing Platform.
Gretzky, W. (2010). Strategic planning and SWOT analysis. JP Harrison, Essentials of Strategic
Planning in Health Care, 2010.
Gürel, E. &. (2017). SWOT analysis: A theoretical review. Journal of International Social
Research, 10(51).
Margretta, J., & Porter, M. E. (2012). Understanding Michael Porter: The Essential Guide to
Competition and Strategy. Harvard Business Press.
Perera, R. (2017). The PESTLE analysisThe PESTLE analysis. Nerdynaut.
Steiner. (2010). Strategic planning. Simon and Schuster.