Business Strategy: Analysis of PESTLE, SWOT, and Porter's Five Forces

This report provides an in-depth analysis of three key strategic tools: PESTLE analysis, SWOT analysis, and Porter's Five Forces. The PESTLE analysis examines the political, economic, social, technological, legal, and environmental factors influencing businesses. The SWOT analysis evaluates a company's internal strengths and weaknesses, along with external opportunities and threats. Porter's Five Forces assesses the competitive intensity and attractiveness of an industry by analyzing the bargaining power of suppliers and buyers, the threat of new entrants and substitutes, and the intensity of competitive rivalry. The report includes current practical examples from businesses and industries, demonstrating how these tools are used in strategic decision-making, along with in-text references to academic journals and online business magazines, and a comprehensive bibliography.

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Competitive strategy

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Introduction
In the recent time, competition has increased in every industry. due to this, every business
organisation is required to take the help of strategic tools. Several strategic tools have
evolved over the time that further assist in knowing the environment. among all the tools,
SWOT analysis is such tool that is popular. This tool helps the business to know its internal
(strengths and weakness) as well as external (opportunities and threats) environment. besides
SWOT analysis, PESTLE analysis also proved to be powerful tool in order to access the
external environment. in addition to this, porter’s five forces has also been discussed.
First strategic model:
PESTLE analysis is the strategic tool that assists in analysing as well as monitoring the
external environmental factors. When any firm trying to start its business, this tool helps them
in several ways. It is because there are several factors that are required to be considered
before starting business in any of the country. PESTLE stands for the political, economic,
social, technological, legal and environmental factors. Political factor states how much
government of the concerned country interfere in the particular business. It is required to be
considered because every business is affected by the stability of instability of any business
organisation. Political factors include several elements such as policies made by the
government, taxation policy, environmental as well as corruption law. All these factors play
an essential role. As compare to this, economic factors are known as the determinant in every
economy. Factors that are included in the economic factors are exchange rates, interest rates,
and unemployment and inflation rates. These factors tend to put the long term as well as short
term, impact on every business. Social factors include the customs as well as rules within
which any business is required to operate. For example- in the recent time, customers demand
is changing over time. This requires the businesses to change its taste and preference as per
the demand of customer. In the recent, several technological changes are also brought in the
organisation due to the increasing technological preference. By ensuring the technological
changes, organisation brings the creativity and innovation in the business. It includes
technological changes, technological initiatives, level of innovation and amount of technical
awareness. These factors influence the decision of any business to enter into any of the new
market segment or not. IN the recent time, pollution as well as several environmental
problems has increased. Due to this, it becomes essential for the firm to become socially

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responsible. Government has also taken several measures in order to set the target related to
the carbon footprint. This has also led the businesses to ensure its involvement with the
corporate social responsibility as well as sustainability. For example- Australian retail firms
have also attached them with the proper policies and laws that are made by the government.
Legal factors on the other hand include the antitrust laws, patent and copyright laws, safety
laws, health laws and consumer protection laws. By taking such analysis, companies are
required to know what is or what is not legal for undertaking the business successfully. For
example: Woolworths have to properly ensure the laws and policies that are made by the
government (David, David and David, 2017).
Second strategic model: SWOT analysis
SWOT analysis is a tool that helps every business organisation to know its internal as well as
external factors. It is true that several factors present internally as well as externally that gives
positive as well as negative impact to the organisation. In the internal factors, strength and
weakness are included. As compare to this, external factor includes the threats and
opportunities. Both these factors help the organization in some or other way. if business will
know about its internal capabilities, it can achieve the competitive advantage over the other
competitors. Similarly, when knowing about its threats, it can work on them. Every business
organisation tends to work communicate effectively with the other parties so that it can
achieve the growth. Weaknesses are said to be those characteristics that hampers the
productivity of the organisation negatively. Due to this, it is beneficial to know the weakness
prior to the situation that put the business condition worse. For example- several businesses
tends to face the problem in communicating well with the organisation. this sometimes
hamper the marketing of its business. Therefore, conducting of the swot analysis, it can
improve the situation. At the same time, threats are also seen in terms of political instability,
sudden changes in the consumer demand or any technical outbreak. These situations tend to
affect the business. In order to avoid all these problems, SWOT analysis will prove as the
best strategic tool (Gurel and Tta, 2015).
Porter’s five forces: third strategic tool
In the recent time, it is true that the competition has increased to a great extent. Due to this, it
is essential for the organisation. It includes several elements. The first one is the power of
suppliers. It tends to assess how much it is easy for the suppliers to bargain for the prices. The

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number of suppliers available in the industry decides this as well as the switching cost of the
suppliers to other industry. for example- In Australian retailing industry, bargaining power of
supplier is high. It is because several industries are available where supplier can switch. On
the other hand, bargaining power of buyers states how much it is easy for the buyers to drive
the prices down. The number of buyers that are available in the market knows it. In
Australian retailing industry too, bargaining power of buyer is seen to be high (Roper and
Hodari, 2015). It is because customers have several options available from where they can
buy the products. Competitive rivalry states the capability as well as number of the
competitors that are available in the market. It affects the firm productivity if it does not
differentiate any of its product feature or service from its competitors. Due to this,
sometimes-Australian retailing firms face the problem. Every retailing company in Australia
is undertaking innovative measures in order to attract the customers to avail their services.
Threat of substitute is the other element in the porter’s five forces. Using the porter’s five-
force analysis, firm can know the close substitute that is available in the market (Aithal,
Shailashre and Kumar, 2015). At the end, threat of new entry comes. Some of the profitable
market tends to attract the new entrant. For example- In the Australian retailing market, there
are huge competitors that restrict the entry of new entrant. Other firm also not enter in the
market due to the fear of failure. In addition to this, threat of substitute is explained by the
switching cost. It states that how much it is easy for the customers to prefer any other
product. for example- Under Armour is the perfect example that face the high competition
from the Nike as well as some other players. In this way, it can stated that the porter’s five
forces tends to help the businesses to know various threats that can be face in the
environment (Rastogi and Trivedi, 2016).
Conclusion
From the analysis of above discussion, it can be said that the swot analysis helps the business
to know the different opportunities that can be use from the strengths. It also helps the
business in minimising the threats by working on its weaknesses. It can also work on the
several new markets if it knows the different opportunities that are available in the market.
SWOT analysis prove to be more helpful when business effectively ensure the research in the
market. Besides this, PESTLE analysis also proves to be the helpful for the business due to
the increasing changes in the customers demand and political interference. At the same time,
porter’s five forces is also one such essential strategic tool in the organisation that helps in

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knowing the different bargaining power of buyers, and suppliers. Besides this, organisation is
also able to know the competitive rivalry that a organisation has to face from the existing
competitors.

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