Strategic Development Tools: An Analysis of Key Business Strategies

This essay delves into essential strategy development tools crucial for business success. It examines PESTLE analysis, which evaluates macro-environmental factors; Porter's Five Forces model, assessing competitive forces; SWOT analysis, identifying strengths, weaknesses, opportunities, and threats; and the resource-based view, focusing on internal resources. The essay uses real-world examples from Nestle, Marks and Spencer, eBay, and Tata Motors to illustrate the application and impact of these tools. The analysis covers political, economic, social, technological, environmental, and legal factors, as well as competitive rivalry, supplier and buyer power, threats of substitution and new entrants. The essay concludes by emphasizing the importance of these tools in achieving long-term sustainability and competitive advantage. It's a helpful resource for students and professionals looking to understand and apply strategic planning principles. This essay is contributed by a student to Desklib, a platform which provides all the necessary AI based study tools for students.

Strategy development tools

Tools
Table of Contents
Introduction......................................................................................................................................1
PESTLE ANALYSIS......................................................................................................................1
Nestle Example............................................................................................................................1
Five force models............................................................................................................................2
Marks and Spencer example........................................................................................................3
SWOT ANALYSIS.........................................................................................................................3
EBAY example............................................................................................................................4
Resource based view........................................................................................................................4
Tata Motors Example...................................................................................................................5
Conclusion.......................................................................................................................................5
References........................................................................................................................................6
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Tools
Introduction
In this paper the discussion will be made on the strategy development tools which are important
for the company to achieve success. The strategy developmental tools that should be considered
by the company are related with Porter five forces model, resource based view, Pestle and
SWOT Analysis.
PESTLE ANALYSIS
It is one of the famous tools which are considered by the marketers to evaluate and to focus on
the macro environmental factors. This approach is considered as a strategic planning tool. It is
considered to focus on the factors related to political, economic, social and technological factors
that can impact the overall project of the company and also the process of planning (Yüksel,
2012).
Nestle Example
Political factor
It has been seen that company focus on various political dynamics like import and export excise
duties, taxation and also government permission so that it can be easy to introduce the new
products in the market. Like company consider various laws and regulations like ISO 9002 and
HACCP to maintain the food safety system.
Economic factor
In context to the overall activities of the company it can be seen that the rise in the market
economies can focus on the leverage of huge resource capital and also research and development
capability to redesign the products in the competitive market. Also the main focus of the
company is to manage the overall impact of the foreign currency fluctuations on import and
export.
Social factors
Nestle focuses on maintaining the quality of the products as people in the society are more health
conscious. So, company emphasizes on introducing the products which are healthy and
preferred by the customers.
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Technological factor
Nestle focused on research and development so that it can be easy to enhance the overall
capability and also to enhance the efficiency in the competitive market. The company also
focused on revising quality products by using latest technology as it can help in boosting the
overall innovation in the competitive market.
Environmental factor
The company is engaged in many programs related to eco-friendly products. There are various
initiatives considered by the company so that it can be easy to boost the overall image of the
company.
Legal factors
In the overall activities of the company, it has been seen that nestle focused on diversification as
it can help in merger and acquisition in the competitive market. It will also help in boosting the
image of the company in the competitive market.
Five force models
It is a model that focuses on the competition level prevailing in the market. This tool is beneficial
for the company as with this tool it can be simple to maintain the competitive advantage in the
market. Also with this tool it can be simple to manage the overall activities of the company
(Mathews, 2016).
Marks and Spencer example
Threat of substitute
It can be seen that it is high as the products offered by the company are easily available in the
market. The customers have the wide choice to choose from the products which is offered by the
company.
Bargaining Power of supplier
It can be seen that the competitive forces forced the company to outsource and due to the cost it
is reduced which weakened the power of the suppliers. The emphasis is mainly on the private
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label which offers power to the company over the suppliers. The switching cost of the company
mainly depends on the outsourced suppliers and is mainly low.
Competitive rivalry
It can be seen that competition level is high for the retail sector and the competition is also
enhancing in the online segment where customers can purchase the products easily. So, the
competitors of the company are Tesco and Wal mart (Mukherjee, 2018).
Bargaining power of buyers
The overall bargaining power of the customers is significant. The customers are price sensitive
and also they have the low switching cost. The company should focus on building the loyalty and
should also provide customers to unmatched the overall value.
Threat of new entrants
The retailers have low threat of new entrants as the capital investment is huge and also it is
important for the company to focus on attaining the cost efficiency in the competitive market. It
can also been seen that competitors are offering discounts to the customers which is impacting
the overall potential customers.
SWOT ANALYSIS
This tool is considered for strategic planning and also to take accurate decisions in the
workplace. It is important for the top management to consider this tool as it can help to find out
the weakness, strength, opportunities and threats prevailing in the market (Menga et al., 2015).
EBAY example
Strength
The strength of the company is related with the large market share as it has been seen that
company has an online presence which boost the overall sales of the company in the competitive
market.
Weakness
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It is related with home delivery services. The company delays the products at the time of home
delivery so it impacts the overall satisfaction level of the customers in the competitive market.
So, it is important to maintain the overall distribution channel so that it can be easy to boost sales
of the company in the competitive market (Dominici, 2017).
Threat
The competitors present in the market are considered as the threat to the company. The
competitors are Amazon and Flipkart. So, the level of competition is high which impact the
routine activities of the company. It is important to maintain it so that growth can be attained in
the market (Shin and Dess, 2017).
Opportunities
It company has the potential to boost the market share by focusing on innovative approaches as it
can help in maximizing the profits. Innovative approaches are important to be considered so that
it can be easy to boost the market share in the market.
Resource based view
This is one of the important tools that should be considered by the company so that proper
evaluation of the activities can be taken (Hitt, Xu and Carnes, 2016). This tool is best for the
company as it can help the top management to focus on managing the overall competition level
prevailing in the market. Tangible and intangible resources are the factors which are considered
in this tool (Huang et al., 2015).
Tata Motors Example
It has been seen that the resources should be maintained so that large market share can be
maintained. Tata Motors also emphasize on offering the features which are unique and this is the
only reason which boosts the overall image of the company in the market. In the market, it is
important for the company to enhance the market share so that competition level can be
maintained. Also, by using the resources in the right manner it can be easy to boost the overall
profits in the market and also it will help in accomplishing the set goals and objectives in the
competitive market (Garrette, Phelps and Sibony, 2018).
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Conclusion
So, it can be concluded that these tools should be considered by the top management to evaluate
the overall factors. It is important to evaluate the factors so that growth can be attained in the
competitive market. Controlling the factors which impact in a negative manner is important as it
can help in boosting the overall productivity of the company and also for long term the company
can sustain in the competitive market.
References
Business to you., 2018.Frameworks. [Online]. Available at:
https://www.business-to-you.com/frameworks/. [Accessed on14 December, 2018].
Dominici, G., 2017. Systems Thinking Research in the Twenty-First Century: A SWOT
Analysis. International Journal of Systems and Society (IJSS), 4(1), pp.10-18.
Garrette, B., Phelps, C. and Sibony, O., 2018. Structure the Problem: Analytical Frameworks.
In Cracked it! (pp. 95-116). Palgrave Macmillan, Cham.
Hitt, M.A., Xu, K. and Carnes, C.M., 2016. Resource based theory in operations management
research. Journal of Operations Management, 41, pp.77-94.
Huang, K.F., Dyerson, R., Wu, L.Y. and Harindranath, G., 2015. From temporary competitive
advantage to sustainable competitive advantage. British Journal of Management, 26(4), pp.617-
636.
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Mathews, J., 2016. An Information Processing View of Competition Analysis. IUP Journal of
Business Strategy, 13(1), p.7.
Menga, E., Dan, A., Lu, J. and Liu, X., 2015. Ranking alternative strategies by SWOT analysis
in the framework of the axiomatic fuzzy set theory and the ER approach. Journal of Intelligent &
Fuzzy Systems, 28(4), pp.1775-1784.
Mukherjee, I., 2018. Applying Porter’s Five Force Framework in Emerging Markets—Issues and
Recommendations. In Strategic Marketing Issues in Emerging Markets (pp. 307-316). Springer,
Singapore.
Shin, H. and Dess, G.G., 2017. From Swot to Value Appropriation: Career
Implications. Academy of Strategic Management Journal, 16(1), pp.165A-168A.
Yüksel, İ., 2012. Developing a multi-criteria decision making model for PESTEL
analysis. International Journal of Business and Management, 7(24), p.52.
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Appendix
(Source: Business to you., 2018).
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