HI6006 Assessment 1: Examining Strategy Development Tools Use

This essay provides a comprehensive analysis of strategy development tools, focusing on PESTLE, SWOT, and Porter's Five Forces. It explains how PESTLE analysis evaluates the external environment through political, economic, social, technological, legal, and environmental factors, using Apple as an example. The SWOT framework is discussed as a tool for assessing internal strengths, weaknesses, opportunities, and threats, exemplified by Toyota. Porter's Five Forces model is presented as a method for understanding competitive intensity, illustrated with Cadbury. The essay emphasizes the importance of these tools for companies aiming to achieve a competitive advantage and make informed strategic decisions. Desklib offers this assignment as a study resource, along with a wealth of other solved assignments and past papers.

Running Head: Competitive strategy
Competitive Strategy

Competitive strategy
Development tools are important to be considered by the company so that growth can be
achieved in the market. In this paper, the discussion will be made on the SWOT, PESTLE, and
Porter five force models. If these tools are considered by the company then it can be possible to
achieve competitive advantage.
PESTLE ANALYSIS
This tool is considered as a framework which can help to evaluate the external
environment analysis of a company. There are six factors in this analysis like political,
economic, legal, social, technological, environmental and legal. It is analyzed that this tool offers
a proper analysis of the environment in which the company conducts the activities. It is seen that
it is important for the company to consider these aspects so that growth can be achieved in an
effective manner. The first factor is related to the political factor in which the activities related to
government are considered.
It is seen that in this there are policies which are related to trade tariffs and fiscal policies
that give overall impact on the activities of the company (Grant, 2016). These factors give
impact on the business and economic environment of many countries. Next is an economic factor
in which is related to the determinants of the overall performance of the economy of a specific
country. It is seen that the major effect is seen in the economy of the country in which the
organization conducts the routine activities. Also when the rises in the inflation rate takes place
it gives direct impact on the prices of the products and services given by the company (Yüksel,
2012).
The social factor is the next factors that come under pestle analysis. It is seen that it is
considered so that proper analysis of the major determinants of cultural trends and age can be
made. The technological factor is also concerned with the innovation that takes place with the
help of latest technology (Gupta, 2013). When the company focuses on latest technology then it
can be possible to accomplish overall goals and objectives. Next factor is a legal factor in which
the laws are considered that give impact on the overall activities of the company (Obeidat et al.,
2015). The last factor is an environmental factor in which it is concerned with the surrounding of
the company. It is an important factor that directly gives impact on the operations of the
environment (Ho, 2014).
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Competitive strategy
For example: By considering the PESTEL analysis of Apple it is seen that the policies of the
government give direct impact on the cost which has a connection with labor, manufacturing,
and taxes. It is seen that economy of the country is also affected by considering the buying
decision of the customers. The technological factor also affects the innovation of the company in
reference to its products and services. It is seen that rules and regulations give impact on the
overall policy formation of the company. Also, it is seen that the company is facing
environmental issue which is related to the disposal of the used products that can impact on the
overall activities in the countries. This concept is used by the managers who are giving direction
to their employees.
Analysis of SWOT framework
SWOT analysis is considered as a framework that offers details information of the
internal environment of the companies. In this framework, there are four parts strength,
weakness, opportunities, and threats. It is essential so that strategic planning can be done
effectively. It is seen that this concept is used by the top management of the organization so that
proper evaluation of the environment can be done (Bell and Rochford, 2016). In this section
strength of the company is related to various aspects of the marketing mix and also the market
share of the company. In strength, proper evaluation is done of the brand value and the overall
demand for the products (Shin and Dess, 2017).
Next aspect is the weakness in which the relation is with proper utilization of the
resources in an effective manner. The weakness of the company is related to lack of loyalty and
weak distribution channel (Menga et al., 2015). Opportunities are related with the chance to
enhance the market share and also to the new introduction of the products so that the activities
can be conducted smoothly. Next factor is related to the threats. The level of competition and
also he outdated technologies considered by the company can be a major threat.
Example- if Toyota is taken into consideration than it is seen that one of the major strength of
the company is the goodwill in the market. It is seen that leading position is one of the strengths
of the company in the market. The company can gain good position by advertising and
promotion of the activities. The weakness of the company is related to the ineffective
advertising and also the information is leaked. Opportunities are related to the expansion of the
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Competitive strategy
products in the market with the help of diversification. The threat of the company is related to the
competitors prevailing in the market. This tool is used by the top management of the company
so that activities can be conducted in a smooth manner.
Porter five forces
This tool is taken into consideration so that proper understanding of the competitive
environment of the company can be there. In this first factor is related to the competitive rivalry
which states the strength of the competitors and also it directly gives impact on the overall prices
of the products given by the company in the market. Next factor is related with the supplier
power in which the analyzes is made of the number of suppliers in a country and also if there are
many suppliers then it can be seen that the power reduces and if there are few suppliers then
demand increases (Hill, Jones, and Schilling, 2014).
Power of the buyer is also one of the factors in which the analysis is made of the buyers
present for the company. If there are many buyers then the price of the products will be
considered by the buyers and if numbers of buyers are low then it is seen that company decides
the price of the products. The threat of substitute is another factor in which the options that are
available in the market are considered and also if there are more substitute then the direct impact
is seen on the prices. The last factor is related to the threat which is related to the new entry in
the overall market. It is seen that this force has a connection with the high cost which is related to
the entry into the market (Porter and Kramer, 2018).
For example, Cadbury is the largest brand in the market and it is seen that the threat of new
entry is high and also the substitution of the products can be done easily. The power of suppliers
is low and also the power of buyer is high. If the focus is given to the rivalry then it is seen that it
is high as there are many competitors present in the market.
So, every organization should focus on considering the development tools so that growth can be
achieved in a proper manner.
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Competitive strategy
Reference
Bell, G.G. and Rochford, L., 2016. Rediscovering SWOT’s integrative nature: A new
understanding of an old framework. The International Journal of Management Education, 14(3),
pp.310-326.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Gupta, A., 2013. Environmental and pest analysis: An approach to external business
environment. Merit Research Journal of Art, Social Science and Humanities, 1(2), pp.13-17.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), pp.6478-6492.
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.
Obeidat, M., North, M., Richardson, R., Rattanak, V. and North, S., 2015. Business intelligence
technology, applications, and trends. International Management Review, 11(2), p.47.
Porter, M.E. and Kramer, M.R., 2018. Creating shared value. In Managing Sustainable
Business (pp. 327-350). Springer, Dordrecht.
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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