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Write an essay of explaining the main strategy development tools and how they are used 1200 words;
Competitive Strategy
Introduction
In this paper, various strategic development tools have been discussed. In order to stay competitive and ahead in the market marketer used to analyze the market situation and its strength and weakness and accordingly marketer take a decision. Tools which are used by the marketer to analyze the micro and macro environment are SWOT Analysis, PESTLE Analysis, and Five Fore Model Analysis, Gap Analysis etc. This paper covers strategic tools used by marketers such as SWOT Analysis, PESTLE Analysis, and Five Force Analysis.
Strategic Tools
Strategic tools are those tools which are been used by the marketer or by the analyst to determine the future trends of the market. Strategic tools play a vital role in analyzing the various situation of the business environment as well it also helps in determining the internal strength and weakness of the organization (Mun, J., 2002). In order to analyze the micro as well as macro-environmental factor organization or marketer uses strategic tools such as Pestle analysis, SWOT Analysis etc.
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SWOT examination is one extremely powerful tool or device for the investigation of regularevidence and facts – for both, inner (qualities, shortcoming) and outer (openings, dangers) factors.SWOT Analysis reduces the threats and enables the organization to avail opportunity. SWOT examination enables the organization to determine possible feasible option to move in the future.(Valentin, E.K., 2001).
It can be used for various purposes. Some of them are as follows
For the purpose of business planning, for conducting strategic planning, outsourcing a service, resource or activity, a method of sales distribution and so on. SWOT Analysis is the techniques which are very useful for understanding all types of situations in organization and business.
There is various software which an organization can use to develop it SWOT Analysis Chart such as Gliffy. Gliffy is the tools which are web-based which help in creating the Charts showing the Strength, weakness, opportunity, and threats.
The organization uses SWOT Analysis
The organization uses SWOT Analysis in order to know its strength, weakness, opportunity, and threat. This analysis enables the organization to know its weakness which can be converted into strength and analysis also helps in effectively avoiding the threat.
With a specific end goal to assess the organization's qualities, shortcomings, openings, and dangers, a table of four areas ought to be utilized to depict the attributes of each factor and how the organization stands in light of each factor (Chermack et al., 2007). SWOT examination format help company to assess new tasks and thoughts. Be that as it may, numerous organizations don't have the experience and information to fabricate an expert SWOT examination report. So for this company or organization can use various web-based tools to create the SWOT analysis in an effective manner.
FIVE FORCE Analysis
Five Force Model is developed by the Michael E. Porter. Five Forces Model is a device used for inspecting rivalry of a business it enables the organization and management to determine the power of their competitors and assist them in taking a feasible decision. It helps the organization to engage in the business which is fruitful for it and produces more profit.
Five Force Analysis is an important tool which is used by the organization and marketer to determine the forces that shape competition in the particular industry. The organization uses this because it helps the organization to adjust their strategy to the environment, and helps in improving the potential revenue of the organization (Narayanan et al., 2005).
The organization uses FIVE FORCE Analysis
Five force is a strategic tool which is designed to evaluate the global overview. It helps in reviewing the strengths of the market position which is based on the key five forces.
In order to use Porter's five force organization need to work with the following question.
In order to use Porter's five force organization need to work with the following question.
• The threat of new entry- This includes a question such as it is easy to start the new business, what are regulation and rules, what and how financed is required and so on.
• Buyer power? - This includes a question such as how powerful buyers are, numbers of buyers, and so on.
• Supplier’s power? - This includes a question such as a number of suppliers, is supplier hold power etc.
• The threat of substitute? - This includes is it easy to avail alternatives, whether it can be automated or outsourced etc.
• Competitive rivalry? - This includes the level of competition in the sector, a situation of the competitors etc.
The organization uses five force analysis for strategic planning initiative. The organization uses this analysis in order to evaluate an entire industry as opposed to an organization. The "powers" allude to five parts of an industry that direct its attractiveness. The powers incorporate energy of providers, the energy of purchasers, and a hindrance to entry, focused competition, and accessibility of substitutes. By assessing every one of these components, an administrator or business can decide if to enter a specific industry.
This analysis entirely focuses on the industry in which a particular industry is operating.The analysis will enable the organization to know its competitor's powers and power of its substitute's product, entry restriction and other aspects of the industry. Which will guide the management of the organization to take strategic decision for their future.
This analysis helps the organization in determining the decision related to make the entry into particular industry or not. It also in determining the bargaining power of the suppliers and buyers. If the bargaining power of buyer is low then it is good for the organization whereas as if the bargaining power of supplier is low it is also good for the organization. But if the bargaining power of supplier or buyer is high then it will guide the management in taking corrective measure and step to reduce the bargaining power of both.
This analysis helps the organization in determining the decision related to make the entry into particular industry or not. It also in determining the bargaining power of the suppliers and buyers. If the bargaining power of buyer is low then it is good for the organization whereas as if the bargaining power of supplier is low it is also good for the organization. But if the bargaining power of supplier or buyer is high then it will guide the management in taking corrective measure and step to reduce the bargaining power of both.
PESTLE Analysis
It is a tool which is used by the marketer to evaluate and analyses, monitor the macro environmental factors of an organization.
The main purpose of using the Pestle Analysis is to identify various external economic, political, social, technological and legal environmental elements which may affect the organization performance (Srdjevic et al., 2012).
The organization uses PESTLE Analysis
The organization uses Pestle Analysis in order to determine the political, legal, social, technological and economic factors. For using this tool organization uses to follows some step to analyze their business environment and their threats, opportunities available.
The organization uses Pestle Analysis in order to determine the political, legal, social, technological and economic factors. For using this tool organization uses to follows some step to analyze their business environment and their threats, opportunities available.
1. Brainstorm Factors
The first step for using Pestle Analysis is considering all the political, legal, economic, technological and social factors.
2. Brainstorm opportunities
The second step is identifying the changes that are taking place in the business organization environment. Here management needs to look at each change and try to brainstorm the opportunities that are available to avail. For example, if organization find that developing a new product is fruitful with new technology and considering the social factor of the customer then organization need to develop the product to earn more profit.
3. Brainstorm threats
The third step is brainstorming the threat which may affect the business performance. This will enable the organization in avoiding the negative impact of threat. For example, if conducting the pestle analysis organization found that there may be a decrease in demographic then organization may take the decision to open their market in other regions also.
4. Take Action
At the end take the final action, for example, the opportunities which are identified should be availed, and the threat is minimized by taking an effective decision. Here organization needs to make new business plan through observing its analysis report.
The first step for using Pestle Analysis is considering all the political, legal, economic, technological and social factors.
2. Brainstorm opportunities
The second step is identifying the changes that are taking place in the business organization environment. Here management needs to look at each change and try to brainstorm the opportunities that are available to avail. For example, if organization find that developing a new product is fruitful with new technology and considering the social factor of the customer then organization need to develop the product to earn more profit.
3. Brainstorm threats
The third step is brainstorming the threat which may affect the business performance. This will enable the organization in avoiding the negative impact of threat. For example, if conducting the pestle analysis organization found that there may be a decrease in demographic then organization may take the decision to open their market in other regions also.
4. Take Action
At the end take the final action, for example, the opportunities which are identified should be availed, and the threat is minimized by taking an effective decision. Here organization needs to make new business plan through observing its analysis report.
References
Mun, J., 2002. Real options analysis: Tools and techniques for valuing strategic investments and decisions (Vol. 137). John Wiley & Sons.
Valentin, E.K., 2001. SWOT analysis from a resource-based view. Journal of marketing theory and practice, 9(2), pp.54-69.
Chermack, T.J., and Kasshanna, B.K., 2007. The use and misuse of SWOT analysis and implications for HRD professionals. Human Resource Development International, 10(4), pp.383-399.
Narayanan, V.K., and Fahey, L., 2005. The relevance of the institutional underpinnings of Porter's five forces framework to emerging economies: An epistemological analysis. Journal of Management Studies, 42(1), pp.207-223.
Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2012. Identifying the criteria set for multicriteria decision making based on SWOT/PESTLE analysis: a case study of reconstructing a water intake structure. Water resources management, 26(12), pp.3379-3393.
Valentin, E.K., 2001. SWOT analysis from a resource-based view. Journal of marketing theory and practice, 9(2), pp.54-69.
Chermack, T.J., and Kasshanna, B.K., 2007. The use and misuse of SWOT analysis and implications for HRD professionals. Human Resource Development International, 10(4), pp.383-399.
Narayanan, V.K., and Fahey, L., 2005. The relevance of the institutional underpinnings of Porter's five forces framework to emerging economies: An epistemological analysis. Journal of Management Studies, 42(1), pp.207-223.
Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2012. Identifying the criteria set for multicriteria decision making based on SWOT/PESTLE analysis: a case study of reconstructing a water intake structure. Water resources management, 26(12), pp.3379-3393.
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