Analyzing the Market with PESTLE Analysis
Question:
Discuss about the Competitive Strategy for SWOT Analysis and PESTLE.
Development tools play a great role in conducting the activities of the company. To conduct the activities it is seen that proper management and analysis of the market should be there so that growth can be achieved in the company. To achieve success it is seen that company should focus on the tools like Porter five force models, SWOT analysis, and PESTLE. If these are taken into consideration in an effective manner then it can be possible to achieve competitive advantage in a proper manner. These tools of the management give support to the company so that effective strategies can be considered. So, the paper would discuss about the development tools.
It is one of the best tools which are used by the company so that goals and objectives can be accomplished effectively. It is taken into consideration by the marketers so that macro environmental analysis can be conducted in a proper manner. It affects the activities of the company and also profits of the company are based on the activities conducted by the employees. The external factors can be analyzed and also it is seen that evaluation is made so that the company can conduct the activities in a direction.
It is seen that managers can analyze the risks and can give directions so that in right direction activities can be conducted. The information is gathered through this analysis so that employees can conduct the activities in a right direction. The top management or the senior managers of the company consider this technique so that the activities of the company can be managed in a proper manner (Reinboth & Duda, 2016).
In this analysis, there are six types of factors like political, economic, Technological, legal, social and environmental. It also assists to evaluate the business in context to the economic and social growth of the organization. It is seen in the political factor government policy, political stability and also foreign trade policy is taken into consideration. Economic factor gives direct impact on how the company conducts the business and how they achieve profits (Pervan, Curak & Pavic Kramaric, 2017). In this, the factors are economic growth, exchange rates, and interest rates. These factors focus on the demand of the management in the economy and also the government takes into consideration interest rate control and taxation policy. In social factors, the focus is given the belief and attitudes of the population (Rothaermel, 2015). It consists of growth of the population, age distribution and career attitudes. These factors understand the customers and the how marketers react to some particular situation.
Analyzing Competitive Environment with Porter Five Force Models
In technological factor, it is seen that focus is given to the latest technologies and also how this affect the way the products are marketed. In environmental factors, the focus is given on sustainability. In legal factors, it includes health and safety and equal opportunities. The company also focuses on legal policies so that growth can be achieved (Jarzabkowski & Kaplan, 2015).
For example: it is seen that Hershey’s is one of the largest company in the food brand that emphasis on the policies and procedures of the organization. The rules and regulations of the company are considered in the legal factor. In economic factor, the company focuses on the spending pattern and also on the innovation so that growth can be achieved. The company focuses on a technological factor by considering the latest technology so that production can take place in a proper manner.
So, this tool is the best tool that helps to evaluate the condition of the market. Through this tool competitive advantage can also be achieved. It helps to analyze the demand of the customers in the market (Oberholzer-Gee & Yao, 2017).
This tool of management assists in analyzing the competition prevailing in the market. In this tool, there are five factors on which focus is given and the factors are a threat of entrants, power of suppliers, a power of buyers and rivalry against the competitors. This tool emphasizes the overall performance of the company. If this tool is not considered then it can be difficult to conduct the activities of the organization smoothly (Hjaila et al., 2017). It is analyzed that five force analyses help to analyze the environment of the market and according to that only the products are introduced in the market. The company considers the changes by focusing on the five force analysis so that it can be implemented according to the need of the customers. It is seen that when new strategies are implemented it will give advantage and help to achieve competitive advantage for achieving growth in a proper way (Dälken, 2014).
For example: Tesco is one of the largest retail outlets globally. It is analyzed that threat of substitutes is high as consumers can buy any purchase or can substitute the products easily. If the focus is competition level it is seen that it is also high as there are many firms who are offering same products in the market. If the emphasis is given to the suppliers it is seen that it is low as there are various stores who can provide products to the customers. Power of the buyer is also one of the factors and it is seen that it should be considered so that products can be given to the customers and can enhance the overall profitability. The threat of new entrants it is seen that it is high as there are many small businesses who are entering the market. It can be a threat to the company as the products are supplied to the customers at a low price. So, a threat is high if the focus is given on the new entry of the firm.
Analyzing Internal Factors with SWOT Analysis
Five force factors are analyzed by the sales department and also it is analyzed in such a manner that goals and objectives can be achieved in a smooth manner. This factor also helps to analyze the level of competition in the market so that direction can be given to the customers by focusing on the activities of the market. This factor helps to accomplish the overall goals and objectives of the company.
This tool focuses on the overall strength, weakness, opportunities, and threats. SWOT analysis is taken into consideration at the time of starting the business or as a major part of strategic planning exercise. It is seen that this framework is known as a strong support for making decisions as it helps to analyze the opportunities so that success can be achieved. Strength focuses on internal attributes and also gives assistance to the results (Salavou, 2015). It is seen that weakness focuses on the resources that work against the successful result. Opportunities are external factors that help to use the advantage prevailing in the market. Threats are the factors which are external and also it can impact to reduce the overall success of the company (Murphy, 2016).
It is considered so that organization can analyze the actual performance and also the level of productivity of the company. There are various factors that can help to analyze the current situation of the company if the focus is given to this tool. It helps to enhance the strength and opportunities prevailing in the market and focuses on minimizing the threats so that goals can be accomplished in a proper way (Liu & Atuahene-Gima, 2018). If a company knows the strength then it can be easy to achieve success in the market and if weakness is analyzed on the earlier stage by the company then steps of improvement can be taken so that company can achieve success in an effective manner.
For example: it is seen flip kart strength is the brand name, the weakness is related to ineffective proper services offered by the company. It is also seen that the focuses on reducing the threats which are a large number of competitors in the market. So, they reduce it by giving offers to the customers so that goals can be accomplished effectively. Also, the weakness of the company is that the activities are conducted on the online platform there is no retail outlet to sell the products (Steffen, 2017).
SWOT Analysis can be considered at the time of focusing on the insights into the current and future position in the market. It is seen that when the factors of this tool are identified then it can help the company to make the decisions in a proper manner. It can also aim to assist an organization to match with the resources so that activities can be conducted smoothly in the competitive advantage. It is very important to conduct the activities in a smooth manner in the organization so this tool is considered. The analysis can assist the process of decision making so that business can achieve its target in a proper manner (Hanson et al., 2004). This tool captures a particular point of time and also helps to analyze the internal factor of the business in a proper manner.
References
Dälken, F., 2014. Are porter’s five competitive forces still applicable? a critical examination concerning the relevance for today’s business (Bachelor’s thesis, University of Twente).
Hanson, D.J., Dowling, P.J., Hitt, M.A., Ireland, R.D. and Hoskinson, R.E., 2004. Strategic management: Competitiveness and globalisation.6ed. Melbourne: Nelson Thomson Learning.
Hjaila, K., Puigjaner, L., Laínez, J.M. and Espuña, A., 2017. Integrated game-theory modelling for multi enterprise-wide coordination and collaboration under uncertain competitive environment. Computers & Chemical Engineering, 98, pp.209-235.
Jarzabkowski, P. and Kaplan, S., 2015. Strategy tools?in?use: A framework for understanding “technologies of rationality” in practice. Strategic Management Journal, 36(4), pp.537-558.
Liu, W. and Atuahene-Gima, K., 2018. Enhancing product innovation performance in a dysfunctional competitive environment: The roles of competitive strategies and market-based assets. Industrial Marketing Management.
Murphy, C., 2016. Competitive intelligence: Gathering, analysing and putting it to work. Routledge.
Oberholzer-Gee, F. and Yao, D.A., 2017. Integrated Strategy: Residual Market Imperfections as the Foundation of Sustainable Competitive Advantage. Harvard Business School Working Paper.
Pervan, M., Curak, M. and Pavic Kramaric, T., 2017. The Influence of Industry Characteristics and Dynamic Capabilities on Firms’ Profitability. International Journal of Financial Studies, 6(1), p.4.
Reinboth, M. and Duda, J.L., 2016. Effects of competitive environment and outcome on achievement behaviors and well-being while engaged in a physical task. Sport, Exercise, and Performance Psychology, 5(4), p.324.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Salavou, H.E., 2015. Competitive strategies and their shift to the future. European Business Review, 27(1), pp.80-99.
Steffen, B., 2017. The physics of software tools: SWOT analysis and vision. International Journal on Software Tools for Technology Transfer, 19(1), pp.1-7.
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