SWOT Analysis
The essay helps in the analysis of the different strategic development tools which are being used by the different companies in the entire market. Furthermore, the usage of these respective tools namely SWOT, PESTEL, Ansoff Matrix and Porter’s Five Forces analysis is required to be identified as these help in the success of the firm in the competitive market.
SWOT analysis is one of the strategic planning technique which is being used to help and assist the organization in identifying the strengths, weaknesses. opportunities along with threats that are related to the business competition or the planning of project. Moreover, the essential kind of objective of SWOT analysis is to recognize the different variables and allot huge variables that can adversely affect accomplishment that can help in providing the goals efficiently (Charan 2017).
Strengths includes various positive traits of the business and this mostly incorporate the different kinds of resources along with viable benefits which will help in identifying the significance and present with the competitive lead.
Weaknesses includes the various factors which are in control of organization and this can reduce the different kinds of weaknesses in an appropriate manner. The weaknesses embody various internal kind of facets of the business that can lessen the esteem and the services which are being provided by the products of the organization.
Opportunities are the factors which helps in inclusion of the external factors which symbolizes incentive for the survival of business and thrive in the entire marketplace. These are the various kind of variables which includes opportunities which will provide different advantages along with determination of the current issues as this will help the company to be ahead of their rivals and this will provide them with competitive advantage as well.
Threats are the other factors which is inclusive of the external kind of components which are beyond the ability to control the business. The most essential threat which is being faced by the firms is rivalry and there are different other costs which is inclusive of the incorporate unsustainable kind of cost increments by the different suppliers. There can be different financial downturns of the company that can be huge threat for them in comparison to the other competitors in the entire market.
Competitive Intelligence Analysis is inclusive of the providing the different kinds of insights on the various competitors to gain knowledge on their moves and this will enable the company to beware of their techniques and reduce the threats as well (Chryssochoidis, Dousios and Tzokas 2016).
PESTEL Analysis
Pestle analysis helps in analyzing and identifying different external factors which are required to be taken into consideration as this helps in accessing factors in relation to situation of the business. The PESTEL analysis is inclusive of:
Political Factors is inclusive of the determining current position of different political parties which may influence development and growth of the business.
Economic Factors is inclusive of examining effects of taxes along with rate of interests along with behavior of the customers in the market (Chryssochoidis, Dousios and Tzokas 2016).
Social Factors is the inclusion of acknowledgement of the changes in the lifestyle of the individuals along with understanding the demographics and culture.
Technological Factors is inclusive of current technology evaluation which is being done by the company in an effective manner.
Legal Factors is inclusive of anticipation of various laws along with regulations that can impact the business.
Environmental Factors includes the identification of environmental issues and regulations which has to be considered.
Ansoff’ matrix is being used by the different organizations both small, medium and large organizations which helps them in evaluating the different growth opportunities in an effective manner. This matrix is commonly known as the market or product grid or matrix. This shows four options for the growth of company for matching up with new and existing products with new and existing markets effectively.
Furthermore, the matrix helps in identifying and highlighting risks which one of the growth strategies can be expose the business to move from one section to the other matrix. The approach moreover offers different strategies related to growth which is inclusive of market penetration, market development, product development along with diversification.
Market penetration is inclusive of selling same kind of products to the customers who are existing target customers and this will require the company to adopt new strategies to increase the overall loyalty among the different customers and improve the process (Zollo, Minoja and Coda 2016).
Market development is inclusive of adoption of the best approach which helps in attracting the new customers in the market to the existing kind of product. Moreover, this is essential in nature to analyze whether the untapped kind of demand of the respective product is present or not (Hernández-Perlines, Moreno-García and Yañez-Araque 2016).
Product development is inclusive of creating new variety of products as to sell the same to the existing customers in the entire market. However, the company can look and find different other ways to enhance the product aesthetic appeal among the customers.
Ansoff’s Matrix
Diversification is the inclusion of the selling the same existing products in new market and this consists of the highest risks. In order to achieve diversification in the entire market, this is essential in nature to understand the market conditions (Madsen and Walker 2015).
Porter’s Five Forces Analysis is being used by the company in the analysis along with identification of the understanding regarding the competitiveness of the business environment and identifying strategies potential kind of profitability. The main five forces are being described as follows:
Competitive Rivalry is the first force in which this helps the company in analyzing the number of strengths of the other competitors in the entire market. The number of rivalries in the entire competitive market has to be identified along with the quality of the products which are being sold by them to the different customers in the competitive market. The competitive rivalry can be intense or minimal in nature depending on the situation (Wakoya and Bayiley 2015).
Power of the suppliers is the other force in which the potentiality of the suppliers is being judged by the company as this will provide them a brief overview on the uniqueness of the products and services which will be sold by them. This can happen that there are few suppliers in the market and this can be a threat for the company in competitive market as well (Javeed and Mukhopadhyay 2017).
Power of the Buyers is the third force in which the choices and preferences of the customers are required to be taken into consideration and this will be easier for the buyers to drive their prices down. The products and services have to be such that this will help the company in becoming more effective in their approaches (Parnell, Long and Lester 2015).
Threat of substitution is the other force which is required to be identified by the company as there can be different companies which sell similar kinds of products in the market and this can be threat for the company as well. This can weaken the position of the company in comparison to the other competitors (Kasim and Dzakiria 2016).
Threat of new entrants is the last force in which the position of the company can be affected by the people’s ability as to enter into the new market and this can be seen at times that the new entrants can take the position in a much easier manner by selling similar products at cheaper prices to customers. This can weaken the position in the entire competitive market as well (Lee, Yoo and Kim 2016).
Conclusion
Therefore, this can be concluded that these are the different strategic tools which can be used by the companies in the entire competitive market as to analyze their potential and position against the competitors and preparing themselves for the future sustainable growth in the market as well.
References
Charan, R., 2017. How High?Potential Leaders Can Master The Macro Environment. Leader To Leader, 2017(85), Pp.31-36.
Chryssochoidis, G., Dousios, D. and Tzokas, N., 2016. Small Firm Adaptive Capability, Competitive Strategy, and Performance Outcomes: Competing Mediation vs. Moderation Perspectives. Strategic Change, 25(4), pp.441-466.
Hernández-Perlines, F., Moreno-García, J. and Yañez-Araque, B., 2016. The mediating role of competitive strategy in international entrepreneurial orientation. Journal of Business Research, 69(11), pp.5383-5389.
Javeed, N. and Mukhopadhyay, D., 2017. Exosomes and their role in the micro-/macro-environment: A comprehensive review. Journal of biomedical research, 31(5), p.386.
Kasim, A. and Dzakiria, H., 2016. Exploring the effects of macro-environment on the predisposition to adopt strategic orientation among small medium size hotel entrepreneurs. International Journal of Economics and Financial Issues, 6(7S), pp.67-71.
Lee, S., Yoo, S. and Kim, D., 2016. When is servitization a profitable competitive strategy?. International Journal of Production Economics, 173, pp.43-53.
Madsen, T.L. and Walker, G., 2015. Modern competitive strategy. McGraw Hill.
Parnell, J.A., Long, Z. and Lester, D., 2015. Competitive strategy, capabilities and uncertainty in small and medium sized enterprises (SMEs) in China and the United States. Management Decision, 53(2), pp.402-431.
Wakoya, A.G. and Bayiley, Y.T., 2015. The Effect of Mass Customization on Competitive Strategy. Journal of Management, 3(1), pp.31-42.
Zollo, M., Minoja, M. and Coda, V., 2016. Toward an Integrated Theory of Strategy: Exploring the Interdependencies among Competitive, Growth and Stakeholder Strategies
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