Strategy Development Tools For Business: PESTEL, Five Forces, Resource-Based View, PROFIT, Input/Output, SWOT Analysis, Generic Strategies, Ansoff, Ghemawat
PESTEL Analysis
The paper will highlight the important strategy development tool that is necessary for the organizations to consider for smooth functioning. The strategy development tools which will be used in the paper are SWOT analysis, Porter five force models, Pestle analysis and resource Based view.
It has been seen that through this framework it can be easy to consider the right decision which will refine the plans in the workplace. They are used in the business by analyzing the overall outcome which is derived from the activities which are performed. This tool is necessary to focus on the factors related to strength, weakness, threats and opportunities. SWOT analysis aware about the situations which are taking place in the workplace and help in the process of decision making and strategic planning (Madhavaram, Hunt and Bicen, 2017).
Strength
Positive image in the market is considered as the strength of the company. It can be stated that by having goodwill in the market it can be easy for the company to maintain its large customer base in the competitive market. There are various factors which are also important aspect in boosting the image of the company. It is related with training, as it is given to the employees so that they can serve the customers in a proper manner. So, this is the factor that assists the employees to compete in the competitive market. This tool is considered by the top management of the organization as it provides a chance to consider right decision and it also focus on strategic planning (Belton, 2017).
Weakness
In the present scenario, it has been analyzed that the weakness is related with the food quality which need improvement. Also, it can be seen that the company has a slow process if innovation and updated technology is taken into consideration. Market saturation has also been increased the overall problems for the company to increase the market share.
Opportunities
The company should consider the strategy related to new product line so that expansion can take place in the market. The company should also emphasize on minimizing the overall cost of the products as it can help in boosting the customer base.
Threats
Competition level is also considered as one of the threat of the company. It can be seen that due to high competition level the affect will be on the growth as there are competitors like Burger King who exist in the market.
Five Forces Analysis
It is one of the popular used strategy planning tools. It is considered by the company so that emphasize can be given on the external factors. The external influences are taken into consideration by this tool which helps the company to focus on the area of improvement. S, these tools should be considered by the sales person or the top manager of the sales so that proper decisions can be taken in reference to the external environment (Tan and Sousa, 2015).
- Political factor
It can be stated that the import duty on products can impact the operations of the company as it imports the inventory from outside UK like China and East Asia. Also, tax on supermarkets was imposed with the name of “Tesco name” by the local council of UK government. So, it has impacted the activities of the company in a negative manner.
- Economic factors
The supermarkets in UK are impacted due to the labor cost. Like the annual wage bill is one GBP 4.5 Billion. But in 201, the UK minimum wage rate has been enhanced by 4.4% and this has upward the overall cost of the company in million off pounds in UK (Pickles, Barrientos and Knorringa, 2016).
- Social factor
Consumer shopping experience is also changing from time to time. Tesco emphasizes on UK customers and also it is important to offer proper products and services to the customers in the market.
- Technological factor
Due to the latest technology considered by the company it has been seen that new opportunities for the company is to regain the trust of the customers. Like the company considered RFID technology so that customer experience can be boosted.
- Environmental factor
The company is considering the use of renewable resources and they generate 100% of its electricity by 2030. The focus of the company is on reducing the carbon footprint by 2020.
- Legal factor
In 2016, there are 17 workers who considered the legal actions against the employer in relation to the age and gender discrimination.
It emphasizes on considering the strategic resources with the overall potential to focus on the competitive advantage of the company. The resources can be easily exploited by the company as it can help in accomplishing the sustainable competitive advantage. This tool mainly focuses on managing the overall resources of the company in the competitive market. The production department should emphasize on considering this tool as it can help in offering in-depth analysis of the factors related to managing the overall resources of the company. There should be proper utilization of the resources so that profits can be maximized (Sodhi, 2015).
Resource-Based View
It has been seen that company has to focus on the tangible resources in relation to the physical resources. In physical resources the sales location, advertisement strategy is taken into consideration so that sales can be boosted of the company.
In human resource the emphasis is given on software development teams and also on the highly skilled workers who have the knowledge and creative skills of problem solving. Intellectual resources also emphasize on maintaining the quality of the products and also the strategic partnership us considered by the company with Microsoft (Shao et al., 2018).
It has been seen that this tool changes the working pattern of the employees and also with this it can be simple to attain the positive outcome. With the help of this tool it can be simple to analyze the external factors related to customers, buyers and also the competition prevailing in the market. This maintains the market share of the company in the market (Porter and Kramer, 2018).
- Bargaining power of the buyers
The customers who are linked with the company are individual buyer so they have more bargaining power. Also the organization focused on minimizing the price of the products as it can help in maintaining customer base.
- Bargaining power of suppliers
It is low as focus is given by the company on Safeway supermarkets and there is no dependency on the suppliers. Also one of the reasons is related with the large market share of the retailers in Australia and New Zealand (Berman, 2015).
- Threat of new retailers
It is high as there is high need of capital investment. So, it is not easy for the companies to enter into the market.
- Threat of substitution
It is also high as similar ranges of products are offered by other retailers. Like Nudie product is offered by Coles also so it is important to reduce the price of product to enhance market share.
- Rivalries
There are many competitors of the company like Myer and Coles. Differentiation strategy is important to be maintained so that it can be easy to boost the growth in the highly competitive market (Wagner III and Hollenbeck, 2014).
Conclusion
Therefore, these tools are important to be considered by the company as it emphasize on managing the overall resources of the company. With the help of these tools it can be easy for the company to focus on strategic analysis of the overall activities which will boost the growth of the company in the competitive market. The examples like Apple, Woolworths, Tesco and McDonalds considered these tools which helped them to manage the overall outcome of the company.
References
Belton, P., 2017. Competitive Strategy: Creating and Sustaining Superior Performance. Macat Library.
Berman, B., 2015. How to compete effectively against low-cost competitors. Business Horizons, 58(1), pp.87-97.
Madhavaram, S., Hunt, S.D. and Bicen, P., 2017, May. The FREE (Firm Resources and External Environment) Framework as an Alternative to SWOT: An Abstract. In Academy of Marketing Science Annual Conference (pp. 49-49). Springer, Cham.
Pickles, J., Barrientos, S. and Knorringa, P., 2016. New end markets, supermarket expansion and shifting social standards. Environment and Planning A, 48(7), pp.1284-1301.
Porter, M.E. and Kramer, M.R., 2018. Creating shared value. In Managing Sustainable Business (pp. 327-350). Springer, Dordrecht.
Shao, Y., Wu, T., Qiu, H. and Wang, Z., 2018. Ambidextrous activities of internet-based entrepreneurships in Apple App Store: two sides of user feedback. Technology Analysis & Strategic Management, pp.1-16.
Sodhi, M.S., 2015. Conceptualizing social responsibility in operations via stakeholder resource?based view. Production and Operations Management, 24(9), pp.1375-1389.
Tan, Q. and Sousa, C.M., 2015. Leveraging marketing capabilities into competitive advantage and export performance. International Marketing Review, 32(1), pp.78-102.
Wagner III, J.A. and Hollenbeck, J.R., 2014. Organizational behavior: Securing competitive advantage. Routledge.