Using PESTLE, Porter’s Five Forces, And SWOT Analysis As Strategic Development Tools For Businesses

Strategic development tools

Write an essay of explaining the main strategy development tools and how they are used in Buisness.

The three strategic tools that will be discussed here are pestle, Porter’s five forces, and SWOT. The company that will be discussed here is one of the leading grocery outlets in Australia, Woolworths. In order to attain a good level of growth, they have to have a clear idea about the internal and the external environment. This will help them to identify their areas of strengths and weaknesses as well (Theaker 2017).

Strength-

This mainly talks about the areas of strengths that a company has. This helps the company in understanding the uniqueness that is present within hem and not in any other company. What the driving factors that would attract the customers to this company than others. For an instance, Woolworths is already the leading retail company in Australia and it uses its strong market position as one of the major strengths. It also uses good technological sources. They have a strong resolves base along with good human resource and a potential position in the market. They also use the policy of recycling g that makes them unique. Reduction in carbon footprint and in packaging costs. The zero food waste which is part of their CSR is also one of their major strengths (Fabbri and Klapper 2016).

Weakness-

This shows the areas that the company can improve in the long run and what are the facts that they must avoid. The weakness of Woolworths is that the Government limits its move so that the price of the products can be kept high. Its partnership with Coles often limits its ability to rule the Australian retail market (Fernie et al. 2015).

Opportunities-

This mainly shows the areas in which the company can actually improve in some areas and can utilize the changes taking place in the market or in the government policies in a better way. Woolworths uses the opportunities like the changes in the lifestyle of the consumers, the changes in the supply chain in the best way possible. They try their level best to cope up with the changing needs and demands of the consumer (Song et al. 2017).

Threats

This mainly shows the treats that the company might be facing and to decipher the ways in which they might give a tough competition to their competitors. The major threat that Woolworths has is from the other competitors. One among them is Coles. Government rules and the frequent changes in the tax policies and the rules and regulations is also one of the major threats (Obeng et al. 2016).

Woolworths: A case study

The macro environmental factors that affect the company are determined through the Porters’ 5F

Political-

The political condition greatly affects the working of a company because the government might impose a new tax or some new rules that will be affecting the workings of the company.  The Australian Govt. implements many new rules that affect the working of the Woolworths (Balasopoulou et al. 2016).

Economic-

Economic changes play a major role in the working of any companies. There can be changes in the economic trends like a change in the value of currency or changes in economic market condition. There have been changes in the currency and this has greatly weakened the Australian dollars and gas affected the working of the retails companies like Woolworths (Thomas et al.  2014).

Social

The social trends like the culture, demography and other such things create many changes in the workings of the companies. Woolworths have to take up more social initiatives and promote the social and community welfare. The customers want that the companies are taking up more corporate and social responsibility (Thomas et al. 2014).

Technological

Technological advancements are one of the most important things that the companies must consider in order to provide better facilities and products to their customers. Woolworths have started using the green refrigeration technology that is helping in storing the perishable products for a long time (Greenspan 2015).

Environmental

The environmental factors are very important in case of the workings of any companies. The factors include the climatic and the geographical conditions. Woolworths particularly is likely to get affected by the climatic and the weather conditions because of cultivation and agriculture of all fresh fruits, vegetables, and other products are largely dependent on the climate. The petrol and the winemaking business also depend on the environment and these activities might harm the environment in many ways. So, Woolworths have to take proper measures.

Legal

The law that is enforced in the country has a major impact on the working of the companies. Particularly Woolworths is affected due to the legal laws like the carbon law that has been implemented by the Australian government. Being a leading firm in the market, it has to abide by the law and adopts the fair policy.

Bargaining power of the buyers

The bargaining power of the consumers is one of the most important aspects that affect the position and the working of the company. As there are many alternative options for the consumers in Australia they can easily switch over to any other supermarkets (Vontetsianos and Geitona 2016). So, the bargaining power has always stayed high.

PESTLE analysis of Woolworths

Bargaining power of the suppliers

The bargaining power o the suppliers are also high orb moderate. There are many suppliers who can actually give a very tough competition to Woolworths (Yunna and Yisheng 2014).

Threats of new entry

This is one of the major concerns for the companies because the customers are always in need of something new and innovative. So, if new firms enter the market and provide the customers with new products at a discounted price then it is likely that the consumers will shift their attention to those alternative firms. However, Woolworths is already the leading retailers in Australia and has bee enjoying a good position so the threat of entry of new firms is unlikely. The market is rigid and is already taken over by the companies like Woolworths and Coles. So it would be very difficult for the new firms to enter and operate.

Rivalry among existing firms

Apart from the entrance of the new firms, the competition can also start within the already existing firms. There can be a very tough competition taking place between one firm and the other that are already operating within the market. In case of Woolworths, the chances of enmity among the already existing firms are really very high. The major competition exists between the markets like Asda, Coles, Wesfarmers, and Woolworths. So, the internal competition going on between these firms are really very high.

The threat of Substitute-

If there are some alternative products or substitutes then the customers might shift their attention and the existing products might suffer a loss. However, as far as Woolworths is concerned, the threat of substitutes is really low. This is because the day to day retail products are really essential for people and there is always a good demand for it.

Thereby it can be concluded that all these marketing tools are to be used so that the external and the internal industry conditions can be analyzed properly.  It is based on those results that the company will be taking the further steps. It will help them to find the areas of strengths and the threats. Knowing the macro and the microenvironment will help the company to take up many new strategies that will help in operating in a more efficient manner

References

Balasopoulou, A., Latsou, D., Kousoulakou, H., Michael, N., Mc Kenzie, D., Mair, A., Vontetsianos, T. and Geitona, M., 2016. The use of PESTEL as a change management tool to inform change management of polypharmacy and adherence within SIMPATHY program. International Journal of Integrated Care, 16(6).

Fabbri, D. and Klapper, L.F., 2016. Bargaining power and trade credit. Journal of Corporate Finance, 41, pp.66-80.

Fernie, J., Fernie, S. and Moore, C., 2015. Principles of retailing. Routledge.

Greenspan, R., 2015. Walmart: Five forces analysis (Porter’s model). Panamore Institute.

Gunjal, T.D., 2017. A SWOT ANALYSIS AND RECENT FDI CONTROVERSY OF RETAIL SECTOR IN INDIA. International Research Journal of Multidisciplinary Studies, 3(4).

Obeng, E., Luchs, R., Inman, J.J. and Hulland, J., 2016. Survival of The Fittest: How Competitive Service Overlap and Retail Format Impact Incumbents’ Vulnerability to New Entrants. Journal of Retailing, 92(4), pp.383-396.

Song, J., Sun, Y. and Jin, L., 2017. PESTEL analysis of the development of the waste-to-energy incineration industry in China. Renewable and Sustainable Energy Reviews, 80, pp.276-289.

Theaker, A., 2017. What is public relations?. In The Public Relations Strategic Toolkit (pp. 17-27). Routledge.

Thomas, S., Chie, Q.T., Abraham, M., Jalarajan Raj, S. and Beh, L.S., 2014. A qualitative review of literature on peer review of teaching in higher education: An application of the SWOT framework. Review of educational Research, 84(1), pp.112-159.

Yunna, W. and Yisheng, Y., 2014. The competition situation analysis of shale gas industry in China: Applying Porter’s five forces and scenario model. Renewable and Sustainable Energy Reviews, 40, pp.798-805.