In this paper the discussion will be made on the strategy development tools which are important for the company to achieve success. The strategy developmental tools that should be considered by the company are related with Porter five forces model, resource based view, Pestle and SWOT Analysis.
It is one of the famous tools which are considered by the marketers to evaluate and to focus on the macro environmental factors. This approach is considered as a strategic planning tool. It is considered to focus on the factors related to political, economic, social and technological factors that can impact the overall project of the company and also the process of planning (Yüksel, 2012).
Nestle Example
Political factor
It has been seen that company focus on various political dynamics like import and export excise duties, taxation and also government permission so that it can be easy to introduce the new products in the market. Like company consider various laws and regulations like ISO 9002 and HACCP to maintain the food safety system.
Economic factor
In context to the overall activities of the company it can be seen that the rise in the market economies can focus on the leverage of huge resource capital and also research and development capability to redesign the products in the competitive market. Also the main focus of the company is to manage the overall impact of the foreign currency fluctuations on import and export.
Social factors
Nestle focuses on maintaining the quality of the products as people in the society are more health conscious. So, company emphasizes on introducing the products which are healthy and preferred by the customers.
Technological factor
Nestle focused on research and development so that it can be easy to enhance the overall capability and also to enhance the efficiency in the competitive market. The company also focused on revising quality products by using latest technology as it can help in boosting the overall innovation in the competitive market.
Environmental factor
The company is engaged in many programs related to eco-friendly products. There are various initiatives considered by the company so that it can be easy to boost the overall image of the company.
Legal factors
In the overall activities of the company, it has been seen that nestle focused on diversification as it can help in merger and acquisition in the competitive market. It will also help in boosting the image of the company in the competitive market.
Five force models
It is a model that focuses on the competition level prevailing in the market. This tool is beneficial for the company as with this tool it can be simple to maintain the competitive advantage in the market. Also with this tool it can be simple to manage the overall activities of the company (Mathews, 2016).
Marks and Spencer example
Threat of substitute
It can be seen that it is high as the products offered by the company are easily available in the market. The customers have the wide choice to choose from the products which is offered by the company.
Bargaining Power of supplier
It can be seen that the competitive forces forced the company to outsource and due to the cost it is reduced which weakened the power of the suppliers. The emphasis is mainly on the private label which offers power to the company over the suppliers. The switching cost of the company mainly depends on the outsourced suppliers and is mainly low.
Competitive rivalry
It can be seen that competition level is high for the retail sector and the competition is also enhancing in the online segment where customers can purchase the products easily. So, the competitors of the company are Tesco and Wal mart (Mukherjee, 2018).
Bargaining power of buyers
The overall bargaining power of the customers is significant. The customers are price sensitive and also they have the low switching cost. The company should focus on building the loyalty and should also provide customers to unmatched the overall value.
Threat of new entrants
The retailers have low threat of new entrants as the capital investment is huge and also it is important for the company to focus on attaining the cost efficiency in the competitive market. It can also been seen that competitors are offering discounts to the customers which is impacting the overall potential customers.
This tool is considered for strategic planning and also to take accurate decisions in the workplace. It is important for the top management to consider this tool as it can help to find out the weakness, strength, opportunities and threats prevailing in the market (Menga et al., 2015).
EBAY example
Strength
The strength of the company is related with the large market share as it has been seen that company has an online presence which boost the overall sales of the company in the competitive market.
Weakness
It is related with home delivery services. The company delays the products at the time of home delivery so it impacts the overall satisfaction level of the customers in the competitive market. So, it is important to maintain the overall distribution channel so that it can be easy to boost sales of the company in the competitive market (Dominici, 2017).
Threat
The competitors present in the market are considered as the threat to the company. The competitors are Amazon and Flipkart. So, the level of competition is high which impact the routine activities of the company. It is important to maintain it so that growth can be attained in the market (Shin and Dess, 2017).
Opportunities
It company has the potential to boost the market share by focusing on innovative approaches as it can help in maximizing the profits. Innovative approaches are important to be considered so that it can be easy to boost the market share in the market.
Resource based view
This is one of the important tools that should be considered by the company so that proper evaluation of the activities can be taken (Hitt, Xu and Carnes, 2016). This tool is best for the company as it can help the top management to focus on managing the overall competition level prevailing in the market. Tangible and intangible resources are the factors which are considered in this tool (Huang et al., 2015).
Tata Motors Example
It has been seen that the resources should be maintained so that large market share can be maintained. Tata Motors also emphasize on offering the features which are unique and this is the only reason which boosts the overall image of the company in the market. In the market, it is important for the company to enhance the market share so that competition level can be maintained. Also, by using the resources in the right manner it can be easy to boost the overall profits in the market and also it will help in accomplishing the set goals and objectives in the competitive market (Garrette, Phelps and Sibony, 2018).
Conclusion
So, it can be concluded that these tools should be considered by the top management to evaluate the overall factors. It is important to evaluate the factors so that growth can be attained in the competitive market. Controlling the factors which impact in a negative manner is important as it can help in boosting the overall productivity of the company and also for long term the company can sustain in the competitive market.
References
Business to you., 2018.Frameworks. [Online]. Available at: https://www.business-to-you.com/frameworks/. [Accessed on14 December, 2018].
Dominici, G., 2017. Systems Thinking Research in the Twenty-First Century: A SWOT Analysis. International Journal of Systems and Society (IJSS), 4(1), pp.10-18.
Garrette, B., Phelps, C. and Sibony, O., 2018. Structure the Problem: Analytical Frameworks. In Cracked it! (pp. 95-116). Palgrave Macmillan, Cham.
Hitt, M.A., Xu, K. and Carnes, C.M., 2016. Resource based theory in operations management research. Journal of Operations Management, 41, pp.77-94.
Huang, K.F., Dyerson, R., Wu, L.Y. and Harindranath, G., 2015. From temporary competitive advantage to sustainable competitive advantage. British Journal of Management, 26(4), pp.617-636.
Mathews, J., 2016. An Information Processing View of Competition Analysis. IUP Journal of Business Strategy, 13(1), p.7.
Menga, E., Dan, A., Lu, J. and Liu, X., 2015. Ranking alternative strategies by SWOT analysis in the framework of the axiomatic fuzzy set theory and the ER approach. Journal of Intelligent & Fuzzy Systems, 28(4), pp.1775-1784.
Mukherjee, I., 2018. Applying Porter’s Five Force Framework in Emerging Markets—Issues and Recommendations. In Strategic Marketing Issues in Emerging Markets (pp. 307-316). Springer, Singapore.
Shin, H. and Dess, G.G., 2017. From Swot to Value Appropriation: Career Implications. Academy of Strategic Management Journal, 16(1), pp.165A-168A.
Yüksel, ?., 2012. Developing a multi-criteria decision making model for PESTEL analysis. International Journal of Business and Management, 7(24), p.52.
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