Write an essay explaining what the main strategy development tools are and how they are used in business. Your essay must contain a comprehensive discussion of 3 of the following: PESTEL, Five Forces, Resource-Based View, PROFIT, Input/Output, SWOT Analysis (you may include Cross Impact Analysis), Generic Strategies, Ansoff, Ghemawat, with reference to academic journals and practical examples from industry.
In this essay, sub-headings are permitted. Be sure to use paragraphing. Be sure to reference your sources in-text and provide a list of references at the end, all in Harvard style. assignment structure;
One page for your explanation of each model, including the example. Thus, a half page introduction, then 3 pages for the explanation of the 3 models, plus a half page conclusion.
Add a cover page at the front.
Add a Reference List at the end.
STRATEGY DEVELOPMENT TOOLS
Strategic planning is concerned with procedure of documentation and establishment of business activities through assessment of present and future of the business. Strategic planning approach facilitates business enterprises with appropriated place for recording mission, values, vision along with the long terms corporate goals and actions plans for fulfilling them. Enhanced rivalry in business environment has compelled business enterprises engaged in different industry to conduct strategy planning in business for sustaining business in long run thereby competitive edge in the market. The essay shall highlight importance of various tools used for strategy development in business along with the practical business examples for improving the scope of the stupidly. It shall explain and the concept of the different models associated with strategic planning such as the PESTLE model, and Porter’s generic strategies as well as the SWOT analysis, their elements, associated along benefits, limitation of the models with its effect over the different businesses.
The framework helps the business entities to anticipate change within in the external busies environment that is likely to create significant impact upon overall business functions and sustainability in the respective market. The model helps corporate entities to anticipate changes in external environment through consideration of the economic, forces, legal, technological, political and social and environmental forces and determine the opportunities with threats present in the market and able to form proper straggles for adapting the changes, resolving threat by taking advantage of opportunities thereby gain a competitive advantage in the industry. However, the factor the framework is quite time-consuming. The political factors under the model are concerned with different components such as taxation, rules, political structure of economy, FDI arrangement and others. For example, in UK, Brexit referendum is likely to create a negative impact over business productivity of industries especially and the airline industry represented in 25% reduction in UK airline share price. For example, Changes in taxation regulations due to Brexit and rise inflation rate could affect the profitability and productivity Ryanair UK (Investor.ryanair 2020). Subsequently, economic factors are associated with inflation rate, unemployment rate interest rate affecting the operational functions of the business. For example, corona iris outbreak on global context and has resulted in international economic crises stopping tourism activities entirely affecting negatively over hospitality and tourism sector. Reduction in inflation rate or interest rate of an economy and shall affect the operational revenue of businesses. Additionally, social cultural factors representing changes in needs of multicultural population and their impact over business functions. Subsequently technological factors deal with growth in ICT technologies (Vallati, M. and Grassi 2019). Legal and ecological factors deal with the key laws or norms of the business.
SWOT model is one of the most effective tools amongst the various framework applied for strategic planning. The four crucial factors or elements associated the model is strengths, weakness being in internal elements as well as the opportunities and threats being the external and elements of business (Phadermrod et al. 2019). By application of this model, business could be able to have proper determination of their weaknesses and strengths availed in business which could be used for identifying the opportunities and taking advantage of it for addressing threats available in business. However, one of the most crucial drawbacks of the model is that it lacks advanced stages associated with business planning, which is likely to limit growth of business. With the help of the frameworks strategies could be formed effectively for improving strengths, overcoming, and weaknesses, undertaking opportunities and managing external business threats. For example, effective service, quality, strong financial stability and base of employees could be key stress of business entities. However, lack of effective workplace culture, limited resources, vague USP of business could be key weakness of businesses. As instance, strong base of over 43970 skilled employees in Next Plc engaged in retailing business is one of the key strengths of the company that performs effective activities for contributing the organization in effective goals accomplishment. However, strong reliance over UK market could be its weaknesses, which limits its growth. Subsequently, the opportunities associated with rising needs, for Product Company’s media coverage in market and others. For instance, opportunity for New Look to cover developing markets having low labour costs with opportunity of more investments in technologies could benefit the business engaged in retail industry in having large presence in global extent. Ultimately, the threats such as high competitive rivalry in market could affect sustainability of the business functions. It is also likely to disrupt further expansion of business.
Porter’s Generic Strategies
This particular framework is used for selection of the most effective strategy for carrying out business activities and fixing prices in such manner that it maintains the quality of the products and satisfies the customers’ needs as well. This strategy is concerned with three key elements helping business to select most appropriate strategies for business in order to maximise its revenue and image in the market (Omsa et al. 2017). By application of the model in the business organisation could be able to create niche thereby obtain competitive edge in industry. The cost leadership strategy focuses primarily over the attainment of cost advantage in the competitive business environment and through and enjoying economies of scale. By adopting the strategy business entities could be able to carried out production activities over large scale, which is helpful for it to enjoy decrease in per unit cost thereby provide effective quality and low cost services to its customers in order to gain a competitive edge in the market. As an instance, Ryan air UK adoring the strategy has enjoyed ad ranked of top most low cost airline in the European market. Furthermore, the differentiation strategy is helpful for the business entities to improve the quality of its services or product continuously in order to distinguish it from that of its rivals’ service quality. It also helps the business entity to charge premium price range from customers for sale of the product comprising of exclusive quality, which the customers are ready to procure. It is helpful in maximising the level of profits in business along with base and loyalty of customers towards its distinct quality services. For example, differentiation strategy adopted by Apple Inc is helpful for it to create a niche in the competitive IT sector thereby attract its customers to purchase its service even at premium price level (Lopez 2020). Ultimately entities using focus strategy possess excellent quality product at high range covering small segments of customers. For example, adopting focus strategy helps Rolls Royce provide best value to buyers.
In confirmation to the discussion made above, it could be concluded that the key business models named as the PESTLE model, Porter’s generic strategies and the SWOT analysis model as well are helpful for business enterprises engaged in different industries to anticipate changes occurred or that are going to occur in the business environment, risks or opportunities associated with the corporate changes thereby form effective strategic solutions in order to improve the business functions in competitive market for ensuring sustainability. The PESTLE model comprising with various elements or forces such legal, political, environmental, economic technological and social that helps business enterprises anticipate changes in market considering those forces for adapting changes in ensuring successful business innovation. Additionally, SWOT analysis approach contains key factors, application of which helps business entities in recognizing their weaknesses with strengths internally in business along with the opportunities and risks available in marketing affection the operations.