Comprehensive Essay On Strategy Development Tools.

Discuss About The Journal of Quality in Maintenance Engineering.

There are several strategy development tools that are used by the organization mainly for the analysis of the environment in which the business process operates. For the analysis of internal environment, SWOT framework is used and for the analysis of external environment, PESTLE framework is used. The analysis of a business competition is done by Porter's five forces framework. The strategizing of the available resources for the firm's advantage is analyzed using a framework called Resource-based view. In this essay, a comprehensive discussion will be made on the above-mentioned strategy tools.

SWOT framework is the most common tool used across by several organizations. It is a strategic tool which helps us in analyzing the internal as well as the external environment of an organization which comprises of 4 factors which are Strength, Weakness, Opportunities, and Threats. The strengths and weakness of a company define the internal environment of a company like effective leadership skills, employee motivation, organization policies etc (Bell and Rochford, 2016). The opportunities and threats define the external environment of a company such as the threat from the rival companies, governmental policies, technological advancement etc. By using this framework, the organization can develop strategies that assist them to gain a competitive advantage over other firms (Gupta and Mishra, 2016).  

Example of Amazon can be taken wherein the organization has its presence at a global level and is a leading e-commerce company. Amazon company's notable strengths are that it's a well know and popular brand with presence across all the borders, but the weakness with this giant e-commerce company is the issue it faces in the delivery of the products which results in customer dissatisfaction. The bright opportunity that Amazon has it is expansion in Asian markets and several other economies. The threat that Amazon faces is with the presence of other local rival companies like Alibaba in China and Flipkart in India.

The PESTLE analysis framework is used to analyze the external factors that affect the market situation and the profits of an organization. The external factors comprise of political, economic, social, technological, environmental, and legal. All the aspects are very important for a company and the business it might get in. This framework not only defines what a company should do but also gives an account of the organization's goals and motives. It is very critical for a company to have an in-depth understanding of each of its terms to conduct the analysis (Shabanova et al., 2015).

An example of Amazon

Apple Inc. is one of the most reputable and recognizable brands of electronic products. The company has extended its branch to a range of different products like smartphones, tablets, software services, applications etc.

Due to the presence of this company at the global level, it faces political unrest in China as it is completely dependent on China due to its low labor cost. The main operation of Apple is in the USA and the economy of the country favors the company's profit. The company has become a symbol of social status among the people due to its uniqueness and innovation which has made the customer base broader.  The stakes are high when it comes to innovation and technological advancement, which the company surely prides itself (Camisón and Villar-López, 2014). The company has been able to penetrate the business with its unique innovation and design. It has faced several legal issues too, due to its software and music which has made them suffer on the grounds of piracy and litigation. There are also various environmental factors that increase the carbon footprints of the organization due to the discarding of electronics products.

It is a framework which is very simple yet powerful tool that helps in analyzing the competition prevailing in a business environment. It proper evaluation assists in reading the market condition before entering into it and also helps in developing strategies that focus on the efficiency of the organization's process. This theory educates us with the five forces which may affect an organization which comprises of bargaining power of suppliers, bargaining power of buyers, the threat of substitutes, the threat of new entrants and competitive rivalry (E. Dobbs, 2014).

The proper evaluation of all these factors helps in developing strategies that can help them beat the competition level in the industry. The supplier power is basically the ability to drive up the price of products. The buyer power is the ability of a buyer to bring down the prices. Competitive rivalry is the intense competition prevailing in the market due to the competitors. The threat of new entrants is the obstacles that a new business or an organization faces while entering a market. Lastly, the threat of substitute is referred to the similar products which may shift the inclination of customers to the other products (Madsen and Walker, 2015).

This multinational company food and beverage company has emerged as one of the largest food company and offers a variety of products. The company has now established itself as one of the most trusted brands so the threat of new entrants is quite temperate. The competitive rivalry is very low since the brand has made its presence all across the globe so it is difficult for the competitors to get close to Nestle. The quality of products that the company delivers has made the bargaining power of buyers more strong which makes it difficult for the substitute products to make its mark. Nestle has its strong networks with its suppliers around the globe as it's important for the effective reach of products to every customer. This makes the bargaining power of suppliers more strong. There is a wide range of substitute products available but due to the innovation in the products of Nestle, the threat to substitute goods has been reduced.

PESTLE analysis

This model describes the utilization of the resources to achieve superior performance in the business. It is believed that an organization should firstly focus on the internal sources to gain a competitive advantage rather than the business environment. Using the VRIO model, the organization focuses on the resources and the necessary data is collected to analyze. VRIO is classified as valuable, rare, inimitable and organized. The resources that qualify and stands-by the VRIO model are the resources that gain help the company to achieve a competitive advantage (Grant, 2016).

Resources limited to a specific company are qualified as rare. The resources are said to be valuable if they help in providing valuable services to the customers. It should be inimitable so that there is no substitute for the same. Lastly, if the resource is not organized enough to provide the advantage to the company it is of no use (Salavou, 2015).

Coca-Cola is one of the largest beverage companies in the world with its name spread across all economies. Using the RBV model, the organization merely focuses on gaining a competitive advantage. By proper utilization of the available resources the company has now grown and acquired other name brands such as minute maid, Thums Up and became more valuable. Due to its rare product, it has maintained itself in the market. There are only a a few competitors in this industry which becomes difficult to imitate the product. The marketing skills, brand image, the distribution network is well organized that provides them a competitive advantage over others (Nason and Wiklund, 2018).

Conclusion

It has been concluded that strategic development tools are important frameworks that can ensure the long run of a particular company in the competitive environment.

References

Bell, G.G. and Rochford, L., 2016. Rediscovering SWOT’s integrative nature: A new understanding of an old framework. The International Journal of Management Education, 14(3), pp.310-326.

Camisón, C. and Villar-López, A., 2014. Organizational innovation as an enabler of technological innovation capabilities and firm performance. Journal of business research, 67(1), pp.2891-2902.

2014. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), pp.32-45.

Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Gupta, G. and Mishra, R.P., 2016. A SWOT analysis of reliability centered maintenance framework. Journal of Quality in Maintenance Engineering, 22(2), pp.130-145.

Madsen, T.L. and Walker, G., 2015. Modern competitive strategy. McGraw Hill.

Nason, R.S. and Wiklund, J., 2018. An assessment of resource-based theorizing on firm growth and suggestions for the future. Journal of Management, 44(1), pp.32-60.

Porter five force analysis., 2018. edrawsoft. [Online]. Available at: https://www.edrawsoft.com/five-forces-chart.php.[Accessed on 19 Aug, 2018].

Salavou, H.E., 2015. Competitive strategies and their shift to the future. European Business Review, 27(1), pp.80-99.

Shabanova, L.B., Ismagilova, G.N., Salimov, L.N. and Akhmadeev, M.G., 2015. PEST-Analysis and SWOT-Analysis as the most important tools to strengthen the competitive advantages of commercial enterprises. Mediterranean Journal of Social Sciences, 6(3), p.705.