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Importance of Strategic Development Plan

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

Organization’s growth rate depends on various factors such as availability of market, availability of stiff competitors, availability of raw materials, proper management, and many other factors (Chungyalpa & Bura 2015, p.76). However, a good strategic development plan is a roadmap that drives all the factors of production to maximum utilization. The development strategy is achieved after the analysis of the elements: a process called strategy analysis. Strategy is defined as the described way and how a particular objective is to be achieved, thus strategic analysis refers to the process of researching a specific environment of business to formulate a strategy (Al-Tabbaa, Leach & March 2014, p.660).  The strategy analysis is performed through various tools such as PESTEL, 5F, RBV, PROFIT, I/O, SWOT, and CIA and every organization employs tools that are relevant to the situation.  The paper explores specifically the usage of SWOT, PESTEL, and 5F giving practical examples with the Rhodes Island Automobile Distribution Freight Infrastructure.

Every business success lies in sound decisions made by the management, and the choices are always guided by the outcome of SWOT analysis (Ahmadi, Dileepan, & Wheatley 2016, p.3).  SWOT stands for strength, weakness, opportunities, and threats, thus refers to the process of evaluating the strengths, weakness and new ideas that the company should explore as it combats possible threats. William D. Book, Edmund P. Learned, Kenneth Andrews, and C.Ronald Christensen developed the SWOT analysis tool in 1960s. The analysis helps in mapping the future of the business, during exploring of new initiatives, revamping of internal policies or even during altering of policies in the middle of executions.


The first two components of SWOT analysis refers to the internal factors such as the financial, physical ,human ,natural and current resources. Strengths are the current factors that have made the organization to outstand the competitors in the market, for example, strong brand name while Weakness refers to the factors that hinder the development of the company such as inadequate capital (Al-Araki 2016, p.618). The last two components refer to the external factors that affect every facet of a company such as marketing trends, demographic suppliers, political environment and many others. The opportunities refer to the available opportunities for expansion, for example, the increasing demand of the specific product, while the threats refer to the risk factors that hinder the development of the organizations for example entry of a competitor.

SWOT Analysis

The first step of using SWOT analysis is the collection and evaluation of the fundamental data such as population, demographics, technology, and many others. The collected data is grouped accordingly under the four elements: the strengths, weakness, opportunity, and threats. After that, a matrix for the business alternatives are put under considerations, and then the proper decision is made. For example, the SWOT analysis of a Rhodes Island automobile freight infrastructure that supports the national and international distribution of automobiles will be as follows:

Internal factors    

Strengths

weaknesses

Being located at the Davisville port, thereby no maintenance tax is paid amounting to averagely $ 35 per imported automobile unlike other distributors such as Autoparks Wheel & Tyre Ltd. Moravian Motors and many others that are located on the taxable lands (Nakwa & Zawadie 2012, p.271).

The availability of the national market allows the industry to distribute cars all over the united states commanding about 3.5% of the U.S  gross domestic product hence outdoing others(Ho & Mauro 2016, p.526-532).

The portside land of the Davisville is uncongested hence providing a larger space for the importation and exportation of cars.    Availability of other ports within such as Baltimore offers new entry and exits of cars within and outside the country.

The Davisville port is much far away from the traditional care centers in the US that are responsible for manufacturing new cars, hence making it difficult to export new cars like the Baltimore.

External factors  

Opportunity

     Threats

The expected shortage of truck driver may result in longer distance cargoes that might entail the rail transportation of automobiles; thereby Davisville rate of usage will increase.

The increasing car production in Mexico probably might increase the importation of cars through the sea and Davisville port.    The production facilities in Mexico tend to serve the US distribution operations directly through rail, which pose threats to the operations of Davisville.

Biggest used -car importers such as Nigeria tend to reduce the amount of importation as some companies establish car assembly plants in Africa making it easy and economical to import from African countries. 

PESTEL analysis is a strategic tool used to analyze business planning and understand the external forces that drive up a business (Balasopoulou et al. 2016, p.1). These forces include trade barriers, demographic changes, tax changes, and many others. The word PESTEL represents Political, Economic, Social, Technological, Legal, and Environmental. A strategic business developer needs to understand these external environmental factors to maximize opportunities and limit the threats to an organization.

Political factors

The political stability of the United Kingdom offered favorable for the launch of and development of the Rhodes Island automobile distribution. According to the World Bank report, in the United Kingdom, it only takes 13 days to establish a business. The united kingdom government also offered subsidies to the RI automobile for the growth.

Economic factors    

According to the report by the world bank UK ranks as the first in Europe and sixth in the world as the best place to start a business, and these are influenced by the economic stability of the country that offers a ready market for products(Rugraff & Sass 2016, p.1408)

Social factors

United Kingdom have large population favored by the international inflow that created a large market and different car tastes, favoring the development of the company.

Technological factors

The international technological advancement such as the user of the internet have enabled the importation and exportation of cars through the Davisville port very easy as many of orders are placed through emails (Determann & Perens 2017, 472). The importation process has been favored with the development of Airbus and large ships that are capable of carrying cars.

Legal factors

The legal factors established by the United Kingdom and other neighboring countries allowed importation and exportation of goods facilitated the car business.

The competition law established in the United Kingdom allowed the entry of other competitors such as Moravian Motors. The fair competition pushed the Rhodes Island to improve on the fashion, quality, and quantity of cars being imported and exported in respect to the customers’ needs. These improved qualities enabled the business to retain   and attract more customers.

The business location at the port Davisville provide a large space for loading and offloading of the cars from the ships. The large space ensures that no injury occurs during the process.

Environmental factors

The environmental concerns for pure atmosphere, low fuel consumption and less noise producing cars shapes the nature of the business. Rhodes Island automobile therefore, changed the nature of the cars being imported to conform to the environmental requirements placed by the government.

The 5 F refers to the Five Forces Model, developed by Michael Porter to analyze the industry and the risks (Yetkin 2013, p.463). The model comprises of five elements that are bargaining power of buyers, suppliers, entry of potential entrants, competition from established entrants, and substitutes. The bargaining power of buyers of the United Kingdom increased as a result of the increased number of automobile distributors such as the Autopark Wheel & Tyres. The high bargaining power shaped the behavior of the business to captures the possible number of customers. Substitutes are the alternative products offered by other companies to replace the existing product. The threat of substitute to the automobile distribution business is moderate as customers differ in taste-making RI to withstand. Rivalry among the existing firms such as Baltimore port that also distribute automobiles affects the operations of the Rhodes Island as parts of the market are accessed by the competitors. The availability of the potential entrants into the business of automobile distribution tends to reduce the market share of the Rhodes Island. Finally, buyers purchasing power affects the quantity of demand.

Conclusion

There are numerous strategy development tools, and the application of each depends on the organization and the objective of the analysis. However, the use of more than one tool such as SWOT and PEST provides better information’s, as the latter focus more on the environmental factors than the former.

List of References

Ahmadi, M, Dileepan, P, & Wheatley, K 2016, 'A SWOT analysis of big data', Journal Of Education For Business, 91, 5, pp. 1-6, Academic Search Premier, EBSCOhost, viewed 14 April 2018.

Al-Araki, M 2013, 'SWOT analysis revisited through PEAK-framework', Journal Of Intelligent & Fuzzy Systems, 25, 3, pp. 615-625, Academic Search Premier, EBSCOhost, viewed 14 April 2018.

AL-Tabbaa, O, Leach, D, & March, J 2014, 'Collaboration Between Nonprofit and Business Sectors: A Framework to Guide Strategy Development for Nonprofit Organizations', Voluntas: International Journal Of Voluntary & Nonprofit Organizations, 25, 3, pp. 657-678, Academic Search Premier, EBSCOhost, viewed 14 April 2018.

Balasopoulou, A, Latsou, D, Kousoulakou, H, Michael, N, Kenzie, D, Mair, A, Vontetsianos, T, & Geitona, M 2016, 'The use of PESTEL as a change management tool to inform change management of polypharmacy and adherence within SIMPATHY program', InternationalJournal Of Integrated Care (IJIC), 16, 6, pp. 1-2, Academic Search Premier, EBSCOhost, viewed 14 April 2018

Chungyalpa, W, & Bora, B 2015, 'Towards Conceptualizing Business Strategies', International Journal Of Multidisciplinary Approach & Studies, 2, 1, pp. 73-83, Academic Search Premier, EBSCOhost, viewed 14 April 2018.

Determann, L, & Perens, B 2017, 'OPEN CARS', Berkeley Technology Law Journal, 32, 2, pp. 915-988, Academic Search Premier, EBSCOhost, viewed 14 April 2018.

Ho, G, & Mauro, P 2016, 'Growth-Now and Forever?', IMF Economic Review, 64, 3, pp. 526-547, Academic Search Premier, EBSCOhost, viewed 14 April 2018.

Nakwa, K, & Zawdie, G 2012, 'The role of innovation intermediaries in promoting the triple helix system in MNC-dominated industries in Thailand: the case of hard disk drive and automotive sectors', International Journal Of Technology Management & Sustainable Development, 11, 3, pp. 265-283, Academic Search Premier, EBSCOhost, viewed 14 April 2018.

Rugraff, E, & Sass, M 2016, 'How Did the Automotive Component Suppliers Cope with the Economic Crisis in Hungary?', Europe-Asia Studies, 68, 8, pp. 1396-1420, Academic Search Premier, EBSCOhost, viewed 14 April 2018.

Yetkin, U 2013, 'Revealing the Change in the Maritime Security Environment through Porter’s Five Forces Analysis', Defence Studies, 13, 4, pp. 458-484, Academic Search Premier, EBSCOhost, viewed 14 April 2018.

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My Assignment Help. (2019). SWOT, PESTEL, And 5F Analysis For Rhodes Island Automobile Distribution Freight Infrastructure Essay.. Retrieved from https://myassignmenthelp.com/free-samples/strategy-development-tools.

"SWOT, PESTEL, And 5F Analysis For Rhodes Island Automobile Distribution Freight Infrastructure Essay.." My Assignment Help, 2019, https://myassignmenthelp.com/free-samples/strategy-development-tools.

My Assignment Help (2019) SWOT, PESTEL, And 5F Analysis For Rhodes Island Automobile Distribution Freight Infrastructure Essay. [Online]. Available from: https://myassignmenthelp.com/free-samples/strategy-development-tools
[Accessed 20 May 2024].

My Assignment Help. 'SWOT, PESTEL, And 5F Analysis For Rhodes Island Automobile Distribution Freight Infrastructure Essay.' (My Assignment Help, 2019) <https://myassignmenthelp.com/free-samples/strategy-development-tools> accessed 20 May 2024.

My Assignment Help. SWOT, PESTEL, And 5F Analysis For Rhodes Island Automobile Distribution Freight Infrastructure Essay. [Internet]. My Assignment Help. 2019 [cited 20 May 2024]. Available from: https://myassignmenthelp.com/free-samples/strategy-development-tools.

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