Use of Strategic Management Tools-Free-Samples-Myassignmenthelp

Question: Discuss about the Strategic Management tools and its use in the business process. Answer: Introduction The aim of this essay is to help the reader to gain knowledge about the strategic management tools and its use in the business process. Every business needs to use strategies to initiate activities that help them to grow in the external environment. The below mentioned is a detailed analysis of the PESTEL analysis, Porters Five Forces and Resource Based view analysis on an organization. More details about these tools are discussed below: Strategic development tools The strategic development tools are those tools that are used by companies to evaluate the market conditions and initiate activities in such a way that they can easily gain reputation in the target market. Use of these tools enhances the scope of the company to initiate successful activities in front of the target audience. Further, it should be noted that the external market is becoming tough day by day due to which the companies now days faces difficulties to sustain their growth in the environment. Thus, these tools help them to initiate sustainable competitive edge in the market (Moutinho, and Phillips 2018). PESTEL The PESTEL analysis refers to the strategic development tool that helps the business to evaluate the external market conditions and then enact their actions accordingly. The full form of this abbreviation is Political, Economic, Social, Technological, Environmental, and Legal analysis. The political analysis talks about the governmental features that affect the growth of the company in an environment. Economic talks about the GDP growth, inflation, employment rate etc. aspects of the country that directly affects the working of an organization. The Social aspects explain the culture of the country and the behavior of people living that country towards specific products and services. Technological aspects explain the extent to which technology is present, used and appreciated in the country. Lastly, the legal aspects explain the legal rules and regulations present in the country (Lancaster, and Massingham 2017). Further it should be noted that this aspects gives a full country analysis that helps companies in initiating their expansion decision. For instance, as the company PepsiCo initiated the PESTEL analysis to further understand the various feature about the country and relate it to their product so as to deliver an output to the customers present in their environment. This analysis successfully helped the company to increase their market share and profit margin by successfully understanding the features of the market in which they are present (Abushova, Burova, and Suloeva 2016). Further, it also helps the company in expanding their scope of activities. Like, a technological organization expands their business in the technological, so they should expand their activities in the market of Japan. As the market of Japan use high technology in their business that will help the company to easily procure raw material and use it in their activities as well (Manyaeva, Piskunov, and Fomin 2016). Thus, in this way this tool is used by business. Porter five forces Porters five forces is the industry analysis that talks about the industry trend and activities that can help the marketer to evaluate the growth of their company easily. The porter five forces includes bargaining power of buyer, bargaining power of suppliers, threat of substitutes, industry rivalry, threat from entrants. Bargaining power of buyer explains the power that is held by the buyers present in the market. If the buyers of the company have the advantage to mold the face of the industry according to their interest then it is regarded that they have high power in hand (David, David, and David 2017). Similarly, if the companies present in the market have the ability to change the market conditions then it should be noted that they high power in hand. Like in the case of airlines industry, the Boeing and Airbus are the only two suppliers present in the market. Thus, it should be noted that these suppliers have power in hand as they can change the contract with any company accord ing to their will and the company cannot deny (Suglobov, and Semenova 2017). Threat of substitutes refers to the threat related to the products and services of the company present in the industry. Like, there is presence of high degree of substitutes as in the airlines industry as these services can be substituted cheap services of roadways and railways. Industry rivalry talks about the level of competition present in the industry and the threat of entrants explains the market entry and exit process, capital investments etc. aspects of the industry. If there is easy market entry and exit and low capital investment then there would be high threat from entrants present in the market. Like, in the case of clothing industry, as there is low capital investment so there would high threat from entrants present in the industry (Blackwell, and Eppler 2014). Resource Based View The resource based view talks about the ability of the company to gain competitive advantage in the target market. The RBV talks about the type of resources that can be tangible or intangible. Tangible resources refer to the resources than can be seen or touched by people whereas intangible resources refer to the resources that cannot be seen or touched by people. Tangible resources are machineries; land etc. and intangible resources is goodwill, patent, trademark etc. After distributing the resources into tangible and intangible the company considers these resources to be heterogeneous and immobile. These are the two assumptions on which the activities of the company are based (Hoskisson, Gambeta, Green, and Li 2017). Heterogeneous refers to the assumption under which the company believes that the resources that they have are different and cannot be procured by any other organization in the same way. This will help the company to gain competitive advantage in the market. Like, the c ompany PG used this strategy to earn reputation in the market. The goodwill of the company helped them to sell the products with razor and blade strategy but this strategy cannot be used by all organizations (Gupta,Tan, Ee, and Phang 2018). Source: (Jurevicius 2013) Further, immobile assumption says that the resources of one organization cannot move to other organization and provide similar advantage to them as well. Immobility reduces replication and increases the competitive advantage. Further the VRIO analysis talks about the value, rarity, imitable and organized aspect of the resources and capabilities of the company that helps them to grow. The resources of the company should deliver values in the products served in the market. These resources should also be rare in nature. They should get replicated easily by other competitive organization (Nason, and Wiklund 2018). Further, the resources should be costly enough to imitate by organization competitor organizations. And lastly, these resources should be organized by the management in such a way they capture the value and serve it to customers present in the market. With the presence of these abilities in the resources, a company can easily gain sustainable competitive advantage in the market . Conclusion Thus, in the limelight of above mentioned events it should be noted that these tools have become an important part of the life cycle of an organization as they supports the decision making process of an organization and help them to grow in the changing environment as well. Thus, it should be noted that the tools like PESTEL, Porter and Resource Based view helps a business in initiating their activities and growing successfully. References Abushova, E., Burova, E. and Suloeva, S., 2016. Strategic analysis in telecommunication project management system. InInternet of Things, Smart Spaces, and Next Generation Networks and Systems(pp. 76-84). Springer, Cham. Blackwell, R. and Eppler, D., 2014. An Approach to Strategic Situation Analysis: Using Models as Analytical Tools.Journal of Global Business Management,10(1), p.80. David, M.E., David, F.R. and David, F.R., 2017. The quantitative strategic planning matrix: a new marketing tool.Journal of Strategic Marketing,25(4), pp.342-352. Gupta, G., Tan, K.T.L., Ee, Y.S. and Phang, C.S.C., 2018. Resource-Based View of Information Systems: Sustainable and Transient Competitive Advantage Perspectives.Australasian Journal of Information Systems,22. Hoskisson, R.E., Gambeta, E., Green, C.D. and Li, T., 2017. Is my firm-specific investment protected? Overcoming the stakeholder investment dilemma in the resource based view.Academy of Management Review, (ja). Jurevicius, O., 2013. Resource Based View. Viewed on 15 April 2018 from https://www.strategicmanagementinsight.com/topics/resource-based-view.html Lancaster, G. and Massingham, L., 2017. The development of a strategic approach to marketing: its culture; internal macro-and external micro-environmental issues. InEssentials of Marketing Management(pp. 11-42). Routledge. 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