Competition has always stayed as the core to success as well as failure of an organization belonging from an industry. The organizations through their very own strategy tend to achieve their desired positions within their industries and competitive advantage is the ability of the organizations for gaining their seeking position via the attributes and available resources (Wagner and Hollenbeck 2014). However, each and every organization faces threats and challenges from their rival companies in the market. Therefore, it is very important for each and every company to have its own competitive strategy in order to make sure that they are obtaining continuous returns for longer period of time. This paper shall elaborate on the competitive analysis of the three companies- Japara aged care, CostaExchange limited and Apotex pharmaceuticals. It will shed light on the business analysis these three companies based on the three strategic analysis tools- SWOT, PESTLE and Porter’s five forces.
The SWOT analysis refers to the process of strategic planning, which is used for helping a firm identify its own internal strengths and weaknesses and for assessing its external threats and opportunities present for it (Xingang, Jiaoli and Bei 2013). It is basically aimed for specifying the objectives of the business ventures and that of the projects in order to identify the internal and external factors which are favorable for achieving the desired goals and objectives. It greatly helps in minimizing the effect of the weaknesses in a business by maximizing the strengths of it (Yuan 2013). It is intended especially to specify the external and internal factors that are required to take into consideration for attaining the objectives of the business. Different companies belonging from different industries has difference their SWOTs (Aithal 2016). For example, if taking into account the aged care companies like Japara aged care, in Australia, the strengths of it include Strong free cash flow, superb performance, reliable supplier and a successful track record of product innovation. On the other hand, the strengths of Pharmaceuticals Company like Apotex are that it offers a long array of services to the customers including retail services, business advisory services and wholesale product delivery. With the same CostaExchange agriculture company has a huge number of landmark banners and products available to serve its customers (Wright and Lyrene 2016). Secondly, the weakness of the aged care company is that its total percentage of contribution, profitability ratio and its financial planning is very low. It also has a very short success outside its main business. In case of the Apotex pharmaceuticals, the supposed accounting discrepancies as well as the sigma takeover dispute and controversies have influences the company in great ways. Furthermore, the opportunities that are present for the aged care is that there is a good scope of growth in the field of personal care in the Australian region. With the same, in Australia are emerging of new markets, low rate of inflation, and emergence of new technologies, introducing latest taxation policy, different trends in the behavior of consumers and attaining more customers from online platforms. Apparently, the threats include increase in trend of isolation in the economical environment of Australia that has the possibility of affecting the global sale market. Along with this the growing power of the Australian local distributors and the seasonality in customer demand are also acting as a major threats now-a-days.
The term PESTLE is an acronym for Political, Economic, Socio-Cultural, Technological, Legal and Environmental (Talamini et al. 2013). PESTLE analysis presents a complete composition of the macro-environmental factors, which are used in the scanning of environmental components of strategic management. The PESTLE analysis is a strategic tool that is used to understand the directions for the operations, growth and decline of market as well as the present business position. Political factors of the PESTLE are generally the way to assess how a country’s government can intercede in the economy (George et al., 2015). Secondly, the economical factors consist of the economic growth, rates of interests and everything else related to the economy. Thirdly, the social factors refer to the increase or decrease in health consciousness among the customers, the cultural aspects, population rates, safety issues and age distribution. Fourthly, technological factors include aspects like R&D activities, automation, as well as the rate of technological changes (Shin 2014). Moreover, the last two factors of legal and environmental is all about the changes in laws and regulations within a country as well as change in climate that can affect the overall business of a company in great terms. These factors affect the firms more or less in similar ways. They are nearly same for each and every organization. While considering these three companies, the political factors that can affect them are level of corruption, taxation; employee benefits favored trading partners, and product labeling. Pricing regulations is also one of the major political factors that have an impact on the business of these organizations. The economic factors include interest and inflation rates, discretionary income, labor costs, economic growth, level of education, unemployment, as well as the different stages of business cycle like recovery, recession and prosperity. Furthermore, the socio-cultural factors consist of the attitudes, culture such as gender roles, class structure, demographics, education standard etc (Lawah and Zanna 2013). On the other hand, the technological factors also affect these three companies by affecting their cost structure, value chain and product offering. Moreover, the changes in the laws and regulations, introduction of new governmental policies such as employment law, health and safety laws greatly affect the businesses in every industry. Lastly, climate change, waste management, water and air pollution, weather and sustaining renewable energy etc all falls under the aspects of environmental factors.
Finally, Porter’s five forces is another set of tools that is used to assess the competition of a particular business in the market (E. Dobbs 2014). It was introduced by Michael Porter and is divided into horizontal and vertical forces. The horizontal forces include the competitive rivalry, threat of substitutes and threats of new entrants, while the vertical forces include the bargaining power of the customers and that of the buyers (Yunna and Yisheng 2014). As competition is increasing rapidly in the current business environment, the rivalry among the players is thus getting more intense. As a result, in order to sustain, the companies has to decrease down its product and service prices, which will in turn decrease the profitability of the organizations. For example, the Japara aged care, CostaExchange limited and Apotex pharmaceuticals are currently operating in a very competitive industries and this competition is taking the toll on the long term profitability of the organizations. The threats of new entrants puts pressure on these companies by reducing costs, providing value proposition to the customers and by lowering down the pricing strategy (Porter and Heppelmann 2014). However, it also brings in innovation as well. With the same, the bargaining power of the suppliers has the tendency to drive down the margins that these organizations could have earned. The customers also tend to buy best things in lowest price possible. This puts a great pressure on each of these companies’ profit margins.
From the above discussion it can be concluded that SWOT, PESTLE and Porter’s Five Forces are the three different set of business tools that are used in order to analyze and help the companies in improving their competitive positions in the business environment. SWOT helps the companies to focus on their critical factors by ignoring the ones that are less important. Pestle identifies how the macro environmental factors can affect the competitive standing of a business. Porter’s five forces, on the other hand gives a clear view on where the power lies in competitive situation.
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