Hi6006 Competitive Strategy For Aged Assessment Answers
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Answer:
Introduction
In this paper, the discussion will be made on development tools. The development tools that will be discussed in this paper are Porter five force analysis and Pestle analysis. It has been seen that these tools help the company to identify the environment so that it can be simple to accomplish goals and objectives in a proper manner. To achieve competitive advantage the company has to focus on the development tools so that the operations can take place in a smooth manner. It is essential for the company to consider these tools as it helps to complete the activities in the right direction. There are two companies which are selected for the paper first is Estia which is and second is Abbott which is a pharmaceutical company. The proper discussion will be made by considering these two companies for this paper.
It is important for the company to focus on these development tools as through this actual position of the company can be evaluated. By focusing on these development tools companies will be able to analyze the actual position which can help to compete with the other competitors prevailing in the market.
Estia (Aged Care Company)
Porter Five force Model
This is one of the development tools which are taken into consideration so that proper focus can be given to competitive forces so that growth and profits can be earned. This tool gives emphasis on the overall activities of the company.
Threats of new entrants
There are many new companies who are entering the market by offering the same services. It can be analyzed that when new companies enter into the market then the negative impact is seen on growth. The pressure which company has to face is related to low price strategy. The level of threat is high in this sector (Grant, 2016).
Bargaining power of buyers
Bargaining power of buyer is high in this sector as they get attracted towards the best and fewer prices offered by the company. It can be seen that if the company is giving effective services then it can be simple to attain a large market share and also through this goodwill can be maintained. The bargaining power of buyers can be managed if the proper customer base is maintained.
Bargaining power of suppliers
The companies who are in the healthcare sector can easily avail raw materials from their suppliers and also the suppliers who are powerful in this sector can focus on the power of negotiation. It is essential to create dedicated suppliers whose profits depend on the company. The example can be taken of Wal Mart and Nike who have less bargaining power.
Threat of substitutes
The substitution rate is high in this sector as there are companies who are offering the same type of services in the marker. The threat can be reduced by emphasizing on a service-oriented firm. The company emphasizes on the need of the customers rather than focusing on what the customer wants to purchase. The switching cost of consumers can assist in managing the threat of substitutes (Rothaermel, 2016).
Rivalry among the competitors
Rivalry in this sector is high so it is important for the company to reduce the prices of the products. It has been seen that a company can manage the competition level by creating sustainable differentiation and also by creating the scale that can be completed in a proper manner. Collaboration can also be the factor that can help to enhance the market share rather than giving competition in the small market. Through this activities can be conducted in a proper manner and by reducing the level of competition (Porter and Heppelmann, 2014).
Abbott (Pharmaceutical Company)
Pestle Analysis
Political factor
It has been analyzed that public expenditure on health is less if the comparison is made with other countries and also the pharmaceutical company is more dominant in the private sector. There are facilities of the government which help to attract foreign investors by focusing on policies of investor-friendly and tax incentives. The government focuses on offering the drugs by focusing on telemedicine in Australia. The emphasis of the government is also on boosting good partnerships with the private and public sector. The medical tourism is also promoted by the government (Ho, 2014).
Economic factor
The expenditure related to health care can be availed from the patient just due to high income. It has been seen that the merger of pharmaceutical companies has projected the stock value growth of 10.5% in the period 2003 to 2010. The spending behavior of the public in Abbott will enhance as there are many cases of rising and lowering the income (Moutinho and Phillips, 2018).
Social-cultural factor
The main focus of the company is on offering good services to people so that their health can be maintained. The rate of population in Australia is high so there is a high consumption of medicines. The increase in the overall literacy rate has brought improvisation in the healthcare sector.
Technological environment
The company is offering cost competitive medical treatment so that the satisfaction level of the people can be satisfied. It is important for the company to focus on speeding up the technology. If there is a slow speed of technology then it can take more time and of technology is fast then profits can be increased. In Abbott, the technological impact is analyzed on product offering and also on diffusion related to technology (Jarzabkowski and Kaplan, 2015).
Legal environment
The government focuses on employment law, data protection and also on safety law so that people can easily avail the services. It has been seen that these laws are legal and it is considered by the company so that growth can be achieved.
Environmental factor
To operate the activities in the market, the company focuses on various factors like weather, climate, and change. It is important to focus on proper rules so that operations can take place in the right direction. It has been analyzed that environmental factor has been an important aspect in the present scenario. The health issues are raised because of the air pollution and water pollution. So, the chance to earn a profit is more and also the focus is on managing the environment.
Conclusion
Therefore, by analyzing the paper it has been concluded that this development plays a great role in accomplishing the goals and objectives of the company. It is important for the company to focus on these tools so that accurate decision can be made. Without these development tools, the company does not forecast their future. Forecasting of the future can be done with the help of these tools. It is essential to emphasize proper growth so that the company can easily achieve high profits. Through these tools, it can be simple for the company to analyze the competition level in the market and also it will help to consider the strategies which will be beneficial for the growth of the company. These tools have an important role in identifying the weakness and strength present in the business environment. Without proper investigation, it is not simple for the company to focus on the right direction and consider proper operations for the company. By taking into consideration these tools it can be easy for the company to achieve positive results in an effective manner.
References
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), pp.6478-6492.
Jarzabkowski, P. and Kaplan, S., 2015. Strategy tools?in?use: A framework for understanding “technologies of rationality” in practice. Strategic Management Journal, 36(4), pp.537-558.
Moutinho, L. and Phillips, P., 2018. Strategic analysis. In Contemporary Issues in Strategic Management (pp. 46-79). Routledge.
Porter five force analysis., 2018. edrawsoft. [Online]. Available at: https://www.edrawsoft.com/five-forces-chart.php.[Accessed on 8 August, 2018].
Porter, M.E. and Heppelmann, J.E., 2014. How smart, connected products are transforming competition. Harvard Business Review, 92(11), pp.64-88.
Rothaermel, F.T., 2016. Competitive advantage in technology intensive industries. In Technological innovation: Generating economic results (pp. 233-256). Emerald Group Publishing Limited.
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