Strategic Planning and External Analysis Tools Essay

1725 Words May 13th, 2013 7 Pages
Section 1: Summary of key concepts and ideas from the lectures, tutorials and readings (500 words)

Strategy is a roadmap designed to route the direction of the organization towards achieving its goals. Through an understanding of the organization’s vision and mission and the matching of resources and skills to the environment, the company can formulate and implement strategic plans to achieve long-term sustainable competitive advantage, meet the needs of consumers and satisfy stakeholder’s expectations (Johnson, Scholes and Whittington 2004).

Before formulating a strategy, an organization has to gauge its current position in the market using strategic analysis. This involves the use of internal and external analysis tools to gain
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Many major companies are creating their own individual systems to compete for a share of the market. One example is the Isis system by the major telecommunication companies (Johnson 2012). Finally, there is a high threat of substitute as consumers might find it more convenient to simply use cash or swipe their plastic card as compared to the new mobile payment method (Passy 2012). However, one market grabbing force is the low bargaining power of suppliers as the merchants supplying the service would be subjected to lower transaction costs under the PayPal system as compared to their counterparts (Hamblen 2012). Nevertheless, the bargaining power of customers in conjunction to new entrants and substitutes remains high, as there are just too many choices to choose from. Therefore, PayPal and Discover are in an unfavorable position.

Welch’s (2012) article talks about how Campbell is innovating its soup products to meet the taste of a new generation. Through the use of the SWOT analysis (Andrews 1971), majority of factors prove positive. With the threat of a declining domestic soup market and difference in preference of a younger generation, it presents Campbell with an opportunity to innovate and differentiate its products in order to achieve market growth (Schultz 2012). Relying on its strengths to introduce new
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