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Implementing Strategy

The five competitive forces are frameworks that help organizations develop strategies. They include the bargaining power of buyers and suppliers, threat of new entrants, competitive rivalry, and threat of substitutes. PESTLE analysis and scenario analysis are also essential models for formulating and implementing strategy. PESTLE helps analyze political, economic, social, technological, legal, and environmental factors. Scenario analysis examines possible future events and their impact. Blue strategies target markets with low competition, while red strategies focus on competition and ensuring the survival of products in crowded markets.

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29 views5 pages

Implementing Strategy

The five competitive forces are frameworks that help organizations develop strategies. They include the bargaining power of buyers and suppliers, threat of new entrants, competitive rivalry, and threat of substitutes. PESTLE analysis and scenario analysis are also essential models for formulating and implementing strategy. PESTLE helps analyze political, economic, social, technological, legal, and environmental factors. Scenario analysis examines possible future events and their impact. Blue strategies target markets with low competition, while red strategies focus on competition and ensuring the survival of products in crowded markets.

Uploaded by

pmthogo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Implementing Strategy

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Implementing Strategy

What are the five competitive forces and why are they central in formulating and

implementing a strategy?

The five competitive forces are virtual frameworks that aid an organization in developing

its strategy. The five competitive forces include; bargaining power of buyers, threat of new

market entrants, competitive rivalry, bargaining power of buyers, and threat of substitute ( ). The

five competitive forces are important in formulation and implementation of a strategy. Jointly,

the five forces determine how profitable an organization or industry can be because they

determine the investment required in the industry, the cost to be borne, and the charges to be

charged. The five forces aid managers to create the competitive structure of the organization

before making strategic decisions. In addition, the five competitive forces aid managers to access

the industry’s attractiveness and also help them to pinpoint the areas in the strategy to improve

on profitability.

What is a blue strategy and why thinking in terms of blue strategy is essential in

formulating and implementing a strategy and when?

A blue strategy is used to refer to a type of market for a product where there is less

competition or no competition. This strategy is crucial in formulating and implementing a

strategy because it revolves around searching for a business where there is no pricing pressure

and where few firms operate. The blue strategy is applicable across businesses or sectors because

it is not limited. The blue strategy is essential in formulating and implementing a strategy when

there is limited room for growth and there is a potential for higher profits as a result of low

competition. In addition, the blue strategy is used when the industry aims at capturing new
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demand by introducing a product that has superior features and hence making competition

irrelevant.

What is a red strategy and how can it be relevant in formulating and implementing a

strategy?

In contrast to the blue strategy, the red strategy mainly focuses on competition. The

strategy is essential in the formulation and implementation of a strategy because it is a plan of

action that aims at ensuring the survival of a product in a competitive market. In addition, a red

strategy ensures that the organization comes up with a strategy that makes it favorable in an

already existing marketplace. The strategy also ensures that organizations are able to sustain

themselves in a competitive marketplace because it ensures they focus on creating advantages

over competition. The red strategy aids organizations to compete fiercely as the markets get

more crowded. The red strategy uncovers risks, level of competition, and opportunities for profit-

making because there is stiff competition. In addition, the strategy aids in creating disturbance in

the market hence aiding companies to attract new customers.

What is PESTLE and Scenario analysis and why are they essential models in formulating

and implementing strategy?

PESTLE analysis refers to a tool that aids in gaining an industry’s macro environment

picture. PESTLE means “Political, Economic, Social, Technological, and Environmental

factors”. PESTLE analysis is an essential model in formulating and implementing strategy

because it aids a company in creating an impression of the factors that may influence a new

business. In addition, PESTLE analysis evaluates the business environment in which a company

operates hence making sure the firm makes informed decisions before launching their products.
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On the other hand, Scenario analysis refers to a process used in examining possible events in the

future that may have an impact on a business. It ensures that a company is able to predict the

outcomes of its operations in the future.


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References

Johnson, G., Whittington, R., Regner, P., Angwin, D., & Scholes, K. (2020). Exploring Strategy.

Pearson UK.

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