Essay on strategy development tools of pharmaceutical business

Thus, there is a consensus the strategy development phase is of great value and requires considerable attention right from the onset. Successful development of a business strategy depends on the strategy development tool selected and its appropriateness for a given business. There are a variety of business analytical tools which the strategy developers can readily implement to develop sound strategic plans. Selecting appropriate strategy development tools helps the planning team focus only on areas which are important to the business and work towards addressing the specific needs of the business. a) PESTLE Analysis Tool When developing strategic plans, enterprises need to understand the challenges and complexities of their business environment. Dobbs (2014) observes that Porter’s Five Forces model is a critical tool for strategy development since it gives the strategy planners a vantage point from which they can analyze the business environment from different perspectives.

According to Porter’s (1989) model for strategic management, there are five vital sources which significantly affect the strategic planning process: bargaining power of buyers, bargaining power of suppliers, the threat of new entrants, the threat of substitute products as well as the rivalry among the competitors. Strategy planners must be cognizant of these five forces before they fully implement the strategy developed. Porter’s Five Forces tool provides a lens from which the business planners can understand where the business lies based on the present competitiveness to help in determining the future positioning strength. The analysis of the various forces helps strategy planners identify areas of profitability and understand the balance of power to develop a sound strategic plan. The aggregation strategies aim to achieve scope or economies of scale by establishing global or regional efficiencies.

The strategies focus on the standardization of sufficient portions of the value proposition and integrate the development and production processes. Finally, arbitrage involves the exploitation of various economic opportunities in the regional and national markets through expanding existing supply chains to different places. Application of Strategy Development Tools in Pharmaceutical Business The main pharmaceutical firms in Australia are facing the pressure to remain stable while at the same time applying innovative strategies in products and services. According to Rasmussen (2002), there are many dynamic shifts in Australian pharmaceutical industry which have compelled the main players to implement existing and emerging business tools and models to have a comprehensive picture of the business environment. Since the pharmaceutical business is highly dynamic in nature, players in the industry require the use of these tools to understand the market fluctuations and trends better and adapt to them effectively.