The use of the PESTLE analysis template in gaining a competitive advantage is essential for profit maximization. PESTLE is an acronym for political, economic, social, technological, legal, and ecological elements affecting business operations. It is a strategic management tool for identifying, analyzing, monitoring and organizing factors that impact the organization. These factors either affect the firm currently or in the future. Other models, such as SWOT analysis and risk assessment, depending on the output from pestle analysis for their input. Incorporating this template in organizations the realization of the importance of competitive advantage. There exist other frameworks of pestle that combine different factors. These are STEEP, PEST, STEER, and STEEPLE.
THE WAYS OF GAINING A COMPETITIVE ADVANTAGE.
Gaining a competitive advantage is beneficial to any organization in several ways. Today’s markets are very competitive; hence going the extra mile to attract and maintain customers is highly crucial. Various strategies aid in differentiating businesses and customer retention. Firstly, creating a culture of recognizing talent among employees. As a result, happy employees lead to satisfied customers. Secondly, identifying the existing niches and addressing them accordingly. The PESTLE analysis template is best suited for this purpose. Thirdly, taking time to understand customer necessary customer preferences and fulfilling them. Moreover, the rewarding of action beneficial to organizational missions and goals is another useful strategy.
THE IMPORTANCE OF COMPETITIVE ADVANTAGE TO ORGANIZATIONS
In the current world, where competition is highly aggressive, gaining a competitive advantage is highly crucial. Competitive advantage is an element that enables firms to outperform other firms. As a result, the firm gains superior value on output. Moreover, the firm gains a high return on investment. The shareholders also get relatively good dividend shares. Competitive advantage is complicated to achieve and also imitate. There exists varying importance of competitive advantage strategies. Firstly, by incorporating cost leadership, companies produce at the lowest by exploiting economies of scale. Moreover, they set selling prices that competitors can’t replicate. Secondly, product differentiation allows the setting of premium prices, thus increasing profitability. Additionally, customer focus increases the customer base by channeling concentration on specific customer needs.