Aston Martin Business Environment Analysis

This report analyzes the business environment of Aston Martin, a British car manufacturer, using PESTLE and SWOT analysis to identify the impact of macro-environmental factors and internal strengths and weaknesses on the company's success. It highlights the importance of understanding the business environment for achieving competitive advantage and sustainable growth.

Assignment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 3.................................................................................................................................................1
P4 Positive and negative impact of macro environment.............................................................1
P5 Internal and external Analysis...............................................................................................2
P6 Interrelation between strengths and weaknesses with external macro factors.......................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business environment is the overall environment of an organisation in which the business
operates. It consists of micro and macro environment which have an impact on the business. In
this report Aston Martin is taken as an organisation, which is a car manufacturing company of
U.K. This report discusses about positive and negative impact of macro environment and
strengths and weaknesses of the organisation.
LO 3
P4 Positive and negative impact of macro environment
In order to identify the positive and negative impact of macro environment on Aston
Martin PESTLE analysis is the best way which includes:
Political factors: Political factors includes the laws, legislation, competition policies, taxation
etc. UK's government is stable and supportive government but still political factors have both
positive and negative impact on Aston Martin for example (Widya Yudha, Tjahjono and Kolios,
2018)
Positive impact- UK government is helping the companies who are weak players in automotive
industry through a program Automotive Assistance Program (AAP)
Negative Impact- Brexit will have negative impact on Aston Martin as it will create problems for
Aston Martin in importing the parts form other European Countries due to Brexit.
Economic Factors: It includes the trade, labor force, wealth, trade, inflation and growth etc.
These Economic factors are very important for the organisation and have a strong impact on
Aston Martin for example
Positive impact- Increasing Liberalisation in the trade policy of UK can be beneficial for Aston
Martin due to liberalisation Aston Martin Lagonda can make investments in those regions which
are off-limits for the company.
Negative Impact- The exchange rates of UK can have a negative impact on the investments plans
of Aston Martin Lagonda not only for the short term but for the long term too ( Baker and Hart,
2016).
Social Factors: Social factors includes the demographics of the population, lifestyle,
backgrounds, age, gender, trends etc which can effect the sale figures of Aston Martin. For
example.
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Positive impact-According to the recent research most of the population in UK are above the age
of 45 and there is an opportunity for Aston Martin to produce the vehicle for small and nuclear
families.
Negative Impact- With the increase in liberalisation in UK is making the health and safety
policies lax, Aston Martin have to stay for negative attitudes as the cost failures are too high in
Britain (Avram, 2017)
Technological Factors: UK is the one of the most innovative car producing company in the
world. So this factor have a huge impact on the organisation for example
Positive impact: Latest technologies based innovations can help Aston Martin to attract the
potential customers as people are switching to those cars which are technically more innovative.
Negative Impact- Technological developments has transformed the customers expectations
therefore Aston Martin have to spend more on making innovations in order to meet and manage
customers expectations.
Legal Factors: There are many legal policies in UK which have a strong impact on the
organisation and it is compulsory for the organisation to meet these factors like fitment of
electronic stability control and also the Tyre pressure monitoring system. Its negative and
positive impacts are
Positive impact: Aston Martin has been successful in protect the copyrights, patents, and other
IRP rights which has made the company more stable as compared to its competitors.
Negative Impact: Data protection laws of UK as impacted privacy issues and intellectual
property rights, and Aston Martin depends upon the mechanism of UK in order to protect against
the data breaches.
Environmental Factors: These factors includes the petrol and gasoline usage and co2 emissions
which have a negative impact on the environment.
Positive impact: Aston Martin has not only adhering the environmental laws but also has been
able to create awareness among the customers which gas added its brand image but has also
become a responsible stakeholder in community (Australia, 2017.).
Negative Impact- If co2 emission rate is too high a company will be charged with tax charges.
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P5 Internal and external Analysis
For conducting the internal and external analysis of the Aston Martin SWOT analysis is
the best way it includes Strengths, weaknesses, opportunities and threats of the organisation.
Swot analysis of Aston Martin is conducted as follows:
Strengths: Aston Martin is considered to have a strong brand image and has high brand equity.
It has got strong engineers team and also a strong car designing team in UK which are assuring
powerful and stylish range of cars for Aston Martin. A company produces the cars which are
luxurious and full innovative technological features (Bhavna, 2017). Strong marketing and
branding through advertisements.
Weaknesses: Aston Martin has got limited product portfolio and has comparatively less market
penetration. Aston Martin is paying extra costs for building new supply chain and logistic
network and is bearing a high cost of replacing existing experts.
Opportunities: Aston Martin have an opportunity to expand its business across various
countries which they have not yet entered. It has also got an opportunity to attract more
customers through competitive pricing policies. Company can also increase its market
penetration through inWidya Yudha, S., Tjahjono, B. and Kolios, A., 2018creased promotion and
extensive distribution.
Threats: Brexit is a threat for Aston Martin as it will create restrictions for making trade with
other European countries. Increase in the cost of fuel is posing another threat for the organisation
due to which company have to make fuel efficient cars. Strict government policies and tax rates
due to Brexit will lower the sales of Aston Martin. It is also facing huge competition from strong
player of automotive industry.
P6 Interrelation between strengths and weaknesses with external macro factors
Strengths and weaknesses Interrelationship with external macro
factors
Strengths
 High brand equity and strong legacy
 Strong engineering and designing team
 Strong branding and marketing through
advertisements
Due to Aston Martin's strong brand equity and
legacy it can easily enter in different markets
across the world. Also with strong engineering
and designing team it would able meet the
expectation of the customers easily also it
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 Luxury and comfort would be able to make innovations in order to
meet the technological challenges. Due Brexit
Aston Martin has the capabilities to penetrate
other countries except European countries due
to strong branding and marketing through
advertisements (Simkin, 2016). Due to its
strengths it can overcome the challenges of
external macro factors like political, social,
technical, economic challenges and can make it
more stable and competitive automotive
company of UK.
Weaknesses
 Limited product portfolio
 less market penetration
 Extra costs of replacing existing experts
 Extra costs in building new supply
chain and logistic network.
It is important for Aston Martin to overcome
its weaknesses in order to minimise the impact
of external macro factors. Due to its limited
portfolio and less market penetration Aston
Martin will not be able to enter in different
market and also have to meet the demands and
expectations of the customer in different
markets. Aston Martin has to build a strong
supply chain network which has been effected
by the alteration in the business model this has
decreased the dealer network. As Aston Martin
depends on the UK robust mechanism of data
protection but company has replaced existing
experts in the organisation which has made its
security factor more vulnerable to breach. So it
is important for the company to minimise its
weaknesses to meet the challenges of external
macro factors.
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CONCLUSION
It can be concluded that with the help of Pestle and swot analysis Aston Martin can meet
the challenges of internal and external factors business environment which can help the company
is gaining the competitive advantage and smooth functioning of business across UK and rest of
the countries.
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REFERENCES
Books and Journals
Australia, M.B., 2017. Change Process.
Avram, V.S., 2017. New Trends and Issues Proceedings on Humanities and Social Sciences.
Baker, M.J. and Hart, S. eds., 2016. The marketing book. Routledge.
Simkin, L., 2016. 11 Segmentation. The Marketing Book, p.271.
Widya Yudha, S., Tjahjono, B. and Kolios, A., 2018. A PESTLE policy mapping and
stakeholder analysis of Indonesia’s fossil fuel energy industry. Energies.11(5). p.1272.
Online
Bhavna, J., 2017. An Analysis Of Internal And External Environmental Factors In The Context
Of UK Automobile Industry. [Online]. Available Through:
<https://www.urbanpro.com/bba-tuition/an-analysis-of-internal-and-external-
environmental>.
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