Analysis of Internal Environment and Capabilities

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1. Application of frameworks for analysing influences and impacts that macro environment
have on business and strategies....................................................................................................1
LO 2.................................................................................................................................................5
P2, Analysis of internal environment addition to capabilities with suitable framework.............5
LO3................................................................................................................................................10
P3. Application of Porter's Five forces model for evaluating competitive market forces.........10
LO 4...............................................................................................................................................13
P4. Application of concepts and models as well as devising strategic plan for organisation....13
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Business strategy is said to set of actions assisting managers to attain particular objectives
(Agarwal, 2014). It is a master plan implemented by institutional managers for carry forwarding
operations, achieving desired ends as well as securing position in competitive market. Business
strategies are designed for meeting challenges, achieving effectiveness, gaining command on
critical situations, mobilising resources, directing efforts, perceiving as well as utilising
opportunities together with securing advantageous positions. It is considered as backbone of any
enterprise as it acts as roadmap to lead towards desired objectives. The present report covers
application of frameworks to analyse the impacts as well as influence of macro environment of
entity and its strategies. The report further includes analyse of internal environment as well as
capabilities of selected firm with appropriate frameworks. Further, Porters-five-forces model is
applied for evaluating competitive forces with market. At last, range of theories and models are
applied for selected organisation.
To understand the aspects of Business strategy, Aston martin is selected. The enterprise
was established in 1913 and has headquarters at England, united Kingdom (Aston Martin. 2019.).
It is one of the large enterprise which is independent manufacturer of grand tourers as well as
luxury sports car. The company provided employment to more than 3400 individuals. The vision
of entity is The company has mission of simply becoming best in every area of the business.
Objectives of the entity is to design luxurious products with modern elegance as well as style.
From the annual reports of 2017, it is said that the company has sold around 5117 sports cars
across world (Sales figures of Aston martin. 2019). The company has generated revenue of
£1,096.5 million and operating income of £146.9 million in the year 2018.
LO 1
P1. Application of frameworks for analysing influences and impacts that macro environment
have on business and strategies.
Introduction: Business strategy can be defined as competitive moves or actions that are
used to attracts customers, strengthening the business performance and compete successful in
order to make higher profits. The main object of business strategy is to develop the business and
gain competitive advantages. The task will cover some points such as PESTLE framework that
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affects the businesses, Porter's Diamond Model to select the best strategy and stake holder
analysis that affects external stakeholders.
Business strategy: Business strategy is used to know the summary that how a company
will achieve its goals, meet with customer's satisfactions and sustain the competitive advantages
by spouting a business.
According to Alfred D Chandler, (1962) author of Strategy and Structure, pp13
“Strategy is the finding of basic long term goals and objectives of an industry and the
adoption of courses of action and proper allocation of resources for the purpose of accomplishing
goals.”
According to William F Glueck, (1972) author of An invitation of strategic management
Strategy is a unified, comprehensive and integrated plan which is design to assure the
common objectives of an organisation are achieved (Burlton, 2015).
Difference between both
Definition provided by Alfred D Chandler says that strategy is used to allocate the proper
resources, take corrective actions in order to determine the long term goals of organisation.
Where as William F Glueck says strategy is integrated plan which is prepared to attain the
business goals and objectives.
Similarities
According to both author strategy is a wider term used to focus on organisational
objectives whether short term or long term. It helps to attain the higher profits by comparing with
other organisation and develop the plans accordingly.
PESTLE analysis: This analysis is used to evaluate the external environment in order to
run a business. The PESTLE analysis of Aston Martin helps to know the which factor can affect
the organisation in UK. The details of analysis in context to UK country given as:
Political: This factor states that how UK's government intervenes in economy and affect
the business. It can include political stability, foreign trade policy, labour law, trade restrictions
and so on which impacts on Aston Martin such as:
Positive impact: Political stability of UK is beneficial for Aston Martin as it can run its
business by following stable government policy that helps to operate a business successfully.
Moreover, growth of such organisation can be sustain in UK because there is no need to accept
the changes which can divert the business activities.
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Negative impact: Changes in foreign trade policy in UK country affects the negatively.
This may impact on Aston Martin or manufacturing industry in UK as their performance
performance effected negatively because company has to understand new foreign trade policy
that can reduce the productivity of organisation as well as need to provide the training to its staff.
Economical: This factor involves interest rates, economic growth, exchange rate,
disposable income of consumers and interest rates in UK country. This factor may impact on
Aston Martin organisation such as:
Positive impact: This factor may impacts positively such as low interest rate helps to
increase the production in UK because companies can get loan at low interest rate and
manufacture the products effectively (Cavusgil and et. al., 2014).
Negative impact: High inflation rate can affects the UK and Aston Martin negatively as it
has to pay high prices in order to buy raw material and other parts which reduces the productivity
and well as number of customers because it increases the prices of sports cars which customers
do not agree to pay.
Social: This factor is related to society and changing demand of customers that need to
follow by organisation for growing their business. It covers population growth, heath
consciousness, age distribution, change in demand of customers and so on within the UK, whose
are impacting on Aston Martin in UK such as:
Positive impact: Population growth such as birth rate in UK is a good indicator for Aston
Martin as it develop the future demand towards its products which affects business positively.
Negative impact: Different attitude and demand of people may reduce the sale of Aston
Martin in case of not analysing attitude and behaviour of people who are in UK country.
Technological: This is related with technological landscape changes in UK that can
affect the business performance. It includes new technology for producing goods and services,
distributing goods and services in new way and communicating with target market that impacts
on business:
Positive impact: To bring new technology by understanding customer's wants can be
beneficial for Aston Martin as it can crack the competition and helps to grow the UK's economy.
Negative impact: If country and management of Aston Martin are not up to date then
other organisation can grab the opportunity which can effect business performance negatively.
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Legal: It includes health and safety rules, consumer rights and other laws in UK country
that affects organisation such as:
Positive impact: By following health and safety rules and minimum wages act Aston
Martin can retain the employees for long term in UK.
Negative impact: If UK's organisation not follows legal rules and legislation then
employees can leave the organisation which impacts negatively.
Environmental: This factor is related with environmental factor in UK such as carbon
effect, pollution etc. which can impact on Aston Martin such as:
Positive impact: By following environment safety law and reducing the carbon emission
it can grow good environmental effect in UK country and helps business organisation to continue
their business positively.
Negative impact: In case of not following environmental law it can be out from business
industry.
Porter Diamond Model: This model is used by Aston Martin in order to gain
competitive advantages that are as defined:
Factor condition: It consider different types of resources which may or may not present
in nation (Cavusgil and et. al., 2014). In UK, there are all resources such as human resources,
capital, natural, infrastructure and knowledge that helps Aston Martin to compare with
organisation and gain competitive advantages.
Demand condition: It consider market size, growth rate and market sophistication that
helps to run a business successfully. The market size and growth rate of UK is high that helps
Aston Martin to run a business by innovating ideas and get benefits. This helps to run a business
successfully.
Relating and supporting industry: Aston Martin manufacture cars in UK that can share
access to wind tunnel which helps to create competitive advantages. This used different types of
technology to produce the products and which can attracts customers more.
Firm strategy, structure and rivalry: It is related with UK's strategy, structure and
competitors that helps Aston Martin to eliminate the competitors by developing attractive
strategy and structure in order to gain competitive advantages. In business industry, Aston
Martin has many competitor such as Tesla, Toyota, Bentley Motors etc. who are running their
business in competitive environment.
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