Business Strategy: Impact of Macro-Environment on Organisation

This document discusses the impact of macro-environment on an organisation's business strategy and how it influences the internal environment and capabilities. It also explores the use of Porter's Five Forces model in developing effective strategies. The case study focuses on Tesco, a multinational groceries retailer, and its strategies to overcome the effects of Covid-19 on the economy.

Business
Strategy

Table of Contents
Introduction:.....................................................................................................................................1
LO1:.................................................................................................................................................1
P1: Apply appropriate framework that impact and influence the macro-environment on the
organisation:...........................................................................................................................1
M1: Critically analyse the macro environment to determine and inform the strategic
management............................................................................................................................3
LO2:.................................................................................................................................................3
P2: Examine the internal environment and capabilities of the given organisation:.............3
M2: Critically examine internal factor of the organisation:..................................................5
LO3:.................................................................................................................................................6
P3: Apply the porters five forces model to the organisation:...............................................6
M3: Examine the strategies to take competitive edge in the markets:...................................7
LO 4:................................................................................................................................................7
P4: Apply models and theories to understand the strategies available to the organisation:...7
M4: Develop the strategic management plan:........................................................................8
Conclusion:....................................................................................................................................10
References:.....................................................................................................................................11

Introduction:
Business strategy is a process which involves various course of action which helps the
organisation to achieve the desire levels of outcomes from to time. It is a master plan which
provide a successful strategies for the organisation so that they can take the competitive
advantage in the target market places. It provide a way to organization which helps them to
perform better in its operational management activities which leads to competed the task in eth
most effective and efficient manners. In the anther words, it is sketch for the image which
organisation wants to achieve in the long period of time. Under this report, the TESCO
company, which is multinational groceries stores offering various items in the markets is chosen
to examine the see how strategies helps to overcome the affects of Covid -19 and its effects on
the economy. Further their will be discussion, on the SWOT and PESTLE which helps in making
affective strategies. (Sanaei. and Sobhani, 2018(
LO1:
P1: Apply appropriate framework that impact and influence the macro-environment on the
organisation:
The TESCO organisation is a British groceries retailers stores having the headquarters in the
England, United Kingdom offering clothes, house ware items , electronic devices and food items
of its customer. It the third largest retailer in the world and servers the various countries such as
Asia, Europe and Thailand and various another country as wells. It was founded in the 1919 and
provide supermarket and hypermarket items in the target markets places.
Mission and vision: the Tesco organisation main focus is to capture the market at the global
level by providing the product and services to its customer from time to time and can earn the
profits in the present as well as in coming years. The vision of the organisation is to capture the
larger market by offering the goods which can satisfies the needs and wants of the customer .
The current condition at the global is the affects of Covid -19 virus that have affected the whole
economy and slow down the growth rate of the world economy. Wieland, Hartmann, and
(Vargo, , 2017)
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Objectives: the main objective of the TESCO organisation is to product good quality of
commodities to its target customer and make the profits out of business. But due the present
condition of the world because of the COvid-19 , the company objectives is to give necessary
product such as food items and sanitizer and another hygiene items which will helps to overcome
such adverse condition.( Teece, 2018)
Macro-environment: These are the factors which are present in the external environment and
have a impact on the performances of the organisation in the present and in the long period. Due
the corona virus world is getting affected as country are losing its citizen in large numbers which
disturb the whole economy as industries and another work places are shut down for the a month
and which can have reduce the growth of the economy.
Political factors:
Here all the those things are included such as interest rates, tax rates, legal legislation and
unemployment rates and various another’s items which affects the operational activities of the
organisation in the market places and which have a impact on the productivity of the company.
The Tesco company operates in 12 different country which have different work environment and
have different on the business activities and profits margin. Due to Covid -19 , it has lead to
instability in the economy which will have side effects on productivity of the economy.
Economic factors:
under this situation all those factors are included like inflation rates , interest rates and another
factors that affects the business operations in the markets places. The Tesco organisation
operates it business at global levels but is dependent on the Uk market as ut holds around 30%
market share. It has internationalization and diversification which helps them to get success at
the global markets. (Sanaei,. and Sobhani,2018)
Social factors:
the customer taste and assumption, their belief and thought process are taken into consideration
while forming the strategies of the organisation so that they are able to make the best effective
policies for the company to make profits in market. Due to the Covid -19, the Tesco is offering
product and services to its customer to that they can survive this condition in better ways.
Technology factors:
Under this condition, the factors like advance technology are use in making the strategies for
the company which will improve their performance in the management levels. Tesco uses
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technology to provide the online shopping websites for its customer so that they can use such
goods and satisfy their needs and wants.
Environment factors: the government nowadays, giving the pressure to address and
contribute to the better environment so that they can enough resource for coming generation.
The Tesco are make its customer to purchase online website so that they less use of fuel and
recycle of plastic bags.( Perey, R.and Edwards,2018)
Legal factors: here all the government policies are include which impact the performance of the
Tesco Company in the market places. The rights of the worker are protected by the government
by making proper polices which are tom be followed by the company to have good employees
in their management.
The Covid- 19, has affected the business activities of various organisation as there is completed
lockdown in the country , which helps from spreading in the local network and it has also slow
down the economy which will lead to recession in coming yeras.
M1: Critically analyse the macro environment to determine and inform the strategic
management.
There are positive and negative impact of macro-environment on the productivity of the
organisation at the market places. The positive impact is that they helps in making best use of
raw material present in the environment and gives the product and services which customer are
looking for . the negative impact is that it has to fulfil the legal requirement which needs lot of
money and time to implanted such policies in their work environment. The macro –environment
factors helps in making the effective strategies which helps them achieve their desire levels of
objective within the tome period. (Pollard, and Morales 2015)
LO2:
P2: Examine the internal environment and capabilities of the given organisation:
The internal environment are those factors which are present inside the organisation work places
and influences the performance of the organisation at the target market . these factors have
impact on the daily activities of the company which affects the management to achieve their
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goals and objectives in the most effective manners. The Tesco analyse its internal factors so
that they can use the opportunities in best possible manners and reduces the impact of the
threads present in the environment and are able to expand their business at international
levels. .These internal analysis will helps the organisation to fight back the Covid-19 and reduce
their impact on the performance of the organisation and the whole market
Strengths: here all the strength of the organisation are stated which helps the Tesco to
performance better in the competitive market places. The manager tiers to match their strengths
with the opportunities present in the work environment so that they can earn the more profits in
the organisation and make effective strategies for the company to cope up with the Covid-19
condition in the market . some of the points which shows the strengths are discussion as below:
 It has world class services for its customer which helps it to remain number one in the
market. (Revathi, and Aithal, 2018. )
 It is third largest retailer in the UK economy.
 The company has lot of property under its name in the market places.
 The organisation are able to build the brand image in the international levels.
 It provide the customized product and services to its customer from time to time.
Weakness: it is part of the internally part of organisation which shows the limitation of the
organisation at the work places and that affects the productivity of the organisation in the
long term. here the focus of the organisation is on converting their weakens into the
strength which will improve their performance at the target market places and the
company are able to make profits in market .some of the weakness of the Tesco are stated
as below:
 The subsidiaries of the organisation are not working properly in some of the areas
which affects the performance of the company.
 The competitive environment have damage the profits margin in the markets.
 The organisation has nor conducted good research before opening the stores whic
have results in lower profits .
 Sometimes the customer does not have enough disposable income to purchase the
product and services.
Opportunities: under this condition, the company tries to find out the opportunists present in
the environment and make best use of it so that organsaition are able to achieve
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their goals in the most effective manners. The company has a opportunities to
expand their business to different location which helps them to earn more profits
in the long years. Some of the opportunities of the tesco are stated as below:
 Their can make align with another brands present in the target markets and attract
more customer from time to time by offering different kinds of product and services.
 The company can go for the joint ventures with another company so that
they can get enough market and funds to start their business .
 The organisation can expand their business by going online website
from where customer can shop the products.
Threads: under this heading, the threads which can cause the damage to the organisation
are stated and these threads are present in the environment in which they performance
their activities. This part includes all those factors that can harm and have adverse impact
on the business operation which can delay the performance of the organisation in the
target market places. Few of the threads are stated as below:
 The economic recession and Covid-19 has damage the performance of the
organisation in the target market places, which reduces the market share .
 The organisation also receives the pressure from the all around the world which forces
company to lower the prices of the product and services to take the competitive
advantage in the market
 Due to the Covid-19, the employees may be losing their jobs due to rescission in the
market (Lipitakis,. and Phillips,, 2016)
M2: Critically examine internal factor of the organisation:
The critical evaluation of internal environment on the organisation can be viewed as positive
impact and negative impact on the performances of the organisation in the target market places.
The affirmative impact of SWOT is that organisation are able make efficient use of viable
resources which helps them to expand their management activities at the global levels and
enhance their profit at the markets by attaching more customers. The negative impact is that
organisation are not prepared for the unknown threads which can damage their productivity and
brand image in the target market places. The organisation are tiring their reduce the impact of
the Covid-19 by offering good quality of sanitizer and various hygiene product and food that can
improve the immune system of the people. ( Medarac, and Vignali, 2016)
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LO3:
P3: Apply the porters five forces model to the organisation:
The organisation uses the porters five forces model to make the profitable strategies which will
helps the organisation to accomplished the desire levels of outcomes in the most effective
manners. This model helps the organisation shape their industry in the target market so that they
can make profits in the long run. The five forces are stated as follows:
Competition in industry: here under this condition, the competition present in the markets that
cutting out the business of the organisation are included under this situation. There are many
competitors present in the market offering similar kind of product and services to the customers
which tesco is giving to its customer which further make the Tesco less powerful in such kind of
market . during the Covid-19, the company are offering the hygienic product to its customer.
(Moita, and de Carvalho., 2015)
Potential of new entrants:
The company also gets affected by the new organisation trying to enter into existing market as
they can take over the existing market in the lesser time period and with the less amount of
money. the industry that have strong barriers to enter into market are good for the existing
organisation.
Power of the suppliers: under this situation, there are few numbers of suppliers in the market
which are offering good quality of product and service so that power goes in the hands of the
supplier to charge higher prices for their product and services. the customer are left with lesser
choices in the market places.
Power of the buyers: the customer are able to barge the prices of goods and services with the
seller as there are large numbers of suppliers and few numbers of buyers in the markets so that
company have to lowers the prices of goods another wise the customer will switch to different
goods. (Spasojevic,, 2018. )
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Threats of substitute products: under this condition, the customer are able to find the
substitute product against the organisation product and services which are available at the lower
prices. if company does not changes their prices then customer will switch to another brands.
M3: Examine the strategies to take competitive edge in the markets:
The balanced scorecard is a strategy used by the manager to keep the record of what activities
are going in the organisation and how the staff are performing their task so that organisation
are able to take the competitive advantages in the target market places. The balanced scorecard
act as tool used to measure the performance of the organisation and see what improvement can
be taken to enhance their productivity . the porters five forces is also act as tools to make the
effective strategies for the organisation so that objective can be achieved in most
profitable ,manners.
LO 4:
P4: Apply models and theories to understand the strategies available to the organisation:
To have effective strategies the Tesco organisation use porters generic strategies and bowman’s
model to develop the strategies management plans so that they are able to achieve their
objectives in the most productivity manners within the shortest period of time.
Porter’s generic strategies: it is a framework which is used by the company to develop the
strategies plans to take the competitive advantages in the market places.
Cost leadership: here, the company focus on being the low cost producer of goods and services
to attach more customers to its business and helps the organisation to accomplished the goals in
effective manners and beat the market with its goods and services:
Differentiation: it is growth strategies, which helps the organisation to provide different kinds of
product and services to its customer so that they can capture the market places, the tesco can
launch new product which can helps the fight with the Covid -19 virus in the market .
Cost focus: The organisation can use this strategies to make changes in its pricing strategies
like lowering the prices of the product and services so that customer can purchase the hygienic
product like sanitizer and tissue paper and mask which will protect the customer to get affected
by the virus.
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Differentiation focus: under this strategies company is focus on providing new product and
services to the existing as well as to the new customer so that they can expand their business at
the international levels. To cause the Covid-19, the company must introduce the new product
which will helps the customer to stay fit.
Bowman’s extended model:
This model helps in making the effective strategies for the organisation which are stated as
follows:
Low price and value added : the company tries to keep the price of the good as low so that
more customer can purchase them.
Low price: the organisation use this strategies to lower their prices for the commodities to take
competitive advantages
Hybrid: under this strategies, the company offers goods at high quality at less prices as it will
helps the customer to fight back to Covid-19.
Differentiation: the organisation provide different goods at various prices to attach the
customer.
Focused differentiation: this strategy is used by the brands which focus on providing luxury
goods.
Monopoly pricing: the organisation places themselves as monopoly leader in the market places.
Loss of market share: here, the company are not able to give goods and services to its
customer.
M4: Develop the strategic management plan:
Strategies development plan: it is blueprint of the organisation where mission and vision ,
objective and aims of the company are stated , and are made understood by the shareholder,
stakeholders and another investor of the company so that they all work for the achieving the
common goals within the set time period. The Tesco organisation focus on providing the plan
which helps them to achieve the objectives in the most effective manners. The manager of the
organisation are able to increase the sales and profits in the market place
Aim: the main aim of the organisation is to offers goods at the affordable prices so that
customer can satisfies their needs and wants fro time to time.
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Objective: here the objective of the organisation is to increase their market share in the target
market.
Mission and vision: the organisation main focus is to provide good quality of goods and
services at reasonable prices so that customer are satisfied by the services of the company.
Strategies: it is called as plan of action which needs to be executed to accomplished the
objectives of the company in the market so that they can earn the profits which is essential part
of any organsaition. Some of the strategies which company can adopt to make revenues :
Market analysis: by using this strategies , the organisation are able to analysis the target market
which can offers the goods according to the needs and wants of the customer . the market
research is conducted which helps in understanding the taste and preferences of the customer so
that company can offers such product and make profits in the market place.
STP: it is strategies which helps in identifying the right customer, different kinds of good, and
target markets so that company can make effective strategies which will helps them to be ,more
productivity .
Segmentation: under this strategy, the organisation tries to divide the whole market into
different segments which helps to them to target the small numbers of customer at a time on the
basis of geographic, demographic basis.
Targeting: here, the organisation target its customer on the basis of taste and preferences, ages,
gender, living standards and etc, so that it become easier for the customer and company to
purchase such goods.
Positioning: under this strategies , the company tries to places its product and services at the
right places so that customer can make effective use of goods and services . the organisation can
also uses pricing strategies , various tools and technique which will helps in placing the product
in the market.
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Conclusion:
According to the above report, it can be concluded that business strategies are necessary for the
successful organisation as it helps the company to make the effective strategies which helps them
to expand and grow their business at the international levels by offering good quality of product
and services to the target audiences. The organisation can do PESTLE analysis which will helps
the organisation to study the macro environment and make best use available resources and
opportunities which are present in the work environment of the company. The organisation can
use porters five force models to reduce the impact of the Covid-19 by providing substitute goods
and company can make sound strategies management plan for the organisation so that goals and
objective can be achieved in productivity manners.
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