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Business Strategy: Porter’s Five Forces

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Added on  2021-02-20

Business Strategy: Porter’s Five Forces

   Added on 2021-02-20

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Business Strategy1
Business Strategy: Porter’s Five Forces_1
Table of ContentsIntroduction .....................................................................................................................................4LO1 Analyze the impact and influence which the macro environment has on an organization andits business strategies.......................................................................................................................5P1 Applying appropriate frameworks analyze the impact and influence of the macroenvironment on a given organization and its strategies...............................................................5M1 Critically analyze the macro environment to determine and inform strategic managementdecisions.......................................................................................................................................7LO2 Assess an organization’s internal environment and capabilities.............................................9P2 Analyze the internal environment and capabilities of a given organization using appropriateframeworks..................................................................................................................................9M2 Critically evaluate the internal environment to assess strengths and weaknesses of anorganization’s internal capabilities, structure and skill set........................................................11LO3 Evaluate and apply the outcomes of an analysis using Porter’s Five Forces model to a givenmarket sector..................................................................................................................................13P3 Applying Porter's Five Forces model evaluates the competitive forces of a given marketsector for an organization...........................................................................................................13M3 Devise appropriate strategies to improve competitive edge and market position based onthe outcomes..............................................................................................................................16LO4 Apply models, theories and concepts to assist with the understanding and interpretation ofstrategic directions available to an organization............................................................................17P4 Applying a range of theories, concepts, and models, interpret and devise strategic planningfor a given organization.............................................................................................................17
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M4 Produce a strategic management plan that has tangible and tactical strategic priorities andobjectives...................................................................................................................................19D1 Critique and interpret information and data applying environmental and competitiveanalysis to produce a set of valid strategic directions, objectives and tactical actions..............20Conclusion.....................................................................................................................................20References......................................................................................................................................213
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Introduction All the external environmental factors are very necessary to be analyzed as because they canhave the strong & the unfavorable impact on all the organizational activities of the businessorganization, "L'Oreal". "L'Oreal" is the most leading cosmetics company in the whole Worldwhich manages the activities related to skin care, hair color, make-up, hair care, sun protection,and many others. The company was founded in the year 1909. The complete assignment includeseffective measures for controlling the internal as well as the external factors of the environment.Effective business strategies & plans are also been determined in order to manage the overallorganizational operations. The complete internal & external analysis is being enhanced in orderto eliminate all the negative consequences of the external environmental factors.
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LO1 Analyze the impact and influence which the macro environment has onan organization and its business strategiesP1 Applying appropriate frameworks analyze the impact and influence of the macroenvironment on a given organization and its strategiesIn order to eliminate the effective concept of "traditional cycle" the complete process of"strategic analysis" is being processed. All the external factors of the environment are beingincluded in the macro environment and are completely uncontrollable. These factors mayinfluence the organizational activities of "L'Oreal" in a negative manner. Hence, it is necessary toanalyze all of them in an effective & efficient manner.Following are the external factors which are to be analyzed properly before conducting theresearch on environmental analysis:-Political: The Government policies in the country of France affect the rules & policies ofthe business organization of "L'Oreal" in Paris. The import policies also play a major rolein the effective growth & success of "L'Oreal" of the regions. The company does notindulge in the animal tests.Economic: It includes the prices of innovative products, the exchange rates of the state inwhich the company is established. The rate of GDP is being considered as the mostessential factor for all the branded luxurious products of "L'Oreal". The higher number ofpeople is interested in purchasing L'Oreal products (Birnleitner, 2013). The middle classpeople can not afford the costly products of “L’Oreal” because of which the level ofprofitability of “L’Oreal” gets hampered.Social: The modern groups of people are very much interested in buying the fashionableproducts of "L'Oreal". The company utilizes the innovative technologies & methods inmanufacturing & selling its branded products which attracts a large number of peopletowards the company. Some of the ethical & social issues negatively affect the operationsof "L'Oreal". The products of “L’Oreal” have the unique & innovative capabilities to5
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attract all the social groups & people of the country. They possess the unique importanceof the beauty.Technological: The technological methods & attractive innovative products have raisedup the level of sales of the L’Oreal products, as because the company implements the“contemporary trends” & the higher level of “innovation”. Therefore, the key factor forthe increased growth & success of “L’Oreal” is its innovative branded luxuriousproducts. The active ingredients are being included by “L’Oreal” research team. Theyhave the high technological innovation. Also they implement the feature of 3D hairanimation.Legal: The Company needs to analyze & effectively study about the different legalaspects which can affect the operations of "L'Oreal" in both the positive & negativemanner. The other reason behind this is that the company is mainly the brand for upper &middle-class groups, therefore, it needs to consider all the legal aspects of the economy(Birnleitner, 2013).Environmental: The leading brand of "L'Oreal" need to follow up & also support thedifferent environmental norms, campaigns & the programs in all over the World. It is oneof the most "leading international brands". The innovative trends of the company can alsobe affected by future policies related to the environment. “L’Oreal” uses 34% of its rawmaterials from the plants for their products of shampoo which have the grat impact on thebiodiversity. Apart from this, the products of “L’Oreal” include the sustainable sources &renewable raw materials. Stakeholder Analysis:Stakeholders are the personnel, that are being considered to be a crucial part of thecompany owing to their interest and power to influence the decisions taken regarding theoperations and functioning of entity. It is essential for every business enterprise to carry out astakeholder analysis in order to determine the impact of various stakeholder groups upon thedecisions and strategies devise by management. In this regard, Stakeholder Analysis Matrixserves to be an effective strategic tool that segments the groups as per their power as well as
Business Strategy: Porter’s Five Forces_6

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