Business Strategy: Assessment of Macro and Micro Environment

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Assessment of macro environment........................................................................................1
TASK 2............................................................................................................................................3
P2 Analysis of micro environment and capabilities....................................................................3
TASK 3............................................................................................................................................5
P3 Application of Porter five forces model.................................................................................5
TASK 4............................................................................................................................................7
P4 Application of theory to devise strategic management plan..................................................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy refers to set of activities planned by the management professional for
attainment of objective of expansion of business. In this report, business strategy has been
formulated for Klarna Bank. Klarna is a Swedish company that renders banking solutions to the
citizens. The report cover the assessment of macro environment of the country and how it affect
the growth of the company. Further the report include the analysis of internal environment and
capabilities of the given company. The report also include the application of Porter's five forces
model to evaluate the attractiveness of the industry. The report also comprise the application of
suitable theory for the formulation strategic management plan of the given organisation (Akter,
and et. al., 2016).
TASK 1
P1 Assessment of macro environment
PESTLE Analysis
The study of macro environment is more important to analysis because company are
more vulnerable to factors that arise outside the organisation. Macro environment are not in the
control of organisation but company is required to take measure to get rid of hazard persist in the
country. To analyse the external factors PESTLE analysis is used. PESTLE analysis cover all the
aspect of macro environment. PESTLE is an acronym for political, economical, social,
technological, legal and environmental. It define how favourable are the external factors for the
company. PESTLE analysis of United Kingdom with reference to Klarna bank is given below:-
Political Factors: United Kingdom is enjoying stability in its political structure. There is
less intervention of government in the businesses of the nation. UK comes in the list of powerful
countries of the world. Citizens of the choose a new prime minister periodically. Prime minister
serves the country for five years. Prime minister possess the supreme dominance over the
country. Addition to political stability, nation maintains a peaceful relations with other powerful
and developed countries mainly United States of America. Overall political environment is
appropriate for growth of Klarna bank (Higgins, Omer, and Phillips, 2015).
Economical factors: United Kingdom follows a mixed economy approach than means
economy is a blend of capitalism and socialism. Country enjoys advantages of both capitalist and
socialism economy however in mixed economy nation also bear the disadvantages of both the
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economies. UK is a wealthy country. Citizens have no dearth of money. Inflation rate of the
country is not very high therefore loan are cheap and attainment of financial goal is also very
easy. UK is a centre of attraction for many foreign direct investors. There is lot of foreign direct
investment in the several industries of the country. Hence economical factors are favourable for
the country.
Social Factors: UK is a multi-cultural marketplace. There is a existence many kinds of
culture in the country. Moral freedom in UK is high. Citizens gives more importance to good
moral values. Population growth had been increased in recent years. There is a significant
increase in population density of the country. Age of population is also increasing as average age
in UK reach to 40 (Some parts of UK ageing twice as fast as others, new research finds. 2020).
Citizens of UK are highly educated. Increment in mean age of population is not a major concern
for the company. Hence social factors are not creating any barrier for the company.
Technological Factors: United Kingdom is known to be a technological hub of the
world. Highly advanced technology persist in the country. Internet is also penetrating in the
country at extreme rate. Companies are continuously bringing innovation in their goods and
services in order to delight customers. Nation had faced boom of technological advancement in
recent years. Organisations are investing in research and development to discover new
technology that can beat rivals. Technological advancement is extremely beneficial for growth of
the Klarna bank (Woerner, and Wixom, 2015).
Legal Factors: Law and order are made for welfare of the society. Legal landscape of the
country is inclined towards safety and welfare of the people. Law is equal for all and there is a
provision of strict punishment to offenders. Labour laws and employees legislations are enforced
by the government to safeguard employees from exploitation. Company has to adhere the laws
and legislation. Company cannot extend working hours of the company to make extra profit.
Firm also required to render one day rest in a week to all the employees (Martinez-Simarro,
Devece, and Llopis-Albert, 2015).
Environmental Factors: Government are becoming more concerned towards
preservation of environment. Government is making laws and taking initiatives to encourage
firms to adopt sustainable development practices. As Klarna is a banking solution company
therefore there is no harm environment by the organisation.
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