Business Strategy: Analysis of Macro and Internal Environment of Aviva Plc

Business Strategy

INTRODUCTION
Business Strategy is a form of decision and action which is taken to achieve the goals and
objectives of Organisation. It is a set of goals, plans and action that helps to determine how
business can compete in the competitive market. The main motive of business strategy is to
establish direction, measure success, avoid competitive convergence and increase the satisfaction
level of business (Yuan and et. al., 2020). Business strategy is important for company as it helps
in creating vision and provides direction in order to accomplish the goals and objectives of
business. There are mainly three types of business strategy such as cost leadership strategy,
differentiation, focused cost leadership strategy, focused differentiation strategy and integrated
cost leadership (Ghemawat, 2016). The project is based on business strategy in which analysis of
macro and internal environment is conducted by applying various models. It also includes the
porter’s five forces models in order to evaluate the competitive forces and various other models
are also applied for interpretating and devising the strategic planning of company. For
accomplishing this project the chosen organisation is Aviva Plc, it is a British multinational
company which provides various services including life insurance, general insurance and
pension. Headquarter of Organisation is in London, England and was founded in 2000. Aviva Plc
was formed by merger of two British insurance companies, CGU plc and Norwich Union.
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Macro Environment can influence the profitability and growth of company, it is important
for the organisation to identify the factors that could affect the business operation and
productivity. In order to identify the macro environmental factors, pestle analysis is the suitable
tool that helps in determining the factors and shapes the macro business environment.
Political Factors:
Political factor affects the profitability and long term sustainability of Organisation.
Aviva Plc must identify the political environment of country in which they are operating
business. There are various political factors that influence the operational activities of business
such as political stability, changing policies, governance system, trade restriction and many
others (Um and et. al., 2018). The high political stability in country determines the friendly and
stable business environment that helps in predicating market growth trends. Aviva Plc has
located its business in different countries due to which they have to face political tension. It is

necessary to identify the political issues of different countries as it can influence the growth
opportunities available to Aviva Plc.
Economical Factors:
Through understanding the economic factors of country, Aviva Plc can assess the growth
trajectory of industry and business. There are various economic factors to understand such as
inflation, labor market conditions, financial market efficiency and many others. Economic
development of UK directly influences the performance and productivity of business. When the
economies are growing it offers wide range of growth opportunities which help in increasing the
profitability and productivity of Aviva Plc. By understanding the GDP growth rate of Country,
Aviva plc can determine its ability to pursue long term growth strategies.
Social Factors:
The culture of organisation has a strong influence through societal norms, values and
trends. Social factors generally include demographic trends, societal norms, consumer spending
patterns and income equality (Dahlberg, Hokkanen and Newman, 2016). It is essential for Aviva
Plc to understand the changing demographic trends of UK including migration trends, socio-
economic variables and agile population. Aviva Plc must understand the demographic
characteristics of country in order to identify the right market with high growth potential. Culture
plays an important role in country, each society has different norms and values which can shape
the behaviour of consumer. Through developing local teams and local partnership, Aviva can
understand the societal norms and attitudes.
Technological Factors:
Organisation must understand the technological factors due to rapid technological
advancement and diffusion. Aviva must identify the technological factors that could help during
strategic decision making process. Through understanding the technological environment, Aviva
can capture the technological trends of country in order to achieve various advantages such as
increasing operational efficiency, increasing profitability and boosting innovation. Aviva must
keep close eyes on analysing 5G technology in order to deliver positive business outcomes by
increasing speed, user experience and expanding access.
Legal Factors:
It is essential for Aviva plc to understand the legal factors of country in order to stay
away from any legal conflicts and disputes. Without understanding the legal environment and