Importance of Business Strategy and Environmental Analysis

Business Strategy
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EXECUTIVE SUMMARY
This study summarized and shows importance of using internal and external
environmental models such as PESTLE, SWOT and Porter's 5 forces. All these models help
company in analysing both internal and external factors which can have impacts on the
performance and growth of the company in both positive and in a negative manner. It also shows
effectiveness of competitive analysis model which allow companies to identify the intensity of
the competition in the market
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Table of Contents
EXECUTIVE SUMMARY.........................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
EXTERNAL ENVIRONMENT......................................................................................................4
Impacts and influence of macro environment..............................................................................4
Micro environment for the given organization............................................................................7
INTERNAL ENVIRONMENT.......................................................................................................8
Strategic capabilities:...................................................................................................................8
Resources.....................................................................................................................................9
Competitive strategy..................................................................................................................10
Focus strategies..........................................................................................................................11
Value chain analysis..................................................................................................................11
Recommendation of the best strategy........................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
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INTRODUCTION
Business strategy is made up of several actions which are being performed by an
organization in order to accomplish pre-determined goals and taking competitive advantages. It
can also be defined as a long term plan of action designed for achieving particular goals (Akter
and et.al., 2016). This present study is based on business environment which is made up of both
internal and external business environment. In the internal environment, company examines its
own strategic capabilities and resources with the help of SWOT and VRIO analysis framework.
On the other hand, it will also show importance of analysing external business environment. In
external business environment, company examines both macro and micro environment with the
help of PESTLE and Porter's 5 forces model. Further, this study will also show competitive and
focus strategies and their effectiveness in improving performance of an organization with the
help of Ansoff matrix.
This study of business strategy is based on Royal Bank of Scotland. It is one of the retail
banking subsidiaries of the Royal Bank of Scotland group which has approximate 700 branches
in which numbers of branches are situated in Scotland. It was founded in the year of 1727 by
Alison Rose. Vision of this bank is to serve customers in an efficient manner and improve
quality on continuous basis for satisfying changing needs of customers. This bank serve
approximate 19 million customers. Mission of this bank is to become the first choice of
customers, businesses and institution by providing them excellent financial services.
MAIN BODY
EXTERNAL ENVIRONMENT
Impacts and influence of macro environment
Macro environment is a part of external business environment. It consists of all those
factors which company cannot control itself but it can change intensity of some factors by
making changes in its own company's policies and improving brand image of the company. It
includes political factors which shows stability and instability of political of the country in which
company is operating and want to operate. Economic factors, technological factors, social
factors, environmental and legal factors. By making an effective use of PESTLE analysis model,
Royal Bank of Scotland can analyse all these factors and identify opportunities and threats.
PESTLE analysis
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