Impact of Macroenvironment and Internal Capabilities on Business Strategy

Business Strategy

Table of Contents
Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
P1 Impact of macroenvironment in an organisation....................................................................1
P2 Analyse the internal environment and capabilities of a firm..................................................3
P3 Apply Porter’s five force model to evaluate competition in a marketplace...........................4
P4 Apply various models and theories in an organisation and devise a strategic management
plan..............................................................................................................................................5
M1 Critically analyse the macro environment and inform strategic management decisions......7
M2 Critically evaluate the internal environment and capabilities...............................................7
M3 Demonstrate an effective strategy to gain market share and competitive position...............8
M4 Devise a strategic management plan.....................................................................................9
D1 Interpret information and data applying to produce a strategic direction............................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy refers to set of actions that provide assistance to a firm in preparing an
appropriate strategy in order to compete with rivalry firms that help in accomplishment of task
within respective time period (Amran and et.al., 2016). This report is based on Tesco which is
most popular retailing company, headquarter in UK. It provides wide range of products such as
groceries, food products and other household essentials and emphasise on delivering fast services
and great offerings so as to obtain large customer base. This report comprises of influence of
macroenvironment and its impact on an economy and also it includes internal capabilities is
discussed. In addition to this, this report also covers Porter’s model and a strategic management
plan is devised in this report so as to achieve the business objectives.
P1 Impact of macroenvironment in an organisation
Macroenvironment is a broader term in an economy that includes GDP, national income,
per capita income, aggregate demand and supply and many more which assist the firm in making
an appropriate decision by analysing the several external factors of a firm (Ansoff, and et.al.,
2018). Tesco is a well-known brand in UK that deal with wide range of items such as groceries,
food and other household essentials. Its vision and mission are prescribed below:
Vision: the vision of Tesco is to be the highly valuable business in the world which
ensure future success and gain competitive advantage across the globe.
Mission: The mission of respective firm is to create a product differentiation and to
provides better shopping experience to their customers.
Objectives: The senior authority of Tesco is to provide excellent offerings and use high
quality products so as to generate maximum satisfaction.
PESTLE analysis: This assist the environmentalist to scan various external factors
which assist the firm in accomplishment of a goal in a respective time period (Anwar and Hasnu,
2016). It consists of six elements such as political, legal, social, economic, environmental and
technological aspects. In the context of Tesco, the same is presented as follows:
Political factor: This includes various political aspects that affect the operation of a
business as UK is considered as the political stable country in the world (Van Wormer and
Besthorn, 2017). It has same ruling party since a long time which assist the manager of Tesco to
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make a long term plan as it bring proper coordination and facilitate smooth operations of a
business in an effective and efficient manner.
Economic factor: This comprises of various factors such as inflation, monetary and fiscal
policy, economic growth and many more. The vote for Brexit has created an unimaginable chaos
and adversely affect the economy (Hill, 2017). This largely affect the overall operations of Tesco
as it reduces the sales and profitability within the confines of retailing industry. Foreign Direct
Investment provide an enormous opportunity to Tesco to generate multiple streams of revenue
that accelerates the sales and productivity in a marketplace.
Social factor: Due to globalisation, changes are taken at fast pace as there are changes in
technology and taste and preferences of customers and many more. By looking this
consideration, the manager of Tesco emphasises on providing new and innovative merchandise
and fast delivery of products so as to gain large access of customers across the globe.
Technological factor: UK is most technological advanced country in the world. In an era
of digitalisation, the manager of Tesco uses creative and advanced technology which help in
conducting fast operations of a business and also it uses online platforms in order to promote
their products among them. They also emphasise on proving fast delivery of products among
their clients which provide ease of convenience and thus saves both time and cost.
Legal factor: these includes various laws such as antitrust laws, patent, copyright and
trademarks and many more. The manager of Tesco abides all rules and regulations and follow
proper code of conduct which facilitate smooth flow of activities. Also, the senior authority uses
health and safety laws and employment laws so as to protect the interest of employees as it
increases job satisfaction and thus boost the morale and trust in a workplace (Johnson and et.al.,
2017).
Environmental factor: The manager of Tesco focus on several environmental protection
measures such as banning plastic and adopt the strategy of reduce, reuse and recycle which help
in achieving sustainable development in a long run. Additionally, it uses renewable source of
energy which generates positive reputation across the globe.
Stakeholder analysis
LEVEL OF POWER Level of Interest
HIGH LOW
High Shareholders Government
2