Impact and Influence of Macro Environment Factors on Business Strategy

Business Strategy
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TABLE OF CONTENT
INTRODUCTION...........................................................................................................................5
TASK 1............................................................................................................................................5
P1: Impact and influence of macro environment factors on the organisation........................5
P2 Evaluate the internal factors as well as capabilities of given business organisation adopting
appropriate frameworks..........................................................................................................7
TASK 3..........................................................................................................................................10
P3 By applying Porter five forces model, evaluate the competitive force in the market.....10
TASK 4..........................................................................................................................................10
P4 Use concepts & theories and prepare strategic management plan..................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
Books and Journals...............................................................................................................11
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INTRODUCTION
Business strategy signifies as a tactic approach which assists business firm to achieve vision
and mission in stipulated period of time. Therefore, it is necessary for company to maintain
effectual plan of action for gaining positive results. In addition to this, it helps in enhancing the
performance level of business organisation at marketplace. This report is carried upon TESCO. It
is well known chain of supermarket which deals in huge variety of products and services in order
to satisfy the customer. This company is situated in UK as well as founded by Jack Cohen in the
year of 1919. Apart from this, PESTLE analysis is used to assess external environmental factor
which enforces direct influence on growth as well as productivity of business organisation. In
assistance of this, SWOT and VRIO analysis is used to identify inner competencies of business
firm. And also, Porter five force models are adopted for achieving competitive benefits at
marketplace. It also involves Porter’s Generic Strategy is undertaken to assess premeditated
choice for the company (Agrawal, 2016).
TASK 1
P1: Impact and influence of macro environment factors on the organisation.
PESTLE Analysis is a structure which is used to identify the internal environmental factor
which enforces direct influence on sales as well as growth in upcoming period of time. In
reference of TESCO, the supervisor emphasised on grip opportunities and eradicates the risk for
improving efficiency of business organisation. There are different macro environmental factor in
context of TESCO which is given beneath:
Political Factor: Political factor involves different factors like tax policy, government
structure, rules as well as regulations and so on (Pearson, 2016). It imposes both positive and
negative impact on activities and functions of organisation which is discussed below:
Positive impact: Due to stability in political situation of UK, the government does not take
part in any functions and operations of business firm thus it favourably affect the performance of
company.
Negative Impact: On the other hand, the tax rate goes to be high, then it increases cost to the
goods of business firm thus it adversely affect operations and activities of business firm.
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Economic Factor: It involves interest rate, trade, tariff rate, exchange rate and many more.
Due to higher economic growth thus, it imposes positive impact on business organisation. It
enhances the growth and development of TESCO in future time period (Dodgson, 2018).
Positive impact: Due to minimize rate of inflation, it decreases the price of product which
helps the firm in increasing productivity as well as profitability level at marketplace.
Negative Impact: Herein, the unemployment rate is increases, and then income of individual
person gets minimized. Therefore, the person spends less money on buying the product. It
decreases sales and profit of company (Pitelis and Teece, 2016).
Social Factor: Social factor involves age, population, lifestyle ad trends and many more.
There are different factor which imposes favourable and adverse impact on productivity of
business firm which is given beneath:
Positive impact: Herein, the manager makes effective strategy and tactics in order to assess
the taste and preferences of customer. It helps them in providing innovative and unique goods
according to the changing need of customer. It increases their loyalty and trust level at
marketplace.
Negative impact: Due to claim made in their advertising campaign in 2013, TESCO does not
offer superior quality products as well as services to its customer thus it decreases the sales of
business firm. It negatively affects the brand image and reputation of company at marketplace.
Technological Factor: TESCO advance their supply chain management in such a manner
that increases cost effectiveness and efficiency level at marketplace. It also helps in gaining
competitive benefits over rival firm. In context of TESCO, it enforces both positive and negative
which is given below:
Positive impact: TESCO implement advanced technology, it helps the business firm in grab
opportunities in the market. For instance, mobile technology assists the business firm in
enhancing distribution services through which buyer can choose their desired wine with the help
of mobile (Tomlinson& Evans).
Negative impact: The small business firm adopted disrupted technology to enhance the
criteria of performance through bulk of market. Thus, it will become popular and customer
provides more value to disruptive technology. Therefore, the customer is not attract towards
advanced technology used by TESCO enforces adverse impact on performance level of business
firm.
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