Impact of Macro Environment on Business Strategy

This study material discusses the impact of macro environment on business strategy. It explores the external factors that influence organizational decisions and the importance of understanding the market. The content also includes an assessment of the internal environment and Porter's five forces analysis.

BUSINESS STRATEGY

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO 1.................................................................................................................................................3
Impact of macro environment on an organization.......................................................................3
LO 2.................................................................................................................................................6
Assess the internal environment..................................................................................................6
LO 3.................................................................................................................................................8
Porter’s five forces.......................................................................................................................8
LO 4.................................................................................................................................................9
Models, theories and concepts.....................................................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy is the set of actions and decisions which can organization takes so that
they can gain huge profit in the market and the objectives of the organization can be met. This is
good for a long run of the company in the market and also gives an organization a sense of
direction which can make the organization compete and get huge competitive advantage. Nissan
is an organization which is from automobile industry and is having its headquarters in Nishi- Ku,
Japan. The organization was established in 1933 and has over 138,910 employees working in the
company. Currently this automobile company has very large customer base in all around the
world. The main mission of Nissan is to gain large market share, vision of company is to
positively influence different customers by providing quality products and services, run its
business operations progressively is main objective, and finally run each business activity in
ethical manner main moral value of Nissan. The report mainly discusses the internal and external
factors which are highly effects to different operations the organization which needs to be done.
The competition is continuously increasing which, that’s why the company is required to take the
right decisions after analysing the market. This report has involved some productive business
strategies which will definitely support Nissan for gaining large customer base.
MAIN BODY
LO 1
Impact of macro environment on an organization
There is a lot of influence of the external factors in the company which is not even in the
control of the organization but it is too necessary for the organizations to make decisions in the
company according to them (Orazalin and Baydauletov, 2020). The pressure is on the
management and the stakeholders of the company to take the right decisions so that the
organization can continue for having the strong market share for them. This will be supported to
this company to understand the market better and the further decision in the market of Nissan can
be taken by the company so that it can be achieved an excellent base for themselves.
Political Factors
The political power in the country is stable which is why the company can be capable to
function effectively. This is good for Nissan because the organization will be able to follow the
can strategy and gain more profit in the market which can be used by Nissan to globalize

themselves in the market (Centobelli and et.al., 2020). The employees and the customers have to
have a transparency in the Nissan so that they can have a sense of direction in the organization.
The corruption level is increasing which is a great drawback of this company which creates a
threat on the revenue of the company.
Economic Factors
This is going to make the unemployment in the country fall which is a very important factor
for the country because the lifestyle of the population will get better which means the prices of
the products can also increase of Nissan. There are many of experience, that’s why the products
and the organization are not having many problems in productivity and operations in the
organization (Shollo and Galliers, 2016). The quality is maintained and the satisfaction level as
well of the different customers. There is a good team of workforce in the company which is why
the economic condition of the organization is good.
Social Factors
There are lots of factors which have to be considered by Nissan, in which this company can
achieve very positive results, like; the customers and employees’ satisfaction in the company.
The company has to be made sure about that, the employees are not having any discrimination in
the organization and the organization is being fair to them so that the productivity in the
organization does not get affected (Gumusluoglu and Acur, 2016). The trends or demands of
different customers are changing as well which has to be maintained by the organization which is
good for the company’s sales.
Technological Factors
The organization will have to get in a lot of technological changes if they want their
organization to have a good and effective base in the market. The technological aspect can get a
higher profit margins and the Nissan can be capable for having a higher productivity. The R&D
(research and development) department can also make the organization have higher product
quality and services of Nissan can be improved (Hamilton, Cruz and Jack, 2017). The pressure
on the employees is also going to be removed which can make the huge satisfaction level of the
employees increase in the organization so that there is higher brand value in the market.
Company will be required to invest huge fund for implement hi-fi technology, so it is negative
impact aspect of this factor. By implementing new technology, Nissan can easily improve its
productivity and performance, so it is positive aspect of technological factors.

Legal Factors
The company is taking care of the legal and laws of the organization and the country so that
Nissan can have an effective functioning in the market (Zakaria, Hashim and Ahmad, 2016).
There is no discriminations which are taking place in the market and the employees are having a
healthy environment to function within. There are right wages which are being given to the
employees and even extra for motivation so that they do not feel uncomfortable working in this
organization.
Environmental Factors
To improve the climate and other environmental factors in the country Nissan has taken
many of measures, that’s why they it can have an excellent functioning. The transportation of the
raw material and other deliveries of the organization are getting delayed because of the climate
which is why the company is coming up with electrical batteries for the vehicles which will
support in making the Nissan to have an excellent functioning (Salisu and Abu Bakar, 2018).
There are zero carbon footprint measures and techniques which have developed in the Nissan
which can support in gaining extra-ordinary return in the market.
Stakeholder Analysis
This tool mainly includes three stages which has been mentioned below:
1. Determining stakeholders
This is the first stage of stakeholder analysis where Nissan need to identify and determine its
various stakeholder (Szász and Seer, 2018). For example; customers, employees, suppliers and
shareholders etc. are major stakeholder of this company.
2. Prioritizing stakeholders
This is the stage where the management of company should prioritise various stakeholders by
using stakeholder grid.
High power and high interest: Shareholder come under this category, because they provide
fun to company for gaining positive results.
High power and less interest: Customer, because they have many other options to buy
products and services.
Low power and high interest: Employees come in this category, because they always depend
on company for earning.

Low power and less interest: mainly suppliers come within this category, because they have
many other companies as well for supplying their products and services.
3. Communicating with stakeholders
It is necessary task to Nissan’s upper management to systematically communicate with
these stakeholders, because effective communication between management and stakeholders
will be positively affected Nissan’s business operations.
LO 2
Assess the internal environment
To understand the competitive market share it is too necessary important for the Nissan to
be able to understand resources value in the organization. This framework does that for the
businesses so that the organizations can take appropriate decisions according to that which is a
very important factor and also increases the productivity as well. Nissan is using this framework
to understand the competitiveness in the market and also the resources value in the market
(Fletcher, De Massis and Nordqvist, 2016).
Resources Valuable Rare Inimitable Organization
Capital 
Intellectual property   
Human Resource   
Technology    
 Valuable
This is a too important factor for Nissan, because this will enable to this company for
achieving excellent benefits and increase their margins of profit. This is will be supported to the
company to add in value of the products in the Nissan so that the company can achieve an
effective functioning. The quality of Nissan is very well maintained and for the company to have
a competitive advantage it is too important to the Nissan to be capable to maintain that factor
(Eker and Eker, 2019). There is a lot of development in the technological aspect of the
organization so that the company will be achieved an effective functioning to itself within
different market places. There are many of opportunities which come in the company because of
the resources and valuable factors. The important and valuable resources in Nissan are capital,
human resource and technology.

 Rare
To increase the monopoly in the competitive market it is too necessary for the businesses to
be able to make a place for themselves in the market. The brand value is also increasing because
of the rare materials which are being used in the electrical vehicles which Nissan is coming up
with. There has to be a control on the technological changes so that the organization will be
achieved an effective functioning in the organization. This rare resource will be helped to Nissan
for having an effective functioning, and this company will be able to have a better functioning
higher profit margin. The company has to have right skills and techniques to use these rare
products in the organization so that they can make the customers become loyal in the
organization
 Inimitable
There are a lot of companies which will copy the products and resources of the competitors
so that they can make the same or similar products which is going to get lots of customers within
the organization. There are a lot of innovations which are being done by Nissan so that they can
have a bigger market share which is why the company is taking patent acts seriously so that the
other organizations in the market cannot copy their products and services. This is a good factor
for a long term of Nissan within the market and that is also going to support the organization for
having a better base to itself in the market (Pitelis and Teece, 2016).
 Organization
Organizations have to have the right strategies and measures in the organization so that this
company will have a sense of the direction to function in. There has to be a good understand of
the objectives and combinations in the Nissan so that there is an excellent competitive advantage
which the organization can get. The competitors for Nissan are Ford, Land Rover, etc which is
why the company will have to analyse the factors before making any further decisions in the
market (Kitsios and Kamariotou, 2019). There are training and development are being done of
the employees which are working in the Nissan so that company will be achieved an effective
functioning which can help to this automobile company to gain huge profit in the market.
McKinsey 7s Model
This is very innovative model which can support to Nissan for making productive
business strategies. It mainly includes seven elements which has been discussed below;

Strategy: The company should always use productive business strategies so that the organization
will be able to operate effectively in the market and there is going to be a better sense of
direction which would be present.
Structure: This company has well-developed structure which is good for a competitive
advantage and the organization will be able to operate effectively (Shafiq and Tasmin, 2016).
Systems: Upper management at Nissan is able to run all operations in systematic manner and is
experienced as well which is good for the future growth of the organization.
Shared values: The company and its employees many times works in social welfare which is
good for the portfolio of the organization in the market.
Style: The management of company always uses effective styles of leadership for positively
affecting its employees.
Staff: Most employees and staff within Nissan has capabilities to perform effectively in daily
operations. The workforce of Nissan is motivated from time to time which is going to be a great
factor for the company as well since the demands of the organization are going to be met.
Skills: Upper management of company mostly provides training sessions to its employees for
improving their skills and abilities. This gets the productivity of the organization increase and the
company will be able to operate effectively in the market as well.
LO 3
Porter’s five forces
Porter’s five forces is very useful framework which is being used by organization so that they
can get profitability by getting a strong strategy for the Nissan (Finoti and et.al., 2017). The
managers of the company are selecting the right measures and profitability in the Nissan so that
this company will have a smooth and effective functioning for the long run within the market.
Competition is increasing which is why this is a very necessary factor to the Nissan to analyse so
that there is an excellent functioning.
 Bargaining power of buyers (Medium)
The buyer’s trends are also shifting which has to be understood by the company so that there
are demands of different customers can also be met on time. The Nissan will have to give
discounts and have a transparency with various customers and employees of this company so that
it will be achieved an effective functioning within the organization (Dangi and et.al., 2018). The

buyers also want products which are environmental friendly therefore the company is using
electrical batteries in the organization so that they can get in more customers and have higher
profit margin.
 Threat of new entrants (Low)
There is a necessary requirement of many of investment within the market so that they can
enter the market but Nissan has already made a place for them within the market that’s why the
Nissan is having a strong base for themselves. There have to be skilled and developed
employees in the organization so that they can achieve very higher profit margins. There also
have to be a lot of investment in the innovation and research department so that this automobile
company can achieve huge competitive advantage in this industry (Chen and Eriksson, 2019).
 Bargaining power of suppliers (Low)
There are a lot of suppliers which Nissan is captured in the market so that the company can
get a high input of raw material in the organization so that there is a maintained productivity in
the organization. The suppliers which ask for higher wages then the company can shift to other
contacts for the raw material which is coming in the Nissan so that their organization can have
better revenue generation.
 Threat of Substitutes (High)
The competition within the market is high which can to be maintained by the organization so that
they can have a good market share for themselves. There has to be training and development of
the employees in the Nissan will be achieved an effective functioning within the workplace (Doh
and et.al., 2017). There are a lot of companies in this industry which is why the Nissan need to
come up with different products to attract the customers and not to have the other vehicles copy
there are patents taken by the company, so it will be achieved an effective functioning in the
market.
 Degree of Rivalry (High)
There is a lot of experience which the Nissan has gained in the market so that it will be
achieved an effective functioning. There is a lot of innovation and creativity in the organization
which is taking place so that this company will be achieved an effective functioning and
reputation in the market so that the company can have a successful long run in the market.

LO 4
Models, theories and concepts
Bowman’s Strategy
This is too productive business strategy that indicates eight position which Nissan highly
needs to be considered.
Low price and low value: The company should provide its products and services on low price to
gain higher value.
Low Price: Nissan should offer low price than its competitors to gain huge competitive
advantage.
Hybrid: The company should put its huge efforts to lead the market.\
Differentiation: Nissan should provide some different and exclusive range of products and
services.
Focused differentiation: This is another major position in this strategy where Nissan should be
focused for producing new exclusive vehicles (De los Rios and Charnley, 2017).
Increased price and standard product: The company should be charged higher price on its
premium and standard products and services.
High price and low value: Nissan can take high price in its premium services, but its value will
be something decreased.
Low value and standard price: This last position where company should offer standard price for
gaining high brand value.
Porter’s Generic Strategy
Porter’s generic is another productive strategy which includes four major techniques to
gain huge competitive advantage, in which these techniques has been discussed below;
Cost leadership: Nissan should provide very favourable and customer friendly price its various
customers.
Differentiation: Maintain differentiation in products and services too necessary task to Nissan.
Focus: The company always be focuses on new business opportunities (Li and et.al., 2019).
Differentiation focus: With the support of this technique, Nissan will be able to produce
exclusive vehicles.
Strategic Management Plan
Background

This strategic management plan is created for Nissan to increasing its profit margin.
Organisational Structure
Nissan is a multinational automobile company, so it has very large organisational
structure.
Vision
The vision of the organization to get value of stakeholders, customers, colleagues and the
community in which the industry is serving. There is a sense of loyalty and commitment in the
organization in the industry which is making the customers and the workforce aware of all the
factors.
Mission
The mission of the organization to get loyalty from the customers, create a brand value
and customer value in business.
Objectives
 For increasing the sales of new product of Nissan with 20% till the end of year 2022.
 For increasing the market share with 40% till the end of year 2023.
 For improving the consumer experience with 15% in the upcoming 8 months.
Core value
The organization wants to service the best of services and products for different
customers so that the value of the products is maintained. The satisfaction of the customers with
the products is focused upon so that there is a high quality of products and services.
Ansoff Matrix
 Market Development
There are a lot of new markets which have been penetrated by Nissan with their existing
products because the company can a confidence in those products and that can get in loyalty of
the customers as well (Yasa and et.al., 2020). It is too necessary to the company to get in loyalty
of the customers so that it will be achieved an effective functioning and it can be capable for
having huge profit margins.
 Diversification
There is a lot of risk in this strategy but Nissan is following this method so that they can
understand different customers globally and invent their products accordingly. It is too necessary
for the company for getting in a lot of changes in the organization, so that Nissan will be
achieved an effective functioning. The company is having a strong portfolio which is why it is
very easy to this company for highly expanding itself globally.
 Market penetration
Nissan is a big organization which has been in automobile from 86 years which is why the
organization has the right strategies and measures like discounts and loyal customers in the
Nissan so that it will be achieved an effective functioning. Innovation can be tried in the local
area so that the company can take feedbacks easily and improve their products before penetrating
in market (Christ, Burritt and Varsei, 2017). This is a major step with Nissan has taken for their
products so that the Nissan it will be achieved an effective functioning and at the end this
company can be capable to maintain their standards.
 Product Development
It is too necessary but risk factor for Nissan to penetrate new products in existing markets
because the customers will not be known and the products can be and may not be a success. It is
too necessary to this automobile company for being able to sell their products to different
customers from the time to time. It is too necessary to the Nissan to be able to be achieved an

effective functioning and a stable functioning so that the company can make they have a
competitive advantage.
Market Tactics
 Product
Nissan has a lot of unique factors in their product that is a productive factor, because it is
making the organization have a strong base for them within various market segments. There are
many of innovations which are taking place in Nissan so that they can attract more customers
within the organization. Nissan does not give out default vehicles out to the customers which is a
too necessary factor to this organization.
 Price
The price of the products is high because the quality and standards of the organization have
been set up like that (Pourali and et.al., 2019). There was a skimming strategy which was used
by the organization but due to the increase of the competition in the market the organization has
increased their prices as well.
 Place
The organization had globalized them but there are a lot of stores which are giving out the
customers gain the trust and customers can easily get what they need from the organization
effectively. The demands of the products are increasing which is why it is too important to the
Nissan to be able to have a stable base to itself which is going to make this company able to be
achieved an effective functioning.
 Promotions
There are many of promotion techniques which are being used by Nissan so that they can
have a strong base within the market for themselves. The organization has gotten online so that
Nissan can be reached out to different customers and digitalise themselves so that they can make
the organization have better products.
Implementation
The Nissan’s upper management should take support from different business consultants
to systematically implementing this plan.
Evaluation
This strategic management plan will highly needs to be considered within Nissan’s
business environment for gaining huge competitive advantage.
CONCLUSION
On the basis of above report, it can be concluded that there is Nissan is highly required to
innovate and create new for the customers. The different trends and demands of various
customers are increasing and it is too necessary to the companies for being able to match those
expectations so that they will be achieved an effective functioning. The right wages have to be
given to the customers on time so that they give their best in the company as well so that it will
be achieved an effective functioning. On the other side, there are many of strategies and the

organization has to choose for the right one which can be adapted by the organization effectively
and quickly so that the productivity and operations does not reduce in the organization.
Organizations will have to understand the functioning and the competition within various market
segments so that the right decisions should be taken by the Nissan that will be supported to this
organization for getting a higher profit margin and also a long and successful run within the
market.

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