Analyzing Macro Environment Factors and Business Strategies of Costa Coffee

This report analyzes the macro environment factors and business strategies of Costa Coffee, a famous coffee shop in the UK. It examines the political, economic, social, technological, legal, and environmental factors that impact the company. It also evaluates the internal environment, strengths, and weaknesses of the organization. Additionally, it explains Porter's Five Forces model and discusses the use of strategic management tools like Ansoff's Growth Vector Matrix, SWOT analysis, VRIO model, and value chain analysis. The report also explores the use of the balanced scorecard and stakeholder analysis in strategic decision-making.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1) Critically analysed the macro environment factors within organisational and its business
strategies.....................................................................................................................................3
M1) Evaluation of external factors in order to organisation adapting strategic management....5
TASK 2 ........................................................................................................................................5
P2) Examine internal environment in the organisation context and utilising various strategies.
....................................................................................................................................................5
M2) Evaluate the internal environment, strength and weaknesses of an organisation. ............9
TASK 3 ...........................................................................................................................................9
P3) Explain porter's five forces model within the company at marketplace. ............................9
M3) Examine various strategies which helps to improving competitive edge. .......................11
TASK 4..........................................................................................................................................12
P4) Describe various theories and model which are implementing strtaegic planning in the
context of organisation. ............................................................................................................12
M4) Evaluate management plan which helps to achieving organisation goal and objective of
company....................................................................................................................................13
CONCLUSION.............................................................................................................................13
REFERNCES.................................................................................................................................13

INTRODUCTION
Business strategy is wider and broader concept which refers to organisation using
different strategy in order to gaining competitive advantages and achieving organisation goal and
objective of company (Blank, 2020). The report is about Costa coffee which is one of the famous
coffee shop in United Kingdom and thy providing various kinds of foods and beverages. The
paper consists organisation evaluating internal and external capabilities and using various
framework and accordingly formulated strategies in order to enhancing profitability and
productivity of company.
TASK 1
P1) Critically analysed the macro environment factors within organisational and its business
strategies.
Strategy-: It includes various strategy which helps to achieving goal and objective of
company. It involves organisation formulated the various strategy which in order to enhancing
profitability and productivity of company (Jra, 2017). It is process which helps to determining
objective and goals and accordingly execution of various resources.
Mission-: Costa coffee is main mission to providing best services for customers.
Vision-: Vision of organisation is becoming world's favourite coffee shop and
developing great place for customers as well as employees in order perform work effectively and
efficiently.
Objective-: Main objective of company fulfilling the needs and demands of customers
and enhancing profitability of company.
Political factors-: It is factors which including government imposed various rules and
regulation regarding the organisation in order to they are adhered to follow such rules and
condition and accordingly formulated strategy which easily run their business operations.
Economical factors-: This factors plays vital role in order to organisation easily expand
their business operations in another country. In relevance of costa coffee, it includes exchange
rate, inflation rate and tax rate all are the factors affect the organisation. It involves organization
expand their business operation in another country so their tax rate, interest rate and exchange
rate impact on business model.

Social factors-: It includes various factors such as culture, belief, tradition and religion
because all this factors affect the company. It includes Costa coffee serves the ample numbers of
customer so each and every customers have different taste so it impact the business,
Technological factors-: It includes various tools and techniques which are used by
company so accordingly Costa Coffee make improvement in products and services and
developing innovative products and services.
Legal factors-: This is important factor because it involves policies, laws and legislation
so Costa coffee expand their business operations in another country so adhered to follow legality
to another country (Maniora, 2017).
Environmental factors: It including various factors such as climate change, temperature
and many others. In context of company, it including utilised eco-friendly disposable products
which are not harmful for the environment and not affect the company image at marketplace.
Ansoff growth vector matrix
This is the tools and techniques which result as organisation formulated strategies in
order to gaining competitive advantages. In relevance of organisation, it refers to process which
are focused on different market and accordingly executed effectively.
Market penetration-: It is process which refers to Costa coffee investing huge amount in
order to gaining competitive advantages and achieving maximum market share (Moutinho,
2016). It includes utilised effective communication tools and techniques in because it helps to
achieving organisation goal and objectives company.
Product development-: This is tool or strategy in order to organisation planning for new
products and services. In relevance of Costa coffee which result as attracting to large numbers of
customers.
Market development-: It is process which including Cost coffee formulated strategy in
order to expand business operation for new market. Which directly impact business profitability
and targeting large numbers of customers.
Diversification-: It is strategy which refers to new products and services for new market
so Costa coffee launching online services for customers in order to easily food delivery for
customer which result as generated high revenue and profit.

SWOT analysis
Strength Weaknesses
 It including using advanced technology
so it is biggest strength.
 Costa coffee using social media
platform in order to promotes the
products and services (Nguyen, 2017).
 It includes management of company is
bigsgest weaknesses for company so
impact the image of company.
 It includes various external factors
which impact on business profitability
and productivity of company.
Opportunities Threats
 There are ample numbers of
opportunities which result as expand
their business operation in another
country so targeting large numbers of
customers.
 It is formulated new strategies
regarding products and services and
attracting large numbers of customers.
 There are ample numbers of
competitors are present in the market so
it is biggest threat for the company.
 In present scenario changes very fast so
technological changes and digital way
affect them (Omarini, 2016).
M1) Evaluation of external factors in order to organisation adapting strategic management.
It including various external factors such as political, economical, technological and
many others which impact on business profitability and productivity of company. Costa coffee
majorly affect this factors so organisation formulated strategies and effectively executed in order
to achieving organisation goal and objective of company. It including ample numbers of
competitor present so they affect the business revenue.

TASK 2
P2) Examine internal environment in the organisation context and utilising various strategies.
Organisation utilising various strategic capabilities in order to easily analysed the
external environment on that basis company utilised their capabilities and abilities. There are
two basic component of strategic capabilities such as resources and competences (Pai, 2017).
Resources is factor which essential for each and every company without that cannot survive for
longer period of time as well as competences is process or valuable assets which utilised by
organisation in order to developing brand image in the mind of customers.
Resources based view strategy-: It is one of the tool which effectively and effectively
used by organisation which result as identifying strategic resources in order to successfully
operate the business operation.
McKinsey's 7S framework-: It is process which organisation executed new strategies and
successfully adapting in order to determining new areas which result as gaining profitability
(Sellers, 2017). This is model which including 7S due to categorised into as hard S and soft S.

The hard factor including structure, strategy, system and so on so all this factors helps to
achieving competitive advantages because organisation effectively used this framework in order
to appropriate flow of communication and proper structure follow. Apart of that, it involves
Costa coffee utilised soft S such as skills, staff, style and shared value so all this factor plays
important role in order to HR department hiring capable and able person and effectively
managed in order to performed task very well. Organisation share their values, norms and
guidelines with their employees so which are helps to attaining goal and objective of company.
This is 7 elements are important for company on that basis top management formulated
strategy which result as gaining competitive advantages and developing brand image at market
place. It including structure and HR department plays vital role which recruiting capable person
which are adding value in an organisation and increasing productivity and profitability of
company.
VRIO Model
VRIO is tools and techniques which including ample numbers of resources and utilised
effectively by organisation in order to organisation grow and sustain in the market for longer
period of time (Sturgeon, 2019). VRIO is model which are used by Costa coffee model in order
to including analysed the various element such as innovation, customer's loyalty, service quality,
quantity, financial position and others. Organisation evaluating all this factors and resources
accordingly developing new strategies which result as exploit new opportunities at market place.
Benchmarking-: Organisation set criteria or standard on that basis organisation
performing business operation effectively and achieving organisation goal and objective of

company. On that basis enhancing profitability and competitive advantages (Tun, 2017). There
are four kinds of benchmarking which are mentioned below.
Performance benchmarking-: It includes Costa coffee serves the best services to
customers so on that basis evaluating performance and front end staff warm welcome to
customers so conducting good behaviour.
Practice benchmarking-: Costa coffee set criteria so used various tool in order to achieve
that standard on that basis fulfil the gap between them and providing various kind of seasonal
discounts and offer so helps to achieving target.
Internal benchmarking-: Internal benchmarking refers to Costa coffee used various
strategies which helps to achieving internal standard such as business operation, production and
other units (Van Scheers, 2018).
External benchmarking-: External benchmarks refers to Costa coffee set criteria on the
basis of competitors accordingly utilised effective distribution network which get more benefits
from its competitors.
Value chain analysis
Costa coffee Value Chain Analysis
It is process which including inbound activities in primary activities such as technologies,
equipment and hardware. Operation including various services and activities such as food and
beverages (Vasilcovschi, 2017). It involves marketing and sales department which plays vital
role in an organisation in order to promotes services and products to attracting large numbers of
customers. Costa coffee utilised digital method which providing ease of services to customers.

Other hand supporting activities, it includes all the activities related to infrastructure such
as software set up of Costa coffee, technological development as well as human resource
management of company. Production department conversion of raw material into finished goods.
Cost benefit analysis-: This is method which including adding benefits in order to easily
comparison make which cost are incurred. In relevance of Costa coffee, it including cost-benefit
evaluation which refers to developing various strategies and executed effectively.
M2) Evaluate the internal environment, strength and weaknesses of an organisation.
There are ample numbers strategies which effectively adapting by company in order to
various tools and models which helps to analysis the internal capabilities and abilities of
company (Moutinho, 2016). It involves organisation focusing their strength and weaknesses so
accordingly using resources and gaining competitive advantages as well as exploit new
opportunities at market place.
TASK 3
P3) Explain porter's five forces model within the company at marketplace.
Balance scorecard
It is process which refers to organisation using balance scorecard tool in order to
smoothly run the business operations effectively and efficiently which result as attained goal and
objective of company (Nguyen, 2017). It involves strategic management which helps to
identifying resources and improving performance of business functions and which affect the
organisation profitability.

Customer and stakeholders perspective-: On that basis Cost coffee focusing many
factors such as feedback, review, opinion, suggestion regarding products and services which
result as best experience for customers. Internal factors refers to quality and cost of company
which result as modify and changes in products and services which result as using new
technology in order developing innovative products so this is important factor and success
depends on this factors.
Learning and growth perspective-: Organisation analysed their performance on the basis
of their customers feedback and review and accordingly modify accept the changes.
Financial perspective-: It is element which including organisation evaluating the
financial position such as financial ratio, variances, budgets and cost which are incurred in
business activity (Omarini, 2016). It is tools which effectively analysed Cost coffee activities on
that basis each and every consumer easily afford them.
Stakeholders analysis
This is process which refers to monitoring and evaluating various factors such as
stakeholders, customers, suppliers, vendors and many other. It including two important
component such as power and interest, in context of Costa coffee, it refers to organisation
mangers marinating good and healthy relationships in order retain customers for longer period of
time.

Manage closely-: It includes those mangers have high power so maintain strong
relationship with stakeholders in order to effectively and efficiently maintained for longer period
of time.
Keep satisfied-: It refers to high power but lower interest so easily satisfied with the
sufficient investment in order to development new avenues (Pai, 2017).
Keep informed-: Customers of organisation which refers to Costa coffee have lower
power but higher interest so manger participated in all activities and business operations.
Monitored-: This is process which refers to company stakeholders have low interest and
low power so essential to satisfy the needs and wants of customers.
Porter's analysis
It is process and tools which utilised by company in order to analysis the business
environment on that basis formulated strategies which helps to gaining competitive advantages
and enhancing profitability and productivity of company. There are various factors which are
mentioned below.
Industry rivalries-: It involves their are ample numbers competitors are present at
marketplace so Costa coffee operate business in many countries so face very tuff competition in
order to price, quality, services, convenience and many others.
Threats of new entrants-: In context of organisation, it includes high threat of new
entrants in order to barrier, rules, regulation and legality are comparatively low so other industry
are easily enter into market (Sturgeon, 2019).
Bargaining power of supplier-: Bargaining power of supplier is low because ample
numbers of supplier are available at marketplace due to customers easily purchased products and
services to another suppliers.
Bargaining power of buyers-: Customers are the high power because ample numbers of
suppliers so easily negotiate the price and shift to another brands. In relevance of Costa coffee, it
including price sensitive so accordingly purchased products and services.
Threat of substitute-: In context of company, it includes there are ample numbers of
substitute products are available so substitute products and services are high accordingly
organisation established price of products and services.
Ansoff 's matrix in products and services

Organisation effectively adapting Ansoff's matrix which including products and market
strategy of Costa coffee on that basis company utilising penetration and diversifying strategies. It
including product development which refers to huge amount of investing in different operations
so it helps to successfully and growth of company (Tun, 2017). Moreover, it involves market
development in order to Costa coffee developing new market due to increasing customer base.
All this factors helps to gaining competitive advantages and exploit the new opportunities at
marketplace.
M3) Examine various strategies which helps to improving competitive edge.
There are various strategies which are formulated by organisation in order to Costa
coffee implemented effectively and efficiently. It including market development and
diversification so targeting large numbers of customers and developing new products for new
market. It involves organisation using various factors which helps to expand the business
operations in another country.
TASK 4
P4) Describe various theories and model which are implementing strtaegic planning in the
context of organisation.
Porter's generic model
This is strategy or model which effectively adapting by company so it is developed by
Michael Porter in order to enhancing profitability and productivity of company. It including this
strategy establish in order to gaining competitive advantages (Van Scheers, 2018). There are four
strategies which are discussed below.

It is strategy which refers to cost leadership so organisation focusing selling products and
services at lower prices and achieve competitive advantages.
Differentiation strategy which including Costa coffee focused the quality and services
which are delivering to customers (Blank, 2020). Focus strategy is another which refers to
organisation investing lower cost in products and services which helps to retaining customer
longer period of time.
Differentiation focus strategy refers to organisation focused on niche segment and
developing strategies which result as brand loyalty towards the customers. It is also known as
Hybrid strategy which utilised company.
Vertical and horizontal integration-: Both strategy opposite to each other in order to
vertical integration refers to organisation expand their business operations whereas horizontal
refers to organisation acquisition to another company in order to established effective
distribution channels (Jra, 2017).
M4) Evaluate management plan which helps to achieving organisation goal and objective of
company.
Organisation established objectives in order to achieving customer satisfaction and
enhancing profitability (Maniora, 2017). It including tangible strategies such as diversification
and hybrid strategy as well as tactical strategies which result as building new innovations and

new services. Organisation conducting market research which result as achieving competitive
advantages and cost leadership at marketplace.
CONCLUSION
From the above report it has been concluded that, it including organisation formulated
business strategy in order to analysed the external and internal environment various factors
which affecting business operations. It involves analysed the strength, weaknesses, threats and
opportunities of business as well as executed different strategies so considered the mission,
vision and objective of company.
REFERNCES
The Books and Journals
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Maniora, J., 2017. Is integrated reporting really the superior mechanism for the integration of
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Ethics, 140(4), pp.755-786.
Moutinho, R.F.F., 2016. Absorptive capacity and business model innovation as rapid
development strategies for regional growth. Investigación económica, 75(295), pp.157-
202.
Nguyen, S.T., 2017. Sustainment strategies small business owners use for more than 5 Years.
Omarini, A., 2016. Retail banking: Business transformation and competitive strategies for the
future. Springer.
Pai, S., 2017. Small business marketing strategies for the first 5 years.

Sellers, L.C., 2017. Leadership strategies and employee performance within small business.
Sturgeon, T.J., 2019. Upgrading strategies for the digital economy. Global Strategy Journal.
Tun, K., 2017. An Enquiry into the Nature of Chinese Capitalism and Business Strategies in
Myanmar. In Chinese Capitalism in Southeast Asia (pp. 229-255). Palgrave Macmillan,
Singapore.
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markets: Case of South Africa. Journal of Business and Retail Management
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Vasilcovschi, N., 2017. Convergence Between a New EU Economic Diplomacy and
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(Blank, 2020)(Jra, 2017)(Maniora, 2017)(Moutinho, 2016)(Nguyen, 2017)(Omarini, 2016)(Pai,
2017) (Sellers, 2017)(Sturgeon, 2019)(Tun, 2017)(Van Scheers, 2018)(Vasilcovschi,
2017)