Business Strategy: Analysis of Macro and Internal Environment

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Application of frameworks to analyse the macro environment.............................................1
TASK 2............................................................................................................................................3
P2: Analysis of internal environment of an organisation.............................................................3
TASK 3............................................................................................................................................6
P3: Application of Porter's five forces model..............................................................................6
TASK 4............................................................................................................................................8
P4: Application of theories and concepts for devising strategic plans for an organisation.........8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy refers to a combination of strategies applied by an enterprise and
decisions taken by it to gain competitive advantage and achieve its long-term goals and
objectives (András and Havran, 2016). It is a set of moves and measures which a business needs
to take in order to achieve high-level performance. It gives an outline of how business needs to
be carried out if desired outcome has to be reached. This project is based on Klarna which is a
Swedish Bank founded in 2005 providing digital financial solutions for its customers. It provides
solutions for online storefronts, direct payments, post-purchase payments etc. In this assignment,
focus will be made on analysis of impact and influence of macro environment on an
organisation, assessment of an enterprise's internal environment. Additionally, evaluation of
outcomes using Porter's five forces and application of different concepts to devise strategic plans
for a given organisation will be covered as a part of this report.
TASK 1
P1: Application of frameworks to analyse the macro environment
Macro environment refers to a set of external factors which have a bearing on the
operations of a company. PESTLE analysis can be used for analysis of an organisation's external
environment (Arasti, Khaleghi and Noori, 2017). It covers factors like political, economic,
social, technological, legal and environmental. As Klarna is a bank offering digital payment
solutions to its customers it is impacted by the influence put by all these factors which is
explained as follows-
Political factors- These factors are policy of the government, political stability, tax
policy etc. A change in any of them can lead to a change in planning of business. Thus its is
important for a company to effectively analyse them. Klarna is impacted by a change in any of
them as its strategies are affected directly.
 Opportunity- If there is a change in policy of the government and it becomes favourable
for business then it becomes an opportunity for Klarna as it can perceive a chance of
increasing its profits. If government gives more priority to digital payments then it can
lead to an increase in the overall business of Klarna which will raise its level of profits
effectively.
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 Threat- Increase in taxes by the government by altering its taxation policy can impact the
profitability of Klarna. This is so because increase in taxes can increase the costs of
Klarna and thereby will lower the profits of the bank. Thus it acts like a threat for the
Bank.
Economic factors- These factors are economic growth, exchange rates, interest rates,
disposable income of customers, inflation rates etc. A change in any one of them can alter the
financial plans of the enterprise (Arvidsson and Holmström, 2017). Klarna is impacted by these
factors as they can directly increase or decrease its level of profits.
 Opportunity- Booming economy due to high economic growth is an opportunity for
Klarna as it will substantially increase its customer base. This is so because the bank will
be able to increase its customer base substantially and this will certainly reflect in its
earnings. Thus it acts like an opportunity for Klarna.
 Threat- Rising inflation rates are a threat for Klarna as it can directly impact the number
of customers it has. This is so because increase in inflation rates directy impacts the
disposable income of the customers and thus if it decreases not many customers will opt
for digital payments.
Social factors- Social factors are population, heath consciousness, change in lifestyle of
customers, cultural barriers etc. Klarna is impacted by a change brought due to any of these
elements.
 Opportunity- Change in lifestyle of customers is an opportunity for Klarna as more and
more of them are adopting method of digital payments. This will directly help the
company in increasing its profits. If the social customs allow the customers to go on with
digital payments then the business of Klarna will be positively boosted.
 Threat- Cultural barriers stop some people from keeping their money in banks for
savings purpose. This acts as a threat for Klarna as it affects its business model. Thus it
can impact the overall business of Klarna as the cultural barriers can stop many people
from adopting digital payments.
Technological factors- Technological factors are technological changes, R&D, level of
innovation etc. A change in any one of them can impact Klarna as they can either increase or
decrease its profitability (Bele, Panigrahi and Srivastava, 2017).
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