Impact of Macro Environment on Companies and Their Strategies

Business
strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1- Impact of macro environment on the companies and their strategies.............................3
M1- Micro environment to inform strategic management decision.......................................5
P2 Analysis of internal environment of the company ...........................................................6
M2- Internal environment to asses strength and weakness....................................................9
P3- Porter's five forces model and include competitive forces of the company....................9
M3- strategies to take competitive advantages ....................................................................11
P4 Strategic Management Plan.............................................................................................12
D1- critique and interpret information and data applying environmental and competitive
advantages ...........................................................................................................................16
CONCLUSION .............................................................................................................................16
REFERENCES..............................................................................................................................17
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INTRODUCTION
Business strategy is the framework which is plan by the companies to achieve their
vision, objective, mission, competing successfully and optimizing performance with their
business models (Bıçakcıoğlu, Theoharakis and Tanyeri., 2019). Business strategies involves
marketing, sales strategies, information technology strategies, HRM strategies and sustainable
strategies.
This report will Take River Island company for this case study (The history within River
Island. 2013). It is highly street fashion brand and their headquarter is in London UK.
Vision- To be the best high street fashion brand.
Mission- To aim sustainable development of the company and ensure strong competitive
advantages through its product quality.
This report will analyse the impact of macro environmental on the River Island and their
strategies and it will add PESTEL analysis to explain the micro environmental influence on this
company (Lyneis, J. M., 2020). This report will analyse internal environment by using the
appropriate framework. It will also apply the porters five analysis to explain the competitive
forces on this company. This report will conclude all the forces of porter's five such as threats of
new entry, Bargaining power of suppliers, bargaining power of the buyer, competitive rivalries
and threats substitution. In the end of this report will apply the range of theories and model for
the devise strategic plaining for the River Island company.
MAIN BODY
P1- Impact of macro environment on the companies and their strategies
There are some macro environmental factors which impact on the companies strategies
and their profitability. It is important for the River Island company to analyse those factors and
make new strategies for the company (Chen, Eshleman and Soileau., 2017). The Best
Framework to analyse the macro environmental is PESTEL analyses which covers all the
factors such as Political factor, economical factor, social, technological, environmental and legal.
This framework will be helpful for them to analyse all the factors affect on their business
strategies.
PESTLE analysis of River Island
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Political factors
Political factors such as change in the government polices such as Taxes on the product
which increase their product price. It affect on the company's profitability and their growth. the
stability in the politics is no longer secure which keeps this company curious on growth and big
investment. It also affect on the companies strategies and it is important for the company to
make new strategies, so they can overcome from this issue. Political factor always an big factor
for the River Island company because they are operating their business on the global level and
every government have their own tax structure which affect the profitability o this company.
Economical factors
Economic factors such as change in the product demand can affect on the companies
strategies (RIVER ISLAND SWOT AND PESTLE. 2016). Demand of the products change with
the time when three is any situation in the country like inflation and deflation in the economy
of the country where River Island is operating their business and this can affect the strategies of
the River Island company (Gupta, Gupta and Gupta., 2019). They have to make new strategies
to develop their products which can satisfy the demand and needs of their customers. It is
important for them to develop their product and marketing strategies to take competitive
advantages.
Social Factors
Customer value is another important factor for the River Island company, People like
to wear new trending clothes and follow new fashion. It is important for the company to add
value for the customers by providing products in the affordable prices (Helfaya and Moussa.,
2017). This can be possible through creating good relationship with the suppliers, the River
Island should improve their relation with their customers so they can add some value for the
customers in their products.
Vision- To be the best high street fashion brand.
Mission- To aim sustainable development of the company and ensure strong competitive
advantages through its product quality.
Technology help this company to take competitive advantages in the market (The
Fascinating History of River Island. 2020). River Island company has implemented new
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technology machines in their workplace to increase their productivity and their profitability.
When company bring new technology in their workplace than leaders and mangers of the
company have to make new strategies to provide training to the employees and make them learn
how to use new technology to produce better result for this company (Eskerod, and Larsen.,
2018). It is important for VRIO analysis them to implement new technology trends in the
company so company can show their presence in the market and gain competitive advantages in
the market. They are also having online shopping site where customers can order their product
and their delivery team will deliver their product at their home.
Environmental
Environmental factors also affect on the companies strategies because with the change in
the season people wear clothes according to the different seasonal conditions. In winter people
wear warm cloths and rainy reasons people wear raincoat etc (Auliandri And et.al., 2019).
leaders of the River Island company take decision for the company during the seasonal change
and make new strategies to sell their product to the customers. They have to bring different
clothes and new design for the customers, so they can attract customers by satisfying their needs.
Legal
If UK Government change tax structure then it can also affect on the profitability of the
company . During the change in the government polices leaders of the River Island company
also have to make new strategies to follow those police, and they also have to change in their
organizational structures (Pati, and Bandyopadhyay., 2017). It is important for the River Island
company to follow the governmental rules, so they can make good relationship with the
government and take advantages of the government composition polices.
M1- Micro environment to inform strategic management decision
Strategic decision-making are decisions made by the companies superiors according to
the companies mission and their vision. Superiors of the River Island company should analyse
the macro environment factors such as political factors, economic factors, social factors,
technological factors, environmental and legal factors so company can take competitive
advantages in the market (Du Plessis., 2017). Changes on these factors can affect the
profitability of River Island company and it can affect on the strategic management of the
company. They can take competitive advantages through analysing this factors properly and
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make proper strategies to run their business smoothly. PESTLE analysis can be used to identify
those factors and it helps to identify external factors which affect on the business.
Stakeholder analysis
Stakeholder analysis is the process of identify these people before the project begin:
grouping them according to their levels of participation, influence in the project. Stakeholders
of the company have huge impact of the company which makes important for the company to
give them importance more than anything. Here are stake holder of the River Island
Employees
Employees are important for the River Island who run day to day activities in the
workplace and make River Island company successful (Hernández and Garcia., 2018).
Employees have who work in the manufacturing area have to cover raw material into the fished
goods and some of the employees have to provide services to the customers at offline shop of
River island. They help company to achive their objectives by doing their work according to
the companies strategy.
Leader
leaders of this company lead employees to make vision of the company into reality.
Leader of the River Island company encourage employees to achieve goals and objective of the
company so company can be successful in their business. Leaders make strategy and take
decision for te company without leaders company can not achieve their goals.
Managers
Manager of the company manage very activity in the workplace and provide right
direction to employees. They manager every department of the River Island company and give
proper direction to the employees related to their task. Manager of the River Island company
make strategy for the company and take decisions according to it.
Investors
Investor of the River Island invest, and they get revenue from the company. They invest
in the company and company use their money to run their day to day activities. It is important
for the company to show the strategy of the company so they can gain their trust and they will
invest on the River Island.
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