Analyzing the Impact of Macro Environment on Business Strategy

Business Strategy
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Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Frameworks analyse the impact and influence of the macro environment on a given
organisation and its strategies.....................................................................................................3
M1 Critically analyse the macro environment to determine and inform strategic management
decisions......................................................................................................................................7
TASK 2............................................................................................................................................7
P2 Internal environment and capabilities of a given organisation using appropriate
frameworks..................................................................................................................................7
M2 Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set........................................................10
TASK 3..........................................................................................................................................10
P3 Porter’s Five Forces model evaluate the competitive forces of a given market sector for an
organisation...............................................................................................................................10
TASK 4..........................................................................................................................................12
P4 Range of theories, concepts and models, interpret and devise strategic planning for a given
organisation...............................................................................................................................12
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17
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INTRODUCTION
Business strategy is considered as an important action and decision that taken by
company to reach its final goals and objectives. Mainly, it is combination of different plan that
needs to implement by company with the aim of enhancing their productivity level at market
place. In order to grow and attain success, business strategy play a vital role in company because
it provides an effective path and direction to execute entire operational activities (Shuen, 2018).
Current report is based on Aston Martin, is a famous car manufacturing company that specialised
in manufacturing sports cars and grand tourers with the aim of generating larger profitability
level. Report is going to discuss about various models and theories that used to analyse the actual
impact of external environment over the business strategy and implementation of plan. Along
with this, it also assists in determining the internal capabilities and competencies of business
organisation. Apart from this, Porter's five forces model is also help in analysing as well as
evaluating competitive forces that determine the industry and market forces. This can be
beneficial in improving competitive performance of company at market place.
TASK 1
P1 Frameworks analyse the impact and influence of the macro environment on a given
organisation and its strategies
In an organisation, business strategy is refers to the plan which company needs to
develop with the aim of inviting more and more customers towards its services. This is the
reason that company is responsible for developing an effective strategy so that entire activities of
company can be successfully completed along with more effectiveness. Business strategy
provide direction in which company perform their operational activities that support in
improving its competitive performance. In context of Aston Martin, developing an effective
business strategy contributes in attaining all the predetermined goals and objectives so that
competitive success can be easily accompanied by company at market place. As, the main
mission of business is to become a leading and competitive business in the market by providing
positive experience to its customers. This will provide assistance to organisation in developing
its positive brand image. Furthermore, Vision of Aston Martin is to work for community by
protecting as well as maintaining environment safe from any kind of pollution. Both mission and
vision are related with organisational objectives as it contributes in enhancing profitability and
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competitive in market place. These are attained by effectively implementing the business
strategy as it support business in improving its competitive image at market by serving best
quality of services to its customers as per their needs and wants. In relation to this, overall
business strategy of company is directly influencing and impacted by its external factors which is
analysed by PESTLE. As it is used by most companies for making effective strategic planning. It
is an amalgamation of six components which are political, economic, social, technological, legal,
and lastly, the environmental factors. All these components help an organization in shaping its
macro business environment. Talking about Aston Martin, it is operating its business in a highly
complex and dynamic environment that is known for its regulatory changes, optimizing the
environmental changes for increasing growth, collective social trends by considering the
technological changes. Therefore, to understand this better a detailed description of all the
components are given below:
Political: In order to gain long-term sustainability and profitability, the political factor
plays a significant role with a strong influence. Political stability tends to increase the company’s
sensitivity to change at the international level. Aston Martin has faced many issues in the United
Kingdom because of the uncertainty whether it is related to changing policies (implementation of
BREXIT), taxation, trade restriction, and protection for intellectual properties. BREXIT has
impacted the long-term benefits of future trends and there is less exposure to global political
development. Any kind of alteration is acting as a tariff barrier and restricting other companies
from having a new international relationship for future trades. Therefore, Aston Martin needs to
look after multifaceted factors for the smooth conduction of activities.
Economic: It determines the growth trajectory of a company because this includes foreign
exchange, interest rates, inflation, marketing conditions, etc., with a fluctuation in the exchange
rate that has influenced the profitability because of which a decline in the local currency was
seen. A rise in (high net worth individual) has changed the condition of the labour market. Aston
Martin had to pay an increased rate for attracting a large number of talented workers to improve
the performance of the business.
Social: Demographic trends are changing at a very high speed and it includes elements
such as the aging population, socio-economic variables, migration trends, and so on. In context
with, Aston Martin, the company has to identify the factors of consumer’s shift and change in
preferences (Bıçakcıoğlu-Peynirci and Tanyeri, 2020). The rise in disposable income because of
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