Impact of Macro Environment on Organisational Strategies

This report examines the impact of macro environment on organisational strategies, focusing on the case of EE Telecom Ltd. It analyzes the political, economic, social, technological, environmental, and legal factors that influence the company's operations. The report also includes a SWOT analysis and a VRIO analysis to assess the internal strengths and weaknesses of EE Telecom. Additionally, it evaluates the micro environment using Porter's Five Forces Model. Overall, the report provides insights into how EE Telecom can enhance its strategic direction to improve productivity.

Business Strategies

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Impact of MACRO environment over organisational strategies...........................................1
TASK 2............................................................................................................................................3
P2 Internal Analysis of firm........................................................................................................3
TASK 3............................................................................................................................................6
P3 Evaluation of Micro Environment with Porter's Five Forces Model.....................................6
P4 Introducing new marketing plan............................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11
.......................................................................................................................................................11

INTRODUCTION
Business Strategies are different set of framed decisions that are implemented by
corporate owners to achieve certain business goals and objectives. It refers to master blueprint of
organisation so that can immune its competitive edge in industry and carry out its operations
effectively and efficiently. Strategy are plan that explains course of actions for purpose of
achieving long term desired goals (Johnson, 2016Rothaermel, 2016).
Everything Everywhere (EE) is one of leading mobile network operator and internet
service provider in UK. It is a subsidiary of BT Group serves almost 32 million customers and
situated in Hatfield, London. Company deals in variety of products such as fixed line telephony,
mobile telephony, broadband internet and digital television. This report exhibits information
regarding the analysis of macro and micro environment with help of PESTEL and PORTES
model. Further this report throws light on internal climate of EE limited telecom company
through SWOT and VRIO analysis. Lastly, it contain detail about different strategic directions
which can be opt by company to enhance it productivity (Thompson, Strickland, and Gamble,
2015).
TASK 1
P1 Impact of MACRO environment over organisational strategies.
Macro environment reflects the external surroundings over which firm has no control.
These factors are related with entire economy where organisation operating its business. It means
a summation of all forces that are capable of influencing whole performance and decisions of
business enterprise. The survival of company is totally depend upon how much it has ability to
tailor and cope up with upcoming changes of outward environment. Organizations use different
frameworks to analyse external climate for the sake of examine prevailing changes. PESTEL is
one of popular model for purpose of determining each element of economy that may affect
business affairs. PESTEL represents political, economical, social, technological, environmental
and legal factors.
PESTEL MODEL IN CONTEXT WITH EE TELECOME LTD.
1. Political Factors: these forces justify the intensity about how and at what extent
government interferes in economy or specific business industry. This involves various
types of policies, political stability of international markets, employment laws, trade
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restrictions so on. UK's political scenario is deep rooted with ethics of democracy and
enjoys sustainable governance system which ensures that there is high consistency level
in policies. Due to political stable environment more and more investors get attracted to
invest there funds in nation's capital. Government has made tax reliefs policies which
provides relaxation to investors at great extent. It creates opportunity for EE telecom to
invite new investors to invest in company's different projects also it can increase its
compatibility with other rivals. But still there are some uncertainties due to Brexit
revolution due to which UK has to face some problems in terms of data exchange and
privacy control which affects adversely on local as well as international business of EE
telecom. To resolve this issue company can use updated technical software to ensure that
customer's private and confidential data is secured and more protected (Grayson, D. and
Hodges, A., 2017).
2. Economical Factors: these factors are related with performance level of economy which
includes growth patterns, exchange rates, inflation rates, consumer's purchasing power,
unemployment rates so on. UK enjoys strong GDP from past years also it is the 5th largest
economy with optimal investment climate in world. Nation has cultivated diversified
economy which allows businesses to explore distinct markets that generates profits. UK
sometimes faces issues regarding exchange rates and problem of recessions. The
opportunity for EE owners is that they can smoothly expand their business in different
markets. The problem of fluctuations in interest or exchange rates may affect profits
margin of company and can fall in prices of products.
3. Social Factors: these forces refers to different demographic features, attributes, values
and belief, social trends that interferes in business operations and decisions. UK is
popular for its cultural festivals and tradition across globe. It has huge consumer base
market with multicultural population which offer ample of chances to organisation so that
they can developed diversified variety of products and markets to fulfil the demands of
different regions. Social class of people enjoys high standard of living with higher
education system. This brings opportunity for EE owners to produce higher level of
services and products to highly advanced customers (Welford, 2016Moseley III,2017).
4. Technological Factors: these factors relates with the emergence of new technology or
innovative modification in current technology which affects the operational and
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manufacturing techniques of organization. UK is one of the leading country in
technological advancement as it has a strong network of financial and technology
industry. This creates opportunity for EE telecom by adopting innovative techniques
company can easily entertain its potential users which increases its market share and help
in offering smooth internet facilities. Moreover, it expand scale of investments in high
speed network and collaborations for 5G development. Sometime this factor brings
negative impact because of continuous modification in technology can influence the
functioning of business as company required to implement changes take place in
environment. For resolving this issue company needs to be updated and must invest in
research and development program to get all information about changes.
5. Environmental Factors: these factors refers to forces which influence environment of
following country. UK environment is friendly where many local bodies, NGO's ,
government take numerous steps and organize various programs to eliminate the negative
influence of economic and technological growth over nation's environment. This creates
opportunity for EE telecom to widely focus and take proper initiatives to reduce carbon
emissions as well as produce pure renewable energy products. These factors creates
unfavourable situation for firm because government poses various restrictions to protect
environment to cope up with these kind of problem company may focuses on e-waste
management (Akter, and et. al., 2016).
6. Legal Factors: these forces refers to legal rules and regulations made by government
according to which organisation needs to operate its business. UK legislation system is
highly flexible and because of its political stability there are less chances changes in legal
laws and standards. This brings opportunity for EE telecom is that the policies of
organisation will remain static and there are less chances to loose organisational
confidential reports (Woerner, and Wixom, 2015).
TASK 2
P2 Internal Analysis of firm
SWOT Analysis
SWOT analysis is strategical tool used to assess the competitive position of a business in
an industry. SWOT stands for strengths, weaknesses, opportunities and threats. It is used to
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devise a strategy by identifying internal factors such as strengths and weaknesses of an
organisation and external factors such as opportunities and threats for a company. SWOT
analysis of Ford motors are given below:-
Strengths: These are all factors and elements that gives a company an additional
advantage over its competitors. EE owns a powerful distribution channel. It covers every state of
UK because of its large quantity of outlets. Its products are easily accessible to the consumers
because of its strong distribution network which cover wider areas and replenish its stock on
time. Another strength of EE is that its products are pocket friendly. They are cheaper enough
that customers can easily afford. Company maintains a good bonding with dealers. Dealer also
helps in promotion of its goods and services along with its core responsibility (Matt, Hess, and
Benlian, 2015).
Weaknesses: These are all the qualities and resources that company lacks. These are
areas of improvement for the company. Weaknesses are all the present of undesirable quality or
absence of desirable quality which can mark a dent on company's image. Budget allocation
towards research and development is very less compared to its competitors although company is
outlying money in research and development more than than mean industry expenditure.
Majority of firm's property on its operate its functions are rented rather than owned which leads
to large amount of profit drain out in paying rent. Per day sales stock is very high because
purchasing and selling inventory is a very time consuming process for EE. This flaw contributes
in extra expenditure of capital.
Opportunities: These are uncontrollable external factors which are favourable for the
company's growth. Company can take advantage of internet penetration by establishing its
presence online. Firm can make dynamic and interactive website to promote its business. EE can
use social media for lead generation and promotion. Technology is becoming advanced in a fast
pace. Organisation can reduce cost and increase accuracy through use of automation. Technology
can also aids in consumer research by accumulating data of customers through data science and
marketing of products accordingly. Inflation rate is favourable for the organisation as there is
moderate inflation in the country which leads to low price of input (Linder, and Williander,
2017).
Threats: These are all the external factors which create barriers towards growth of an
organisation. These factors and elements are uncontrollable and unmanageable. No proactive
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development of innovative products. All innovative products are being made as reaction to rival's
products. Steady revenue of the business attract many new competitors which create a scenario
of intense competition in the industry. As company is globalising its business its profits suffer
from currency fluctuation from many politically unstable countries.
VRIO Analysis
It is a framework used for analysing internal resource of an organisation. It was
developed by Barney JB in the year 1991. This framework determine four characteristics product
should have in order to sustain in the market. The four must have features of a product are
valuable, rare, expensive to imitate and lastly organized to capture value. Here is VRIO analysis
of EE company:-
Valuable: It is a query which examines whether resource adds value to the customers or
not. If reply is true than company can ensure its sustainable growth in the market. Financial
resources of EE are highly valuable because it helps in taking advantage of profitable investment
opportunities. These also defend company from external menace. VRIO analysis exhibit that
company's human resource are also worthy. They are highly skilled and their expertise render
competitive advantage to the company. Firm's local food products are also valuable to some
extent as it unique and easily differentiated. Patents of EE is also valuable resource as it helps in
combat competition. Research and development is not a valuable resource of EE because return
on investment is very low. R&D did not create enough innovative products which can prove its
worth (Hart, Sharma, and Halme, 2016).
Rare: These are all the resources found in scarce quantity. Financial resources of EE are
considered to be rare as very less companies have such strong financial resources. According to
VRIO patents of EE are also rarely accessible. Other companies cannot use patents of EE.
Another rare resource of EE are its distribution network because it is very difficult establish as it
needs huge investment and time. Food products are not treated as rare as many competitors are
able to provide similar food products. Workforce of EE are considered as rare resources as they
are highly trained, skilled and possess distinct expertise (Wu, Straub, . and Liang,, 2015).
Costly to imitate: If resource are difficult and expensive to copy than they are
considered as costly to imitate resources. Here also financial resource of the company are tough
to imitate as company able to obtained these by years of profits. Food products of EE are not
expensive to imitate. Rivals can easily make same kind of food products by small amount of
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investment in research and development. Patents of EE are treated as costly to imitate because
there is a legal restrictions on the copying of patents. On the other hand resources which are not
costly to imitate are company's employees as other companies can also impart training and
development program in order to make the highly productive with distinct expertise. The rival
companies can also recruit highly talented employees from pool of applicants. Competitors can
motivate employee by offering high annual package, incentive and perks (Yuliansyah, Gurd, and
Mohamed, 2017).
Organised to capture value: If company is organised properly than only it can take
advantage of its resources. Firm is required to organise its management practices, administration,
policies, work culture, organisation framework and so on. Financial resources of EE is highly
organised therefore it is capable of taking advantage of resources. It utilize the opportunities and
fight with hazards efficiently. It is used to do correct investment which yield profit. The patents
of organisation did not fulfil this criteria. Company does not takes the full advantage of their
patents (Marx, 2015).
TASK 3
P3 Evaluation of Micro Environment with Porter's Five Forces Model.
Porter's five forces model is a strategic management tool that helps in analysing the
competitive edge of certain industry. Each component of this model justify the strengths and
weaknesses that helps strategic analyst to understand hidden potential to earn more profits with
in industry and to sustain its core competencies. The advantages of each force is differ from
industry to industry with different perspective of profitability and attractiveness. This model is
particularly used to examine the internal environment of industry where an organization is
operating its business.
1. Threats to New entrants: New telecom organisation can bring differentiated
communication services which brings innovation in telecom industry. This may create
pressure on EE telecom because new brand company may introduce their product at low
rates with high value preposition. EE can handle this force by inventing unique services
which attract new customer and retain existing one by giving them reason to buy. The
impact of this force is moderate because it might happen that customer may switch over
other telecommunication brand.
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2. Buyer's Power: consumer demands more at minimum price as much as possible. They
want to spend less over high quality product or service. This sometime create stress on
long term profitability of EE limited. If company has small and powerful consumer base
then there are chances of higher bargaining power of buyers in such case customer can
easily negotiate with prices. Since, EE limited enjoys large segment of customer base
then the impact of this force is low within industry. Firm produce quality products due to
which buyers buy the same frequently without considering its price (Chen, Eshleman, .
and Soileau, 2017).
3. Supplier's Power: In telecom industry, there are numerous suppliers from which number
of similar companies purchase its raw material. If suppliers are dominated can influence
adversely over profit margins of EE limited and can easily negotiate over rates with firm.
EE limited can construct strong and effective supply chain management with wide range
of suppliers. The affect of this factor is low over following firm because suppliers offer
normal standard product with less differentiate features at similar cost which is
favourable for EE to change or switch their suppliers.
4. Rivalry among Competitor: If there is strong competition between the rivals within
telecom industry then it may decline rates of products that affect overall profitability of
company. The impact of this force is sometimes high because EE limited operates its
functions in a high competitive communication industry. To handle this problem
company can frame out strong competing and can make powerful alliance with its strong
rivals so that company obtain effective information and resource for better production.
5. Threats of substitution: When there are identical products and services available in
market and users get options to purchase particular item it creates threat for existing
organisation. When good or service satisfy customer's demand in different manner then
influences profitability of EE limited. The impact of this force is low as there are very
little substitute of high quality accessible in market but at expensive rates which is
favourable for EE limited to sustain its competitive position.
P4 Introducing new marketing plan
Ansoff Matrix
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It is a strategic tool used to determine appropriate strategy for expansion of a business.
This model proposed four business strategy that are market development, market penetration,
product development and diversification.
Market Development: In this strategy, company move into new marketplace with their
existing products. Company attempt to capture new regions, age group and income group. This
strategy is appropriate when company owns an advanced technology product that is profitable to
launch in new market. Market development strategy can be implemented in various ways like
render the goods and services to new demography of the country. Launching products in new
geographical regions of the country. Supplying goods and services in a foreign country.
Market Penetration: This is a strategy in which company promote their existing
products in existing market. The main objective of this strategy is to increase market share and
beat the competitors. Market penetration strategy can be executed in several ways like reducing
prices of products in order to fascinate more customers. Using sales promotion strategies like
distributing discount vouchers, freebies, coupons and so on. It can also be implemented by
acquisition of rival company of the same industry.
Product Development: It is a strategy in which company launches new product in the
existing marketplace. Before launching of new product company conduct extensive research on
consumers in order to identify their needs. This strategy includes elaboration of current range.
This strategy is mainly used when company have thorough understanding of existing
marketplace and capable of satisfying needs of customer through forward-looking solution.
Product development strategy can be implemented by forming strategic alliance with other
companies in order to seek access to each other distribution channels. For example, Cadbury
introduce Bournvita little champs the kids below aged below five years.
Diversification: It a strategy in which company introduce new product in the new
product. It is the riskiest strategy because firm loses focus on cor product. It has been employed
to take advantage of new market by entering into the new industry. Diversification is of two
types that are related diversification and unrelated diversification. Related diversification
involves the launching of new product which has a link with existing product in any form. In
unrelated diversification, firm launches new product which has no connection with previous
product.
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From the above mentioned strategies, diversification is the best suitable for EE. Company
should adopt related diversification strategy. It needs to manufacture devices related to mobile
phones such as power bank and charger adapter.
New Business Plan
Company Overview
It is UK based telecommunication company which provides mobile network and internet
services. It is a subsidiary of BT group. It was founded in 2010. It was a joint venture between
Deutsch telecom and France telecom. It was later acquired by BT in the year 2016.
Vision
Company's vision is to render best network and services around the globe to gain
customer's trust.
Mission
Mission of the company is to become largest telecommunication service provider of the
world.
STP Approach
STP stands for segmentation, Targeting and positioning. It is a strategical tool used to
determine the customers which accept the new product and the perceived image of respective
customers towards the product. Here is the STP model of power bank and charger adapter.
Segmentation: It is the procedure of dividing the whole population into different
segmentation. Segmentation are of four types that are demographic, geographic, socio-cultural
and psycho graphic. Demographic segmentation divide the consumer on the basis of their
income, gender, occupation, education and so on. Geographic segmentation divide the
population include different geographical region such as rural and urban, cold and warn region,
developed and developing region and so on. Socio-cultural segmentation includes culture, belief
and values of an individual. Psycho graphic segmentation involves lifestyle, taste, preferences
and mindset.
Targeting: Targeting means selecting right consumer base for offering products and
services. In case of EE limited the target customers will be all youth operating mobile phones.
Middle income group of both gender. Covers mainly urban areas of whole country. EE target
mainly those customers who use mobile for long hours. Users who used to travel enough needs
power bank.
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Positioning: It is method of delivering a specific image in the minds of consumers
towards the company's product through advertisement and other promotional activities. The
positioning of EE limited power bank will be a beneficial device for those consumer who travels
very often.
Monitoring and Evaluation
Monitoring and evaluation techniques used to examine whether product is successful in
the existing market or suffering a failure. The two of the best monitoring and evaluation
approach are benchmarking and feedback. Positive feedback by consumer determine success of
the product and vice versa. Benchmarking is a tool in which company set target and work hard to
achieve it. Company's success ascertain by distance from the benchmark rate.
CONCLUSION
The above report drives the conclusions that macro environment of the country are
somehow favourable for the company. Firm have several strength and several improvement on
which it should work. Internet penetration is the good opportunity for the company. Intense
competition is a threat for the organisation. Firm is facing from threat from suppliers and
competitors. According to Ansoff matrix diversification strategy is appropriate for the company.
In diversification strategy company launch new product in new market. Launching mobile
related devices such as power bank and charger adapter is fruitful for the company.
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REFERENCES
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