Business Strategy: Analysis of Macro Environment and Internal Capabilities

This report analyzes the impact of macro environment on organization strategy and evaluates the internal environment and capabilities. It also discusses Porter's five forces model and its evaluation.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Applying of the appropriate frameworks to analyse the impact and influence of macro
environment on organisation strategy.........................................................................................3
M1 Analyse of macro environment for determining and inform strategic management
decisions......................................................................................................................................5
P2 Analyse of the internal environment and capabilities by utilising appropriate frameworks. 5
M2 Evaluation of internal environment for assess of strength and weakness towards
organisational capabilities, structure and skill set.......................................................................8
TASK 3............................................................................................................................................8
3.1 Porter's five force model and its evaluation .........................................................................8
M3 Appropriate strategies to improve competitive edge and market position.........................10
TASK 4..........................................................................................................................................10
P4 Range of theories, concepts and model to interpret and make strategic planning...............10
M4 Strategic management plan including tangible and tactical strategies...............................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategy can be defined as a working plan which leads management to
accomplish their vision, objectives, goals with in an appropriate manner. The main motive for
formulating an effective strategy is to develop an effective plan that leads management to
complete their action in decided time period. This report is written from the perspective of
Debenhams which is an British multinational retial organisation. They operates large number of
departmental stores in which they offer large variety of products. Moreover, this report
highlights on the analysis of external environment of an organisation (Amran and et. al., 2016).
Along with this organisational audit will also be conducted in the report. VRIO framework and
the Porter's five forces are also included and focused in the upcoming report. In the last, to
understand growth strategies Bowman's strategy and Porter generic strategy will also consider in
this report for making an effective strategic planning.
TASK 1
1.1 Applying of the appropriate frameworks to analyse the impact and influence of macro
environment on organisation strategy
PESTLE is one of the most effective tool that leads organisation to understand the external
environment in which the company is operating their business. In order to identify actual aspects
management focused on political, environmental, social, technological, legal and environmental
factors. So better results will be achieved by the organisation in the UK market. The main motive
to implement PESTLE analysis is to generate long term benefits by monitoring overall aspects of
macro environment.
Political factor- The government or parliament of UK is one of the most powerful and
stable country because all cities of United Kingdom are developed. Due to which it is easy for
management to follow modern democracy which is organised and controlled by Head of the
State. Moreover, in the context of Debenhams, business strategy are not impacted because of
better stable political conditions in UK. Further, its strategy are influenced by political decisions
such as change in the tax policy helps the management to formulate better results for
organisation. Its results this is easy for the management of Debenhams to generate long term
policies according to the government rules and regulations. Due to which better results will be
achieved by the management in the future (Ghezzi, 2013).

Economical factor- In the present economic is an essential aspects for the organisation as
well as country. This determines that economic is one of the most important factor for the
country. As it leads management of Debenhams to perform their work as per the economical
aspects. Like in the context of UK, Brexit impacted on the strategy of all business as the
economic slow down impacts on business operations. This results it essential for management to
perform their work by formulating new strategy by considering all aspects of economic. In order
to influence economic as a positive manner (Hoejmose, Brammer and Millington, 2013).
Management must generates strategy which leads organisation to enhance the sale of products.
Social factor- In the present scenario, there are large number of multinational
organisation are performing their operations in UK. As the density of UK population its
individuals belongs to several backgrounds. So the strategy of business is impacted i.e. as people
not accept those products which affect on the social value of society. Along with this majority of
the UK population is highly educated so the strategy of Debenhams is not impacted. Further, to
influence business strategy management focuses on the market needs and society value for all of
its operations.
Technological factor- Technology is one of the most important factor for organisation
because it is impacting on all types of business. In the context of retail industry large number of
business operations are impacted as well as influenced by technological aspect. UK is a
developed country due to which majority of the companies implement innovation feature in their
operations. So better results will be gained from the organisation. In order to influence policies
and strategy of business it is mandatory for management to enhance their work performance in
appropriate manner (Köseoglu and et. al., 2013).
Environmental factor- Environment is one of the most important aspect for management
like they are performing their work at global level. This is mandatory for Debenhams to perform
their work in essential manner so it is easy for management to gain competitive advantage in
market. In order to achieve better position as compare to rival organisation management is more
focused towards influencing their strategy towards environment perspective. CSR practices is
one of the best example of environment factor.
Legal factor- Rules, regulations, laws and legislation are some of the most important
aspects that came under the aspect of legal factor. The major motive to formulate legal aspect is
to perform the work as per management considerations that is used to protect the rights of local

individuals. Anti-trust law, trade barrier act, monetary policy are some of the part that majorly
impact on business strategy. On the other side, to influence business strategy management is
more concerned towards influencing their work for long term benefits.
By all above aspects it is concerned that there are large number of task are performed by
management to gain top position in the market. It determines that it is mandatory for business to
monitor all aspects of management as it increases the performance of organisation in effective
manner. Therefore, Debenhams must enhance their number of operations due to which better
results will be outcome for the organisation (Köseoglu and et. al., 2013). Along with this them
major benefit which is gained by management is that they are able to perform their work in
effective manner because it not impact and influence on its strategy.
M1 Analyse of macro environment for determining and inform strategic management decisions
PESTLE is a tool or method that consider all aspects which are related with the
surroundings of organisation. In the present scenario, it is easy for management to gain
competitive advantage by performing their work according to the strategies. Like with the
concept of political factor it is easy for management to manage the work as per political
regulations. Economical decisions are another aspect which impact on organisational strategy
such as inflation and interest rate. Social aspect leads management to perform their work as per
interest of society individuals. So management decisions of business are not impacted and
enhance work policy for organisation (Langabeer and Champagne, 2016). Further, to make
organisational decisions in appropriate manner it is mandatory to make all strategies as per
conditions of market.
P2 Analyse of the internal environment and capabilities by utilising appropriate frameworks
In order to understand, the internal strength and weakness of organisation it is mandatory
for management of Debenhems to implement SWOT analysis which is mention as follow:
Strengths Weaknesses
 The brand image of Debenhems is
increasing with rapid speed due to their
effective promotional strategies.
 Retail industry al large variety of
 Most of the individuals or consumer of
Debenhems are not satisfied with the
quality of products. So it is a major
weakness of organisation.

products which are offered by the
companies in their stores. It undertakes
clothing, food items, cosmetic and
home products so wide area of market
is covered by them (Lehmann, 2016).
 Resources and the raw-materials which
are used the Debenhems are low in
quality which provide advantage to
competitive organisation.
Opportunities Threats
 Debenhems has the opportunity to enter
into the market of developing countries.
It refers that large number of potential
customer's are present in market.
 By investing more in the production
and marketing activities of organisation
it is easy for management to approach
large number of customer's effectively.
 If the organisation enters into a new
market then political conditions, market
threats etc. are some of the major
threats by which organisation
performance is impacted.
 The is intense competition in the retail
industry is faced by management due to
which their performance is negatively
impacted by management.
VRIO framework for the organisation
In the present scenario, there are large number of challenges are faced by management
due to which it is mandatory for the to analyse the organisational strength. So better results will
be gained by management. On the other side, by analysing the weaknesses of organisation it is
easy for Debenhams to consider all those aspects which is impacting on organisational
operations. VRIO framework in context of organisation is mention as follow (Maté, Trujillo and
Mylopoulos, 2012):
VRIO framework
Valuable
 The major valuable item for the Debenhams is their financial resources because it helps
management to enter into external opportunities by investing high finance into new areas. Another major valuable products for the organisation relates with their local food
products. As they are developed with motive of providing high value in its products.

Rare
 Financial resources of the organisation also works as the rare resource for management.
This determines that strongly financial resources is only possessed by some small
number of companies (Moseley, 2017). Employee's of the Debenhams is the another part by which organisational performance is
improved. This determines that better performance is gained by management with the
help of effective employee's.
Imitable
 On the other side, it is easy for organisation to perform their work as per management
results to determine their work in effective manner. With the local food products it is
also analysed by management to consider the work in order to identify better profits for
organisation. The employee's of Debenhams plc is also used by management to perform the work in
getting long term benefits. It is also required to gain better results by significantly
entering into the experience field.
Organisation
 Financial resources of the Debenhams plc is to increase and getting better value for the
management results. So with the strategically for investing better places in the
organisation.
 Patents are the major part for organisation due to which it is easy for manages by
enhancing long term benefits that it is used to make patent about the products through
developing in innovative way.
Strategic capabilities and their key components
The term strategic-capabilities can be defined as the process that is used to make effective
strategies in order to shape them in effective manner. This is also used by management for
generating major benefits against the competitors. The strategic-capabilities consists of six
different components that are value, vision, analytical tools, key goals, action planning and
purpose (Oldman and Tomkins, 2018). It results long term goals will also be achieved by
organisation for getting long term results.
Stakeholder matrix and mapping

Stakeholder mapping refers to the visual process that is used for laying out all
stakeholders related with product, project and idea. The benefit of stakeholder map for the point
view of Debenhams relates with visual representation. In context of relation of organisation with
matrix it is used to work as the part of an own organisation. This results Debenhams and
stakeholders both are benefited through communicating with each other in an appropriate
manner.
Resource based view strategy
Resource based strategy can be defined as the framework that is utilised by the
organisation for getting better results and to utilise strategic resources in an effectively manner.
This results it is easy for organisation to gain better sustainability in the market which leads
Debenhams to gain top position in market. It results that management is able to gain competitive
advantage in market. Along with this there are two kinds of resources are present in market
which are tangible and intangible. With the proper organised resources it is easy to enhance the
market size and profits for organisation.
M2 Evaluation of internal environment for assess of strength and weakness towards
organisational capabilities, structure and skill set
By analysing all organisational goals it is identified that Debenhams is performing their
work at global level. The main motive within an organisation is to get long term benefits by

conducting financial factors as it work as major strength for management. So in the context of
organisation structure is will be more better. Whereas, with the analysis of VRIO framework it is
analysed employee's of organisation are imitable and rare. This results that the capabilities and
skills of management will be improved in effective manner (Oldman and Tomkins, 2018). So
with the major strength and overcome from weaknesses it is easy for organisation to gain better
results by formulating effective strategy to perform their operations.
TASK 3
3.1 Porter's five force model and its evaluation
Porter's five forces works an effective tool that provides various benefits to organisation
such as identifying and analysing all the competitive forces that are beneficial to gain
competitive edge in industry. This also helps the management to analyse all the strength and
weakness that is related with the industry competitiveness. Therefore, by determining all the
loopholes of industry it is easy for management to gain long term benefits in the organisation. In
the present scenario, this is also used by management to perform their work is to perform their
work for generating long term benefits by considering the aspects of industry. To analysing all
aspects management is more focused towards getting the desired results for organisation by
making appropriate strategy for its operations. In the context of Debenhams Porter's five forces
to match organisational strength and weakness is mention as follow:
 The major benefit for organisational success is to gain better results and to formulate
better policies and strategies as per the existing situation of industry.
 Along with this the another benefit which is gained by management to make better results
is to perform their work in better way.
Threat of new entrants
Their are large number of organisation are performing their work in the retail industry at
small as well as large level. It determines that the competition among the companies is too
intense. This also governs that wide area of market is totally covered by organisation which are
large in size. It also determines that with the proper management of organisation resources better
results will be gained by Debenhams such as high investment provides better advantage to
organisation (Scholes, 2015). It also governs that the power relates with threats of new entrants is
low. So by developing better needs and conditions it is easy for organisation to approach the

consumers through their innovative products. Therefore, the new companies face difficulties to
perform their operations as it is complex for them to manage the work in appropriate manner.
Bargaining power of suppliers
Majority of the retail companies such as Debenhams and other buy their raw-materials
from different businessperson. It also governs that all retail organisation whether small or large
purchase raw-materials to complete their operations as well as to convert semi-finished goods
into products. But there are very few organisation that are performing their work at a large level.
So the bargaining power of the suppliers is low. This determines it is essential for management to
perform their work in effective manner. Like to complete the work in exact manner management
must focus on the bargain power of supplier.
Bargaining power of buyer
Consumers as well as buyers are the essential stakeholder for organisation that demands a
lot from the company to get long term benefits. The main aim to understand the bargaining
power of buyers is to get the whole knowledge about customer's. This results it is easy for
organisation to sustain for longer period if the management deal with customer's in appropriate
manner. Moreover, the whole industry and companies are facing challenges related with the
customers (Scholes, 2015). As if they ignore customer's needs then it is complex for organisation
to gain better results and factors because the bargaining power of the buyer is high in market. So
in order to deal with this aspect Debenhams formulates products that satisfies needs of
customer's effectively.
Threats of substitute products and services
Substitute products refers to those things that are offered by other organisation in the
market. This impacts on the Debenhams as it is difficult for management to reduce market share.
Like due to insufficient supply of products on constant basis, substitute products enhances its
sales by satisfying the needs of customer's. It also determines that the approach of substitute
products is high in market. So the power of substitute products is high. Further, the retail
industry is product oriented. Hence, by approaching customer's with their services it is also easy
for management to gain better results in the market in shorter periods (Tansey, Spillane and
Meng, 2014).
Rivalry among the existing competitors

Competitive and industry challenges developing too many complexity for Debenhams as
they impact on organisational operations. As in the context of Debenhams, they are operating
their business in retail industry and there are large number of organisation are already performing
its operations in retail industry. So rivalry approach is high in market Therefore, to ensure long
term benefits it is essential for management to consider better strategy and approach for
management to gain high results. Further, to capture high market management must differentiate
products in order to gain market area.
M3 Appropriate strategies to improve competitive edge and market position
Business strategy is one of the major tool for organisation that enhances the business
profitability by managing all resources in effective manner. Along with by monitoring all the
needs and wants it is easy for customer's to enhance their work performance as well as to
complete the work as per needs of organisation by analysing the industry and its power. The
bargaining power of suppliers and buyers is high so to manage better results it is essential for
management to complete their work in effective manner (Tassabehji and Isherwood, 2014). On
the context of low approach for industry it is essential for management to complete their work as
per management needs.
TASK 4
P4 Range of theories, concepts and model to interpret and make strategic planning
The main motive of organisation is to perform their work at global level with proper
efficiency and effectiveness. With the implement of Porter Generic strategy it is easy for
management to analyse the firm profitability as well as to gain better results in easy manner. The
aspects of Porter Generic strategy are cost leadership, cost focus, differentiation and
differentiation focus. All the essential aspects are mention as follow: Cost leadership- Debenhams is one of major organisation in retail industry, it governs
that there are various task are performed by management. This is also used to gain better
results and to increase the size of business by determining the cost of products in
effective manner. Along with this there are various task are also managed to enhance
their work performance. In the context of Debenhams cost it is an essential factor for
organisation due to which long term benefits will be achieved by management. Marketing

strategy as well as the elements related with business factor must be used to make
effective decisions by utilising cost in appropriate manner (Tsolakis, 2015). Differentiation- According to the differentiation strategy the organisation undertakes
various aspects that leads organisation to perform their work as per management industry.
In the differentiation strategy the firm must seek those value in their products due to
which it is easy for management to gain long term benefits and attributes by
demonstrating its products in effective manner. This is also used by management of
Debenhams to perform their work as per management strategy to meet them in proper
manner. The major benefit which is gained by management with the differentiation
strategy is to earn more profits. Like it leads management to sale products with premium
price. Focus- Porter's generic strategy consider the focus aspect in the organisation due to
which long term benefits will be gained by management. Their are various task also
completed for managing the work possibilities and to increase business size by
segmenting the industry and the market on geographical and demographical basis. Target
market must be included in the projects and operations of Debenhams. Therefore, with
the cost focus strategy it is easy for management to perform their work according to the
market strategy.
 Differentiation focus strategy- The major motive of the differentiation focus strategy is
to complete the work as per managing their needs that is used to pursue long term
benefits as well as to focus on market segment that simply perform the work as per
considering to manage their brands with unique methods. With the motive of managing
their work as per management focus it is easy to enhance their sale.
Bowman's strategic clock
The Bowman strategic clock work as an effective model that helps business organisation
to explore and make appropriate positioning for strategies. Example- Debenhams provide large
number of products in the market that leads organisation to gain better results as it lead
management to increase their size and to gain competitive advantage effectively (Utami and
Lantu, 2014). All aspects related with the framework of Bowman's are mention as follow:

 Low price and value- This position is not effective for Debenhams as it is related with
low market area. It governs that the value for consumers products is less due to which the
quality of products is also less.
 Low price- Debenhams are performing their work at global level so with reducing the
prices of products it is easy for management to increase their sale. It results overall profits
of the organisation will be improved in appropriate manner.
 Hybrid- With this strategy, elements related with low price and product differentiation
will also be included in this report. So it works as an effective strategy that enhances
work performance in effective manner among all situations.
 Differentiation- As per this strategy, Debenhams focused to make clients for increasing
sale of products with different methods.
 Focused differentiation- In this products are placed at high level in order to contain
better value in products. Like it is used by management to increase brand image at global
level (Yoffie and Cusumano, 2015).
 Risky high margins- All the margins that are decided by management undertakes high
risk. It refers that with previewing all aspects more value will be added in report.
 Monopoly pricing- In a monopoly business the price of products are high as it is used to
manage high prices for their products.
Price leadership strategy- The situation of price leadership strategy refers to a situation in which
an organisation dominant its industry by deciding price of products. In the context of Debenhams
price leadership strategy is not effective because it is performing their work in retail industry.
Within UK there are various large organisation exists that also reduce price for not reducing its
market area. For instance- if management reduce price than other organisation provide reward
and offer to customers and also reduction in price for not switching customers towards
competitors.
Focus strategy- This refers to a marketing strategy in which an organisation concentrate about
resources for expanding its market to achieve specific goals. In context of Debenhams
management utilise focus strategy that is usually employed and formulate products for an exact
segment for satisfying need of customers in an appropriate manner.

M4 Strategic management plan including tangible and tactical strategies
Strategic planning leads an organisation for identifying and formulating proper set of
activities, resources, operations etc. This ensures that people of organisation are performing their
work as per decided plan. Debenhams plan is mention as follow:
Vision- To attain the top position in market by providing better quality products to its
customer's.
Mission- Mission of the organisation is to develop long term benefits through enhancing their
work performance at global level.
Strategies- This strategy is used by management for developing better capabilities that is used to
make core competencies for their products. With this approach it is easy for management to
provide better support as per management strategies (Zalengera and et. al 2014).
Tactics- Tactics refers to those efforts which are developed by organisation to achieve their
objectives in short period. Marketing mix is one of the major tactics that is followed by
Debenhams it is mention as follow:
Product Home care products, cosmetic items, food etc. are the major products that are
offered by retail industry. So by enhancing the quality of services and products it
is easy for Debenhams to enter in new market.
Price Retail industry is facing tough competition in market so by enhancing better
results it is essential for management to decide affordable price of products.
Place Organisation are performing their work at global level so they are large number of
physical evidence are managed by Debenhams.
Promotion Promotion mix is an effective strategy that leads an organisation to promote their
products at global level. For this print and social media are major tools for
organisation.
CONCLUSION
According to the above strategy it is analysed that with adopting and implementing
business strategy. It is easy for management to achieve their desired goals and objectives in
effective manner. Along with this SWOT, VRIO, PESTLE are some of the tools that are used by
management to understand the micro and macro business environment of organisation. This
results it is easy for management to complete their work by implementing deep knowledge in the

organisational operations and functions. Along with this by implementing Porter's five forces
better strategies will be developed in organisation.

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