Impact and Influence of Macro Environment on Business Strategy

This report discusses the impact and influence of macro environment on business strategy, specifically focusing on Jaguar Land Rover plc. It covers the external factors that can affect the company, such as political, economic, social, technological, legal, and environmental factors. The report also analyzes the internal environment and capabilities of the company, including a SWOT analysis and VRIO analysis. Additionally, it explores Porter's five forces model and strategies to improve market position.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Impact and influence of macro environment.........................................................................3
M1 Critical analysis of macro environment................................................................................5
TASK 2............................................................................................................................................5
P2 Internal environment and capabilities of business.................................................................5
M2 critical evaluation of internal environment...........................................................................7
TASK 3............................................................................................................................................8
P3 Porter's five forces model.......................................................................................................8
M3 Strategies to improve market position..................................................................................9
TASK 4..........................................................................................................................................10
P4 Theories for strategic planning............................................................................................10
M4 Strategic management plan.................................................................................................11
D1 Critique and interpret information to produce strategies....................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy is a set of plan which is to be executed by taking appropriate decisions
and actions so that company goals are achieved and a competitive advantage can be gained in
market. These strategies help company in attracting more number of customers and dealing with
competition in an efficient manner so that the company vision and mission are successfully
achieved and it can sustain in market over a long period of time (Amran and et. al., 2016). There
are two types of strategies i.e. generic or general strategies and competitive strategies which can
be applied by company so that the functions and operations of business can help in achieving
company objectives. These strategies help in adjusting prices competitively, acquiring new
businesses, differentiate products etc. In this report Jaguar Land Rover plc is taken which is a
British multinational automotive company which was founded in 2008 and is headquartered in
UK. The company exclusively offer premium and luxury sport utility vehicles which provides
high class experience to customers. In this report the internal and external environment of
company, analysis of its competitive market environment, strategies which can be used, strategic
plan etc. will be discussed.
TASK 1
P1 Impact and influence of macro environment
Macro environment are the external and uncontrollable factors which affect the business
and influence its decision-making and strategies which affects the company productivity and
performance. It is important that these factors are analysed regularly by the company which can
help it in identifying their probable negative impact on business and also help the company in
making proactive strategies so as to deal with the impact. Following are the external factors
which can affect Jaguar Land Rover plc:
PESTLE analysis Political: Political factors are related to the rules and regulations which are formulated by
the government of country like tax regulations, trade tariffs, fiscal policies etc. which
affect business operations. UK is a politically stable country which helps the company in
expanding in market and also implement competitive strategies. However the uncertainty
in Brexit can affect company sales and will also lead to elimination of many employees
in company might lead to a decrease in its goodwill in market. The positive affects of

UK's political environment is that the government support manufacturing companies
which can help in the expansion and growth of company in market (Chiang, Chen and
Ho, 2016). Economic: Economic factors are related with GDP, interest rates, inflation rate etc. of the
country which affect the purchasing power of customers and also affect the prices of raw
materials available in market. UK has a growing economy which is beneficial for
company expansion in market and also as the purchasing power of people in UK is high
the company can maintain premium pricing of its cars which help it in making huge
profits. However due to the high uncertainty in Brexit there can be a depreciation of value
of money which can affect the pricing policy of company and the car prices might further
increase. Also the company might start dealing with the US so that the price of cars can
be moderated which can help in managing its sales. Social: These are the factors which are associated with the society of country and
includes lifestyle, demographics of population, culture, religion etc. of the people of
society. The people in UK have a high living standard which is beneficial for Jaguar Land
Rover plc as it can sell its premium cars in the market where a large number of buyers are
present. This help the company in increasing its sales and also introducing new features
in its cars so as to attract a large number of customers. However as the concern of people
towards global warming is increasing and they are moving towards eco-friendly products
like electric cars, the company sales might get affected with this. Technological: These are the factors which affect technological advancement and
frequency of R&D which is done in technological sector in the country. UK is a
technologically advanced country which means that highly advanced technology is easily
available in country and at lower rate. This help the company in acquiring high level of
technology which can be used in increasing its efficiency and performance in market and
also help in attracting a large number of customers. With the help of technology highly
advanced features can be installed in cars which increase customer satisfaction and also
help the company in gaining a competitive advantage in market. However as the
technology is available easily many car companies are using them so that they can
increase their customer base in market (Guillén and Capron, 2016).

 Legal: These are the factors which are related with laws and legal framework of country
which also affect the working of company so that they can legally exist in market. These
laws are to be followed in company so that the interest of customers can be protected,
ethical and CSR practices can be followed, interest of all the stakeholders can be
maximised etc. The legal structure of UK is followed strictly by Jaguar Land Rover plc
so that it can take care of the interest of all its stakeholders in an efficient manner which
help it in attracting customers and become a trust worthy brand in market.
Environmental: These are related to the environment of country in which company operates and
is affected by the resource availability, terrain, environmental regulations etc. These
environmental regulations must be followed by car manufacturing companies so that pollution
can be controlled and environment can be protected against any misuse. Jaguar Land Rover plc is
working towards forming energy and fuel efficient engines which do not affect the environment
and also the fuel consumption can be reduced. This helps the company in attracting customers
and creating a positive impact on the environment (Jaber and et. al., 2015).
M1 Critical analysis of macro environment
Macro environmental factors are the external factors which affect business strategies as
they have to be changed so that the negative impact of these factors can be minimised. The
macro environment must be timely analysed by businesses so that effective steps can be taken
and decisions can be made which can help them in dealing with competition in an efficient
manner. It is important that Jaguar Land Rover plc analyse its external business environment so
that the level of impact which is caused due to external environment can be analysed and
efficient strategies can be formulated which can help it increasing its competitiveness in market.
TASK 2
P2 Internal environment and capabilities of business
Internal environment of a business are the elements of company which can be changed
and controlled and is affected by the organisation culture, structure, management, leadership
style etc. These factors affect the strategies which are formulated by company so that they can
survive in competitive marketplace and increase their sales. The internal environmental factors
and capabilities of company can help it in taking maximum advantage of its positive factors
while reducing the negative effects so that it can successfully survive market (Knott, 2015).

SWOT analysis: It is used by the organization in order to identify the strengths and weaknesses
of the own firm and accordingly strategies can be farmed to enhance the loop area. It also aid to
capture the opportunities prevailing in the open market and turning them into their business
profit.
Strengths Weaknesses
 It is a luxurious auto mobile
manufacture in the market. Over the
years organization is able to create
good brand image in the eyes of the
customers by their eye catching product
and services.
 The advertising procedures is good.
Due to which customers gets attracted
easily and make up their mind to
purchase it. It results in more sales
ratio.
 Jaguar Land Rover has limited range of
car models due to which they are able
to capture low market ratio.
 Goodwill of the organization reduced
after acquisition by Tata. This is
because it has raises issued related to
labour union.
Opportunity Threats
 Hybrid model of the company is
untapped in the market.
 Business can explore more in SUV
segments.
 Competition from other luxury brand is
the biggest threat for Jaguar.
 The increase in cost of fuel in future
along with the threat of electric car
vehicles being introduced by the
competitors of company.
The other tool which can be used by company so as to assess the company's internal
environment is VRIO analysis which helps the company to analyse their resources so that a
competitive edge in market can be gained. This model can help Jaguar Land Rover in analysing
the internal capabilities of company so that their competitiveness can be enhanced in market.
VRIO analysis of Jaguar Land Rover Value: The company manufacture cars which help in meeting customer expectations in
an efficient manner and also give them high value for their money. The cars have

luxurious designs and have an exceptionally remarkable performance on road which
make the company most reliable, competitive and successful in market. The increase in
value which it is able to generate for its customers helps in increasing customer
satisfaction and enhancing company's brand image in market (Marx, 2015). Rare: This relates to the rare features which the company is able to to its customers
which help in enhancing customer experience and increasing the worth of their money
spent. Jaguar Land Rover cars are highly luxurious and are high in quality which are also
installed with highly advanced technology which help in enhancing the customer
experience and building strong brand image in market. Imitable: This factor help in analysing the company products and services based on their
ability of being copied or imitated by its rivalries. The company offer its products which
are of high quality, luxurious designs, are installed with supreme technology and features
which makes the cars highly efficient on roads. These features cannot be imitated easily
by all the car manufacturers as it involves high investment thus this makes the cars of
company highly rare in their features (McDonald, 2016).
 Organisation: This factor help in analysing the managerial systems, policies, culture and
structure of an organisation which help it in using the available resources in an efficient
manner so that high quality cars can be created. The management system and
organisation culture of Jaguar Land Rover is effective which help it in utilising its
capabilities efficiently so that a competitive advantage can be gained.
M2 critical evaluation of internal environment
The internal environmental analysis help the company in evaluating its strengths and
weaknesses so that the capabilities of company can be used in such a manner that it can gain a
high competitive advantage in market. This help the company in formulating strategies so that
market opportunities can be acquired and threats can be minimised. VRIO analysis will also help
the company in using its internal capabilities in such a manner that the value of customers can be
increased and they can produce rare and unique products which give them a high brand
recognition in market and also enhance their competitiveness.

TASK 3
P3 Porter's five forces model
Porter's five force model was discovered by M. Porter in the year 1979. Across the globe
this particular tool is used by business administration in order to examine the degree of
competitiveness in the open market place. On the other hand five forces are effective in planning
and executing the tactics so as to enhance the potential of business concern in the international
market. Porter's Five Force includes, competition in the industry, power of suppliers, power of
customers, potential of new entrants into the industry and threat of substitute products and their
explanation are as follows:
Threat of new entrants: The new entrants is another threat to the organization in the
open market place. In the global market manufacturer of car are new entrants. Lower pricing
tactics are followed by new entrants. This resulted in raising pressure of executing creativity in
the present car, new techniques for modifying changes on jaguar Land Rover (Sarsby, 2016).
Hence, it is required to overcome this challenges immediately as well as need to create tough
benchmark so that new entrants can not meet them easily. The power of new entrants is low
because new entrants requires huge capital in order to make changes in the car. Jaguar Land
Rover is able to tackle the threats of theses entrants by coming up with unique features in the
existing car. By this management is able to attract existing and new client towards their car.
Additionally, more time and finance is invested in the activities related to research so that they
can discourage new entrants from participating in the market.
Supplier Power: In the global market there are several manufacture of car. Almost every
single organization buy raw material from the supplier available in the market. The parts of
jaguar Rover Land are unique and are not easily available in the local market. In this case, the
power of supplier is intense. Supplier who are selling raw material of jaguar car are charging
high prices from the manufacturing companies and are exploiting them to a large extent. It
resulted in low profit margin of Jaguar Land Rover which is negative sign for them. Threats
related to suppliers can be overcome by organization by enhancing their supply chain in the
market (Sircar and et. al., 2015).
Bargaining power of buyer's: In the competitive era customers or buyer are seeking
best quality product and services at low price. In the changing environment it is difficult to full-
fill each and every demand of the customers according to their expectation level. This factor is

creating pressure on jaguar land Rover and it's profitability ratio. In the global market powerful
potential customers has made their bargaining power more intense and seek for discount and
special offers. By constructing their large base it is possible to manage demanding client.
Through this jaguar is able to cope up with bargaining power of buyer. On the other hand
production process and sales ratio raises rapidly. Customer's base can be uplifted by offering
them new models of car , additional features, unique design in car and so on.
Threat of substitutes: The power of substitute in more. The models of eye catching
features and model of Audi, BMW group and Ford are creating a big threat for Jaguar Land
Rover. Theses competitors model are directly or indirectly influencing the productivity and
profitability ratio. Along with this raising demand of electric car is another substitute which are
available for customers . All theses are reducing the demand of car running of fuel. Jaguar Land
Rover can survive and sustain in the market by focusing more on demand of the targeted
customers rather than number of products offered to the client (Son, 2015).
Competitive Rivalry: Organization's productivity and profitability ratio get affected by
the presence of strong competition in the global market. Jaguar Land Rover runs its operations
among the strong manufacturer of car. Due to which margin of profit has reduced to a large
extent. With the help of sustainable product differentiation Jaguar is able to cope up with
competitors prevailing in the open market place. Another way adopted by Jaguar Land Rover to
deal with competitive rivalry is to collaborate with small competitors and to enhance their market
size.
From the above discussion it can be summarized that through this model Jaguar Land
Rover is able to identify the factors which influence growth and profitability ratio of the firm. It
is benefiting the company because by this current trends in the car industry can be identified as
well as opportunities prevailing in the market can be captured for their business growth.
M3 Strategies to improve market position
Porters five force model is adopted by business administration in their working premises
because it directly help to assess the factors affecting strategies of the firm. However, through
this core strengths of the business can be examined so that necessary improvements can be done.
While, weaknesses are also, assesses so that effective tactics can be farmed to improve them. On
the other hand opportunities must be captured on time in order to gain competitive advantages

against rivalry. Management is able to take best decisions with the help of strategies because
they act as road map and aid them to accomplish their set standards on time (Teece, 2018).
TASK 4
P4 Theories for strategic planning
Strategic planning refers to as, firm's management activity of explaining its tactics in
such a way so that set standards of the business can be attained easily. Through this organization
is able to establish realistic goals that are in accordance with its mission statement which need to
be meet in the set deadline. Distinguish concepts, theories and models which can be used for
designing strategic plan.
Asoff Matrix: It was developed by Igor Ansoff. It is explained as, strategic planning tool
which render a framework to aid management of company to frame tactics for future growth and
development. Jaguar land Rover is able to formulate strategic planning because it assist in
business administration to flourish in the global market place. There are four aspects of Ansoff
Matrix which are illustrated as under:
 Market penetration: Through this Jaguar Land Rover is able to sell their existing
product in the current market. By this with less efforts huge profit can be maximized
because customers are market scenario is well understood by the business associates. In
this case, chances of failure is low because each and every aspect is familiar to the
organization (Thompson, Strickland and Gamble, 2015).
 Product Development: In the cut throat competitive world Jaguar land Rover is able to
gain competitive advantages in the open market because business is selling their new car
model in the existing market. By this sales ratio can be raised tremendously and huge
revenue can be maximized. This aspects of Ansoff matrix helps the car companies to gain
huge market ratio in short time duration.
 Market development: In this particular case, present goods are sold in the new and fresh
market. Management need to study the market conditions and customers demand before
entering into the new market with existing product. By doing so large customer base can
be raised for the offering and challenges from rivalry can be overcome easily. On the
other hand there are many models of Jaguar Land Rover which are untapped in the

market . By this business will be able to sell out their car model and will be able to
capture large market share.
 Diversification: This particular strategy includes selling of new product in new
marketplace. It is used by those organization who think that their innovation in product is
able to capture huge market ratio in the new market. Jaguar Land Rover has diversified
its business and has come up with Range Rover Sport P400E which is the first production
plug in hybrid SUVs. It is expensive strategy to be used by the management because it
involves in-depth research and development in the product and services. Along with this
huge capital is needed to commercialize the car in the international market (Woerner and
Wixom, 2015).
Jaguar Land Rover can use market development strategy so that it can efficiently grow
and expand in the untapped marketplace and offer its products in such markets so as to increase
their sales. The company can save the costs of producing new products with this strategy as the
existing products will be offered in new markets which will help in increasing company profits.
Highly luxurious cars which are offered by company provides an opportunity to them to capture
new markets where customers with high purchasing power can help in increasing company sales.
Also the company can use it as an opportunity to explore new markets and increase their global
brand image.
M4 Strategic management plan
This plan can help the company in developing its mission, vision and goals by analysing
the internal and external business environment so that the customers can be offered with products
and services which can help in enhancing customer experience. Strategic plan for Strategic
management plan:
Vision: To become the biggest car manufacturing brand in market and increase its customer base
to become the best in industry.
Mission: To deliver the best products to customers and enhance unique features in company.
Strategies: Market development is the strategy which can be used by Strategic management plan
so as to increase company sales.
Objectives: To increase the sales of company by 30% in the next 6 months.
Tactics: The company sell its products through its stores and other agencies.

D1 Critique and interpret information to produce strategies
The analysis of company's internal and external environment can help in analysing the
factors which can affect growth and development of company in market. Through this analysis
information can be gathered by company related to its strengths and weaknesses so that effective
strategies can be formed and a competitive advantage in market can be gained.
CONCLUSION
From the above report it can be concluded that internal and external business
environmental factors must be analysed by companies so that they can formulate business
strategies which can help them in increasing their sales and become competitive in market. The
company can also use various tools and techniques so that the company resources can be
prioritised and directed towards achieving organisational goals.

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