Impact of Macro Environment on Business Strategies

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO1..................................................................................................................................................3
P1 the impact and influence which the macro environment has on an organisation and its
business strategies..................................................................................................................3
LO2..................................................................................................................................................5
P2 Internal environment and capabilities of a given organisation using appropriate
frameworks.............................................................................................................................5
LO3..................................................................................................................................................8
P3 Porter’s Five Forces model evaluate the competitive forces of a given market sector.....8
LO4................................................................................................................................................10
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
..............................................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy is the formulation of effective plans for a pre decided period of time,
which makes a business competitive at the marketplace. Business strategy play a major role in
planning and development of a business which provides great support to a business. Business
strategy also helps in achievement of desired goals in an organisation which helps in long run, it
is necessary for a business to formulate effective strategy in the market in order to effectively
carry major operations. Most of the successful organisations use business strategy and get a huge
success at the marketplace. In this report influence of the macro environment on a given
organisation and internal environment and capabilities of an organisation is covered. In this
report Porter's Five Forces model is covered along with theories and concepts to assist with the
understanding interpretation of strategic directions available to an organisation using different
models.
MAIN BODY
LO1
P1 the impact and influence which the macro environment has on an organisation and its
business strategies
Macro environment in a business impacts a business strategies of an organisation in a
precise manner. There are a lot of factors present in the external environment of a business which
play a crucial role in the development of a business. In order to survive in the market and to
formulate an effective business strategy, an organisation has to keep in mind all the macro
environment factors. Macro environment analysis majorly impact on feedback from the
customers and effects the quality of goods and services provided by a business (Agustina, 2019).
In order to better analyse impact and influence of macro environment in business strategies it is
necessary to conduct PESTLE analysis of Amazon. PESTLE analysis contains major
environmental factors such as political, economical, social, Technological, legal and
environmental which impacts on the operations and performance of a company. PESTLE
analysis of Amazon is given below:
 Political factors- Political factors impact a business in many ways especially when a
company conducts business operations in the global market. Amazon is a multinational
online E-commerce platform which is present in major countries of the world . So, there

are different governments present in every country which formulate and implement
various rules and regulations related to business operations at the marketplace. Amazon is
driven by different policies and regulations imposed by government present in different
countries so the company faces many hurdles in performing business functions at the
marketplace. Every country has different tax policy, export import regulations and trade
policy rules which impact performance of a business. Amazon deals with different
governments present in every country by deploying professional management in the
business.
 Economical factors- Economical factors has a major impact on every business as it
directly impacts revenue generation in a country as well as they also play a crucial role in
impacting financial performance of a company. Amazon performs global market
operations in different countries so each country has different inflation and deflation
rates. Amazon has hired major economists in every country to develop a business strategy
which is helpful in forecasting of the market trends.
 Social factors- Social factors are present in every country and they are the most
important factors in order to determine social performance of a business. Social factors
includes factors which are related to population and demographic situation in a country.
These factors play a crucial role for Amazon in major countries, Amazon analyses
various elements present in every country and perform its business operations according
to the needs of society.
 Technological factors- Technological factors include use of information and technology
in conducting business operations. Amazon is an E-commerce giant company so it is
impacted mainly by technological factors (Bhattacharyya, 2020). It is essential for
amazon to use latest technology in the business in order to improve its functioning in the
market. Amazon tries at best level in order to achieve various goals and objectives by
using various technological models and methods. Technological factors present in
Amazon includes use of 21st century in operations of the company to improve efficiency
and to cope up with the various challenges coming the business. Adaptation of modern
technology also helps the company to grow more in the market as well as it enables the
business to gain a competitive advantage in the market.