Analyzing Impact of Macro Environment on Organizational Strategies

Business
Strategy

Table of Contents
INTRODUCTION.................................................................................................................................3
TASK 1.................................................................................................................................................3
P1. Apply appropriate frameworks to analyse the impact and influence of macro environment on
organisational strategies....................................................................................................................3
M1. Critically analyse the macro environment to determine strategic management decisions..........4
TASK 2.................................................................................................................................................4
P2. Analyse internal environment and capabilities of organisation using appropriate frameworks. . .4
M2. Critically evaluate internal environment to assess strength and weakness of business...............6
TASK 3.................................................................................................................................................7
P3. Apply Porter’s Five Forces Model to evaluate competitive strategies.........................................7
M3. Devise appropriate strategies to improve competitive edge and market position.......................8
TASK 4.................................................................................................................................................9
P4. Apply range of theories, concepts and models to interpret strategic planning for organisation...9
M4. Produce strategic management plan that has tangible and tactical strategic priorities and
objectives.........................................................................................................................................10
CONCLUSION...................................................................................................................................11
REFERENCES....................................................................................................................................12

INTRODUCTION
Business strategy refers as the capability for an organisation to develop competitive
strategies that create opportunity for growth and stability of an organisation in global market.
This project is based upon JD Sports which is nominated as “Business of the year” by the
City AM Awards in 2019. It is mostly known for its financial performance with their
aggressive expansion strategy to achieve success in perfect competition market (Agrawal,
2016). This project applies appropriate frameworks for analysing impact of macro
environment that influence organisational strategies. It determines internal environment and
capabilities of organisation using Porter’s Five Forces Model to evaluate competitive
advantages. Additionally, it implements various range of theories, concepts and models to
interpret strategic planning for organisation.
TASK 1
P1. Apply appropriate frameworks to analyse the impact and influence of macro environment
on organisational strategies
The business strategy is the set of actions performed in an enterprise to enlarge its
customers through quality management that result in maximisation of revenue and profits. It
creates opportunity for growth and stability of business by competing with rivalries to sustain
in global market.
PESTLE Analysis:- This framework analyse macro-environmental factors of
business which impact stability of business for achieving success. Managers of JD Sports
implement this to analyse the strategic positioning of organisation by assessing their missions
and long-term goals. These factors of PESTLE analysis impact either positively or negatively
on intrinsic and extrinsic strategies and capabilities in achieving organisational goals and
objectives that are as follows:-
 Political factor:- This element involves taxable policies, trade tariffs, fiscal and
monetary policy, political stability or instability, labour laws, etc. These factors affect
the strategic decision making process of business which delay in accomplishment of
success. Managers of JD Sports are adversely affected by the political factor of labour
law as they are bound to pay minimum wages for their employees which is assured by
government with their bonus and incentives to motivate them.
 Economic factor:- It is the determinant which includes economic growth, interest
rates, disposable income of consumers, fluctuation in exchange rates, etc. This
directly or indirectly impact business through which purchasing power of people
depends on spending their income for particular product. Managers of JD Sports are
negatively impacted by economic factor through fluctuation in exchange rate as
increase in price of products which decrease value of money and insist consumers by
saving income (Alstete, 2014).
 Social factor:- This element involves culture trends, demographic conditions, age and
income distribution, population analytics, etc. It directly affects business through

misunderstanding, barrier in communication, etc. Managers of JD Sports are
adversely affected from this factor of macro-environment through culture trends as it
discriminate population with their behaviour, ethos, norms, perception, costumes, etc.
 Technology factor:- It consists of new technologies, innovative ideas, automation,
etc. This element positively impact business for developing new strategic plan by
adopting technology to compete with its rivalries. Managers of JD Sports focus on
this factor in generating new ideas to strategise their functions for strategic decision
making to remain stable by competing with Hibbett Sports, Adidas, Nike, etc.
 Legal factor:- This factor includes health and safety of employees, consumer
protection rights, product labelling and packaging, etc. It positively impact business as
it enlarge consumers by following the government rules and regulations through
supplying qualitative products. Managers of JD Sports are favourably affected by
legal factor of consumer protection right through brand awareness for their healthcare
and safety issues.
 Environmental factor:- It is the determinant which consists of environmental
pollution, disposal wastage, weather, climate, infrastructure, agriculture, insurance,
etc. This favourably affects business environment for motivating employees by
working in good atmosphere. Managers of JD Sports are positively impacted by
controlling air, water and noise pollution and support green environment by planting
more trees (Bălău, 2015).
M1. Critically analyse the macro environment to determine strategic management decisions
The macro-environment creates opportunity to determine strategic management
decision as it analyse the competitive strategies adopted by its rivalries which may create
threat for business. The managers of JD Sports focus on the factors of macro-environment
which may be favourable and unfavourable for business that may either positively or
negatively impact the stability of business in global market.
TASK 2
P2. Analyse internal environment and capabilities of organisation using appropriate
frameworks
The internal environment consists of elements within an organisation that involves
employees, culture, members, events, management, suppliers, etc., which impact human
resource. Every business executes their competitive strategies to sustain in perfect
competition market which creates threats for others. This enhances product and market
development for achievement of success. Managers of JD Sports increase their capabilities
and strategies by implementing McKinsey model and TOWS analysis which are mentioned
below:-
McKinsey model:- This framework was developed by Robert H. Waterman Jr. and
Tom Peters in 1980. It consists of 7’S structure that increases effectiveness and ability to
achieve goals of organisations (Benijts, 2014). The elements of this model are structure,
strategy, system, skills, styles, staff and shared values. It is essential for an organisation to