Business Strategy: Macro Environment, Internal Environment, Porter's Five Forces Model

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................4
P1 Macro environment................................................................................................................4
LO2.............................................................................................................................................7
P2 Internal environment..............................................................................................................7
LO3..................................................................................................................................................8
P3 Applying Porter's Five Forces model to J.P. Morgan............................................................8
LO4................................................................................................................................................10
P4 Strategic plan.......................................................................................................................10
CONCLUSION..............................................................................................................................13

INTRODUCTION
Business Strategy is a management's master plan which is implemented in order to secure
a competitive position in the market, continue its operations and satisfy customers in order to
achieve business objectives and goals (Rothaermel, 2016). This report evaluates the influence
and impacts of a macro environment on an organisation and determines an organisation's internal
environment and its capabilities. It also analyses the various outcomes of a given market sector
using Porter's Five Forces model and applies theories, models and concepts which aid in
understanding and interpreting strategic directions that are available to an organisation. All the
attributes in this report have been evaluated within the organisation J P Morgan, an American
multinational financial services holding company and an investment bank, whose headquarters
are located in New York City, USA. Founded in 1799, 220 years ago, it ranks as the largest bank
in the United States and on the basis of assets , ranks as the sixth largest bank in the world.
LO1
P1 Macro environment
Macro environment can be defined as general environment which can affect working of
whole company. In simple word a set of external condition which can affect firm development
efforts that can be positive or negative (Rothaermel, 2016). It gives impact on decision-making
process of strategic management. Macro environmental factors are political, social and
economical, It plays vital role in organization for example it supports strategic management to
completely understand external environment in the particular region. External environment can
be understood by a framework that is Pestle analysis.
Pestle analysis
It is a tool which is used to examine and supervise macro environment factors that can
directly impact on organization performance. This framework is generally applicable when a
business is going to initiate a new business or entering in emerging market. J.P. Morgan is
American multinational investment bank which offers financial services to customers in UK,
U.S. It is established in New York, United State. Organization apply pestle analysis farmworker
for analysing external environment of company. It is described below:

Political factors: Political stability, trade regulation bureaucracy and interference of government,
pricing regulation and intellectual property protection etc are political factors. J.P Morgan is
investment company which offers financial services in UK.
Positive impact: Political stability can give positive impact on organization because they
don't have to change their rules according to policy. Government also supports banking sectors
because they give contribution in country's economy. So, organization can get positive impact
because it is also banking industry. Thus, corporate strategy manager can promote franchises of
bank strategy in other countries.
Negative impact: Brexit can give negative impact on strategic management decision. For
example J.P. Morgan makes strategy to offer financial services in other countries but Brexit can
give negative impact on this decision (Reinhardt and et.al., 2017). The main reason behind is that
Brexit takes initiatives to keep transparency in trading, in that state when J.P. Morgan trade with
potential partner as result company have to keep various policies which leads uncertainty and
complexity.
Economic factors: Taxation, foreign exchange rate, pricing regulation, unemployment rate,
inflation rate and interest rate are economic factors.
Positive impact: Corporate strategic management of J.P. Morgan crests plan to improve
GDP rate of company during inflation period. It can promote by government because when
banking sector GDP rate enhance that directly improves country's economy. Inflation period can
give positive impact on management decision-making process.
Negative impact: Changes in foreign currency rate can give negative impact on strategic
management decision. For example when J.P. Morgan company wants to trade with international
company for gaining high profitability in economy infrastructure (Ervural and et.al., 2018). Due
to currency instability in can discourage international investors to trade with J.P. Morgan. Thus,
strategic management can get negative impact during trading with other international investors.
Socio-cultural factors: Demographical changes, education level, class structure and leisure
interests are socio-cultural factors.
Positive impact: Strategic management makes customer segmentation strategy which is
based on the education level. The main reason behind is that most marketer has different level of
education. This strategy can promote by marketers because they get financial service well-
formed. J.P. Morgan also can get priorities each customer in market. Apart from this, it can focus