Impact and Influence of Macro Environment on Business Strategy

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1) Impact and influence of macro environment on strategy of an organisation ......................3
LO 2 ................................................................................................................................................7
P2) Internal environment and capabilities...................................................................................7
LO3..................................................................................................................................................9
P3 Porter's five force model to evaluate competitive forces within automotive sector............9
LO 4...............................................................................................................................................11
P4) Strategic planning...............................................................................................................11
CONCLUSION..............................................................................................................................14
REFERENCES .............................................................................................................................15
.......................................................................................................................................................16

INTRODUCTION
Business strategy can be defined as master plan that is formulated by the management of
a company or firm with the aim of securing a better competitive position in the business market.
Thus, basically business strategy is a set of action or decisions that assists and provide a
framework to accomplish and achieve the desired goals through a well planned and effective
strategy (Aluchna, 2018). For completion of this assignment the selected organisation is
McLaren Automotive which is a famous British brand and creator of luxury, high-performance
sports cars and super cars. McLaren Automotive is a automotive manufacture and all its vehicles
are hand assembled at McLaren production centre situated at Surrey, England, UK. The main
focus of this report is on providing a understanding about strategy process thus includes a critical
analysis of macro environment and determine strategic management decisions. Along with this,
analysis of internal environment together with appropriate strategies to improve competitive
edge is also there. At last, this report also consists a range of theories, concepts and models to
develop and produce a strategic management plan.

LO 1
P1) Impact and influence of macro environment on strategy of an organisation
Macro environment basically represent the conditions and factors that prevails in a
economy as a whole and have significant influence on all the organisations that operates in that
particular economy. Thus, it can be said that macro environment is a sum total or collection of all
the external factors like the GDP, inflation rate, spending power of customers, policies of
political parties, etc. that directly or indirectly create a impact on business strategy and other
decision making of process and operations of an organisation (Anwar and Hasnu, 2016). The
McLaren Automotive is a manufacture of sports cars and also provides electric control systems
for motor sports industry. This organisation is having a specialisation in creating high-
performance luxury super cars and sport scars and also operates a formula 1 racing team.
McLaren Automotive is a globally renewed brand well known for its high technology and
innovation has been pioneering and innovating in the competitive world of Formula1. The area
served by McLaren Automotive includes various locations of UK, US and now also expanding
in parts of Asia including Russia, India and China and also plans to open dealerships in Vietnam
and the Philippines (McLaren Automotive, 2020). Thus, being an international organisation, the
business strategies and policies of McLaren Automotive are highly affected and influenced by
its macro environment. To have a better understanding about the various factors of macro
environment of McLaren Automotive and to evaluate its impact on business strategy use of
PESTEL analysis is made which is provided below:
PESTEL analysis
It is a framework or toll used by an organisation for evaluation and analysis of its macro
environment and all the external factors that effect the working and operations of an organisation
together with creating an influence over decision making and strategy formulation (Cross, 2019).
Following are the important factors of macro or external environment of McLaren Automotive
creating a impact on strategy of organisation.
Political
This element reflects the level and extent to which a various polices formulated by
government and other political parties can create an impact on functioning of organisation.
Political factors includes the level of stability in political policy and includes elements like trade
restrictions, fiscal and other taxation polices. Continuous Change in government regimes and