Analyzing the Impact of Macro Environment on Business Strategies

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1.Analyse the impact and influence of the macro environment on organisation and its
strategies......................................................................................................................................1
TASK 2............................................................................................................................................4
P2.Analyse the internal environment and capabilities by using effective framework................4
TASK 3............................................................................................................................................6
P3. Application of Porter's five force model to evaluate the competitive force of the specific
market industry............................................................................................................................6
TASK 4............................................................................................................................................7
P4. Applying a range of theories, concepts and models to interpret and advise strategic
planning.......................................................................................................................................7
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy refers to that plan of actions which is developed and formulated by the
management of company so that organisation can run its business in effective and efficient
manner. It can be the set of practices and moves which can be utilised by the organisation for
getting attention of its potential clients, strengthening execution, accomplishing organisation's
objectives and compete effectively (Akter and et. al., 2016). It is a master plan which is utilised
by the management for securing competitive position in marketplace, carrying operations and
attaining aims and objective of the company. With the help of business strategy, company find
out its strengths and weakness. Effective business plan of actions is good for the company in
term of maximising profitability and sustain market position. This assignment is based on Marks
& Spencer which is a British international retail firm and operated its business across the world.
This organisation was established in 1884 by Michael marks and Thomas Spencer and
headquartered in Westminster, London. This report will discuss about the impact of macro and
micro environment on organisation and its strategies. Further, will explain about competitive
forces of specific market industry for the company. Models, theories and concepts will also
define that help in acknowledging and interpretation of strategic planning of a company.
TASK 1
P1.Analyse the impact and influence of the macro environment on organisation and its strategies
Macro environment refers to those major external and uncontrollable components that create
impact upon a company, its business strategies and decision making. Basically, this macro
environment consist external factors like economic, social, legal and environmental etc. In Mark
& Spencer, these macro environmental factors also affect the company and its business
strategies. So, to determine the impact and influence of the macro environment on business and
its strategies, the management of company can use PESTEL analysis.
PESTEL Analysis- It is a tool and technique which is use by the management of company to
determine and analyse the macro environment factors that have an influences on the
organisation. This analysis provide information about the impact of external environment upon
business strategy and organisation (Amran and et. al., 2016). This analysis consist factors like
political, social, economical, technological, legal and environmental. The brief explanation of
these components are described as below:
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Political factor- This factor is totally about the government interventions which are make
in context of nation’s activities, strategies, laws, plans and policies. This consist government
policies, corruption, political stability and instability, taxation policies, foreign trade policy, trade
restrictions and others. Free trade is one of the most favourable aspects of present time that has
been set up among a multitude of nations (Boyd and et. al, 2017). Mark & Spencer who mainly
run its business in UK but it has its locations in different nations so this factor positively affects
M&S. It permits the respective company to import foreign commodities for selling in to their
outlets or stores at low price in comparison to others with maintaining a healthy profitability
ratio. Brexit influence the respective company unfavourably because due to Brexit the cost of
raw material and machinery increased cause of inflation so the production costs for M&S which
negatively affect the profitability of the firm.
Economical factor- It is another factor of the respective analysis and it includes tax rate,
currency rate, exchange rate, growth rate, inflation and deflation rate, employment and
unemployment rates of the nation. These all components create their direct and indirect impact
upon the business strategies of the specific company till long or short term. These factors also
affect the buying behaviour of the individual and make change in their needs and demands. M&S
is a retail company and in UK the current market trend is shifting towards small retail stores.
These outlets offer a low mark-up cost thereby permitting the respective company to retain a
premium status and influence it favourably in term of investing low cost and provide maximum
profitability. In UK, current economic situation is favourable with low to moderate interest rates
which show a sign of healthy economy and good economic situation of the country is a signal of
maximising disposal income which helps in doing the good business of the respective
organisation. This facto positively affect because interest rate is low the firm can borrow fund to
make expansion in their business. M&S is operating its business globally so when the changes
are occurred in taxation of different countries then it affect negatively and unfavourably to the
business and business plan of action to the respective company.
Social factor- This factor consists culture, trends, population trends like population
growth rate, age, gender, income, occupation, living standard, needs, taste and preferences etc.
These elements affect the plan of action of a particular organisation when changes are occurred
and generated within them (Burlton, 2015). Change in trends and taste & preferences of the
customers are the main elements which affect the business of M&S because when trends and
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