Business Strategy: Impact of External Factors on Organization and Strategies

Business Strategy

Contents
INTRODUCTION.....................................................................................................................................3
LO 1............................................................................................................................................................3
Apply the relevant frameworks and analyze the impact of the different macro environment factors on
an organization as well as its strategies...................................................................................................3
LO 2............................................................................................................................................................5
Analyze the internal environment as well as capabilities of an organization using relevant frameworks 5
LO 3............................................................................................................................................................9
Application of Porter’s Five Forces model and evaluation of the competitive forces of market on an
organization.............................................................................................................................................9
LO 4..........................................................................................................................................................10
Application of different theories, concepts and models and interpretation of strategic planning for an
organization...........................................................................................................................................10
CONCLUSION........................................................................................................................................12
REFERENCES........................................................................................................................................13

INTRODUCTION
Actions and decisions that are taken by an organization in order to attain its goals and also to
remain competitive in the market is known as business strategy. It guides the organization and also helps
in the decision-making process. It assists businesses in understanding where they are positioned in the
market and identify their strengths as well as weaknesses (Baraibar‐Diez, Odriozola and Fernández
Sánchez, 2017). A business strategy ensures that an organization utilizes its resources in the efficient
manner. Organization chosen for this report is Nissan, a Japanese automobile company that was founded
in the year 1993. The company is headquartered in Nishiku, Yokohama. Nissan sells its products under
different brand names like Infiniti, Nissan and Datsun. Respective company’s business strategies are
influenced by the government policies regarding issues relating to climate change. The report explains
influence of different external factors on an organization using relevant frameworks. It also evaluates the
outcomes of Porter’s Five Forces model in the market.
LO 1
Apply the relevant frameworks and analyze the impact of the different macro environment factors on an
organization as well as its strategies
PESTEL Analysis
PESTEL analysis is a strategic framework that organizations use in order to identify the different
external environment forces that can have an influence on their overall business operations. It also
contributes in planning and expansion of business for a company. One of the advantages of using this
framework is that it is time and cost effective as well as helps businesses in analyzing potential threats.
The PESTEL analysis of Nissan is as follows –
Political Factors – The United Kingdom is a politically stable nation and one of the most
powerful countries. Also, the country maintains good relations with countries like United States in the
world. However, Brexit has created some uncertainties as well as political issues for the country.
Economic Factors – Although the United Kingdom is an economically stable country, the
recession of 2008 put its economy in trouble (Bentley-Goode, Omer and Twedt, 2019). Due to this, the
economy of UK has recovered slowly. The country has a large population which means that even small
businesses can make profits.
Social Factors – These factors play an important role and can have an influence on the overall
performance of an organization. The UK government offers various public services without any charge to
the citizens. But the dependency ratio among people living in the nation is continuously increasing.

Technological Factors – The nation has a good access to technology and people who have an
expertise in Information Technology and Science (An Example PEST Analysis of The UK. 2020). The
United Kingdom has various legislation that are associated with the intellectual property. But the overall
technological development of the UK is slow as compared to the US.
Environmental Factors – Different government policies about clear air as well as issues related
to climate change. Due to this, the company has manufactured automobiles that have powerful built-in
battery, along with innovative technology. This has helped the company in gaining a greater number of
customers.
Legal Factors – All organizations that operate within the United Kingdom, are expected to
adhere to different legislation (Chen, Eshleman and Soileau, 2017). Respective company is expected to
adhere to Employment Act 1996 as well as Equality Act 2010. In Equality Act 2010, the companies are
responsible to ensure that all employees are treated in a fair and consistent manner.
Therefore, various factors of the PESTEL analysis can impact the strategy of the company. For
example, if the company fails to use latest technology in its products, the customers will not find them
attractive and might not purchase the same. This is because customers are considered to be one of the
most important stakeholders within a company. Also, since people are increasingly becoming aware about
the environment, it is important for the company to focus on this. For example, it can develop
automobiles so that there is not carbon emission.
Stakeholder Analysis
Stakeholder Analysis is a framework that allows a company to identify and establish appropriate
communication with its stakeholders. This is an important technique that helps organizations in
identifying key stakeholders as well as their needs. Nissan has many stakeholders both inside the
company as well as outside it. The stakeholder analysis of respective company is as follows–
High Power, High Interest – These are those stakeholders that the company should manage
closely. These people must be kept fully engaged and the company should make various efforts in order
to keep them satisfied. This is because they possess high power over the projects of the company. Owner
of the company, General Manager, Board of Directors as well as shareholders of the company. Also,
these stakeholders should be involved in the decision-making process.
High Power, Less Interest – These stakeholders possess high power but low interest in the
project of a company (Evans and et. al., 2017). These people should be kept satisfied and enough work
should be put in to ensure the same. The stakeholders that fall under this category are the customers,