Business Strategy: Macro and Micro Environmental Impact on Organization

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
Macro Environmental..................................................................................................................3
Micro Environmental..................................................................................................................7
Porter's Five Forces Model..........................................................................................................8
Strategic management plan........................................................................................................10
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................14
INTRODUCTION
Business strategy refers the set of competitive response and actions which organization
uses for attracting customers, beating competitors, improve organization performance and
accomplishes goals. In simple term Business strategy m a type of strategy which guides
organization to work on the vision by influencing financial performance, gets competitive

advantage from competitors. Business strategy supports business to maintain sustainability in
competition market. It provides vision and mission of the company by reducing internal and
external threats (Akter and et al., 2016). It plays significant role in the organization because it
organizes plans and carries idea so that business promote on wide scale. There is an example of
the Tesco for understanding role of business strategy. It is the British multinational groceries
company which is also popular as general merchandise retailer. It is headquartered in Welwyn
garden, England, UK. Based on the gross revenue Tesco comes in the third position.
Organization offers wide variety products such as supermarket, hypermarket, Tesco conventional
shop etc. to customers. This report will cover macro and micro environmental impact on
organization. It will include porter's five force model for evaluating the competitive force in
retail sector. Theories, concept and models will apply for the organization so that organization
enables to interpret strategic planning.
Macro Environmental
Macro environment can be defined as external factors which gives impact on
organization and their performance. It also influences business's decision-making and strategies.
Macro environmental includes gross domestic products, inflation, employment, consumer
spending, monetary policy, fiscal policy etc. Gives impact on organization's performance,
economy and strategies. It helps organization to analyse threats and opportunities and influences
operations of the business. External environmental factor can be understood by the framework
because it helps to understand external forces.
PESTLE Analysis
This framework plays significant role in organization because it analyses impact of
external factor on organization. Tesco is UK's company which is considered as developed
country around the world. Therefore, it applies this model for analysing performance and their
impacts on decision-making of strategic managers.
Political factors: Tax rates, Unemployment rate, political instability, financial condition
of different countries and legislation law etc. are known as political factor. In UK, government is
stable and possess strict trade law for retailing sector. Political factors give impact on
organization performance and decision-making of the strategic manager because Tesco is
retailing industry which retails their products in UK.

Positive impact: It is UK's largest groceries retailer company which operates in various
countries. In UK, government is stable currently which lead golden opportunity for the Tesco
because organization doesn't have to pay high additional taxes rate during trading products to
customers (Varelas and Georgopoulos, 2017). It influences strategic management strategies for
trading product in large quantity. Thus, strategic manager enables to lead economic benefits in
company.
Negative Impact: Organization gets negative impact on manager decision-making. For example,
according to UK's government policies is that an individual organization can't trade their product
in various countries (Samanian and Khosropanah, 2017). If Tesco breaks the law, have to pay
high taxes. Thus, it gives negative impact on organization growth because manager can retail
their products in limited countries as result market share is reduces. Second, Organization unable
to improve brand power across the world. Thus, type policies give impact on strategic
management decision's which is used for business growth.
Economic factors: it concludes interest rates, inflation rate, recession rate, foreign
exchange rates, Governmental activities etc. are economic factors which gives impact on
organization's economical scale and decision-making. Recession period, inflation rate and
borrowing interest rate are economical factor in UK.
Positive impact: During inflation rate, organization gets positive impact because large number
of customers avoids dine out and prefer to eat at home (Islam and Mamun, 2017). It gives golden
opportunity to Tesco company because groceries are available on cheapest price which improves
buying power of the customers. To influence buying behaviour of customer, strategic manager
introduces varieties of groceries so that customers buy high quality groceries, as result
organization enables to improve selling scale of goods. Thus, manager gets positive impact on
their decision-making.
Negative impact: Economic factor gives impact during recession period, in this state customers
doesn't like to buy groceries and prefers to dine out which directly gives impact on manager's
decision-making (Abdel-Basset, Mohamed and Smarandache, 2018). Due to high recession
period organization have to retail their products or goods on low price, in that state organization
unable to take profit margin. Even organization have to economic factor gives impact during
recession period, in this state customers doesn't like to buy groceries and prefers to pay high