Effect of Macro Environment on Business Strategies

Table of Contents
Introduction .....................................................................................................................................3
Applying suitable model analyse the effect and cause of the macro environment on a given
business organisation and its strategies..................................................................................3
Examine the internal environment factors and capabilities of a given business organisation
using suitable frameworks......................................................................................................5
Evaluate Porter's Five Forces model for identifying competitive analysis of the market .....7
Various Strategic planning for the organisation.....................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

Introduction
Business Strategy consists plan, procedure and decision undertaken by the business
organisation in order to accomplish the goal and objective. The Business strategy helps company
in improving performance as well as productivity for achieving pre-decided target within
particular business industry. In context of Mercedes, the supervisor emphasised on making an
effective strategy that helps in expanding future success and growth of company by satisfying
need and preferences of customer. The effectual plan of action helps in achieving goal and
objective of organisation within given time period. The current report includes PESTLE analysis
which is used by marketers to determine and evaluate the external factors which affect the
business and is used widely in order to analyse external environmental factor of company. In
assistance of this, VRIO and SWOT analysis is adopted by the company for assessing internal
factor of company. Also, it includes Porter's Five Force model in order to achieve competitive
advantage over rival firms. At last, it involves Ansoff matrix for accelerating future growth and
success of the company.
Applying suitable model analyse the effect and cause of the macro environment on a given
business organisation and its strategies
It is important to analyse its external environmental factor in order to carry out its
business functions as well as operations in an appropriate manner. In context of Mercedes
company, the manger adopted PESTLE analysis to determine the effect of external environment
on business organisation which is mentioned below:
Political Factor: These factors are those which includes laws, rules and restrictions etc.
These factors play a crucial role for every company to be stabilised in the marketplace. In
discourse to Mercedes, the high authority focuses on providing best car at affordable price to its
customer in order to satisfying them. In addition to this, the company focuses on taxation
structure that is one of the political factors that impact on import of car industry (Johnson 2016).
It includes several factors such as employment law, tax policy etc. The use of crude oil helps
auto mobile industry in expanding their sell in the marketplace in order to achieve future success
and growth of the company. Due to stable political condition, the company does not change its
policy, it imposes positive impact on performance level of business organisation.
Economic Factor: These play an important role in the business organisation. It includes
inflation as well as deflation rates that directly affect the profitability and sales of the company

(Zucchella and Previtali , 2019). Because of high taxes and low wages rate it is not possible for
people to purchase the car in country. So, it is very difficult for Mercedes company to sell a car
for increasing profitability as well as future success and growth of the company. The supervisor
of the company focuses on providing the best car to customer at affordable price that helps in
expanding brand image and goodwill of the company. The manager of Mercedes provides
innovative and unique car to its customer in order to satisfy them. It affects the company in
favourable manner.
Social Factor: It involves demographics, age, region and income that affect profitability
of the company. In context of Mercedes, the supervisor analyses need, lifestyle and preferences
of customer in order to achieve future success and growth of the company (Amran and et. al.,
2016). The manufacturing of car depends on need and wants of consumer that helps in increasing
profitability of business organisation. Apart from this, if there is change in lifestyle of customer
which is adopted by competitive firms it can impose negative impact upon the company .To
handle this, the R&D department of Mercedes should assess the need and preference of
customer in order to enhance competitive advantage over rival firms. The main focus of
company to offer car to its user in order to increase their standard of living in the society. Thus, it
imposes positive impact on the success of business organisation. In assistance of this, they offer
innovative products and services to its customer for increasing their standard of living can
imposes positive impact on productivity as well as profitability of business firm.
Technological: Technology plays a very important role in every organisation for
accelerating productivity and profitability of the company. It assists the business organisation in
expanding its business online through the use of advertisements, public relation, events and
sponsorship. Technology is essential for simplify the work, reduces resources and workforce that
affect the cost efficiency and production capacity of business organisation in positive manner
(Linder and Williander 2017). In reference to Mercedes, the supervisor emphasised on
implementing advance technology for future growth and development of company. For instance,
the technology used in Germany provides a lot of advantage to the manufacturer of Mercedes
because it offer innovative cars in order to attract customers for achieving competitive
advantage over rival firms. Thus, the main purpose of company is to execute advance technology
for providing quality products to customer in order to accelerate future success and growth of the
company. Due to implementation of advanced technology, the manager of Mercedes makes