Concept of Business Strategy - Assignment

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Application of frameworks to analyse impact and influence of macro environment............1
M1 Critical evaluation of macro environment to determine and inform strategic management
decisions......................................................................................................................................5
TASK 2............................................................................................................................................5
P2 Analysis of internal environment of the company.................................................................5
M2 Evaluation of internal environment to assess strengths and weaknesses of the company....8
TASK 3............................................................................................................................................8
P3 Evaluation of competitive forces by applying Porter's Five Forces model...........................8
M3 Appropriate strategies to improve competitive edge and market position.........................10
TASK 4..........................................................................................................................................10
P4 Application of theories, concepts and models for strategic planning..................................10
M4 Strategic management plan with tangible and tactical priorities........................................14
D2 Interpretation of information by applying competitive and environmental analysis..........14
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Business strategy is the term that describes all the strategic actions that are taken by an
organisation in order to achieve growth and predetermined objectives. For all the business
entities it is very important to formulate appropriate policies so that operational activities can be
performed in effective manner (Burlton, 2015). Organisation's managers, directors and other
executives are responsible to form impressive plan of action in order to smoothly run a business.
In UK, telecommunication sector is continuously growing that's why competition is this industry
is increasing. The organisation which is chosen for this report is Virgin which is a British
company and providing telecommunication services to the customers. Its Headquarters are in
Hook, Hampshire, UK and founded in year 2006.
This assignment aims at the concept of business strategy by covering various topics such
as impact and influence of macro environment on Virgin and its strategies, analysis of internal
environment and capabilities. Application of Porter's Five Force Model to analyse competitive
forces, range of theories, concepts and models are also discussed under this project report in
order to interpret and understand strategic directions.
TASK 1
P1 Application of frameworks to analyse impact and influence of macro environment
Macro environment: All the factors that are external and uncontrollable by the
organisation are the part of macro environment that may affect overall ability of the company to
execute business. All the conditions that are available in the economy rather than in a particular
sector or region are going to leave an impact on all the business entity.
PESTLE analysis: It is method which is used to analyse external market where the
operations are executed by organisations (PESTLE analysis, 2015). It is very beneficial for all
the business entities as it helps in environmental scanning and strategic management by
providing appropriate information of external environment. It is mainly used to determine the
impact of different factors such as political, legal, environmental, economical, social and
technological etc. It is also advantageous for Virgin as it guide managers to gain information
regarding valuable advantages and threats that may affect business execution process. All the
elements of PESTLE are described below:
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(Source: PESTLE analysis, 2015)
Political: Such factors that are related to government, its rules, regulations and policies that may
affect business of a company. In UK government supports such organisations which may
contribute a higher amount in national income. For example, these factors influence
telecommunication sector because various limitations are imposed by the government in this
sector. The policies changes with time and whenever it changes it will affect the functioning of
the industry. If a company wants to expand its business in other countries then they have to take
permission from government if it is not granted then it will be a negative impact of such factors.
 Positive impact: it is good opportunity for Virgin to operate business in UK
appropriately because its profitability is high and it will increase the contribution of
telecommunication sector in GDP.
 Negative impact: It also affects negatively when any changes are made in the policies of
the government then it would impacts the overall decision making and leads to
modification under the future plans.
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Illustration 1: PESTLE analysis, 2015

Economic: The factors that are related to inflation, deflation, price of goods, interest and
foreign exchange rate, economic growth etc. are considered as economic factors. For example, in
UK the government is providing higher opportunities to the developing companies in order to
grow its economy hence these factors will influence telecommunication market because of low
taxation on the entities.
 Positive impact: These factors may leave positive impact on Virgin if inflation rate
decreases because at that time costs get decreased and purchasing power of customers get
increased.
 Negative impact Changes in such factors may affect business of Virgin as inflation and
deflation rates affect purchasing power of customers. It is very important for the business
entity to gather information of such factors so that appropriate strategies can be
formulated in order to reduce their negative impact (Torrent-Sellens, 2015).
Social: Customer's taste, paying capacity, age, preferences are considered as the part of
social factors. In UK people are very much socially aware hence it is essential for Virgin to focus
on all these elements in order to meet customer's expectations and operate business in effective
manner. For example, all these factors may influence the telecommunication sectors because for
companies it is not possible to meet all the requirements of the customers as they are segregated
in different segments such as kids, youngsters, old, millennials etc.
 Positive impact: If Virgin focuses on each requirement of customers then it will help to
gain their trust and enhance overall profits.
 Negative impact: In case, company is not able to meet customer's expectations then it
would directly impacts the internal performance of the company.
Technological: Latest technology and market trends are the variables falls under this
factor. Citizens of UK are very much interested in technology and get attracted toward such
products that have some latest feature. For example, it is very important for telecommunication
sector to be innovative as market trends always changes with time. If the sector is not using latest
technology then it will be not possible for the industry to sustain in the market.
 Positive impact: Virgin may take advantage of this by providing them unique
technological products so that profitability and market share can be enhanced (Teh and
Corbitt, 2015). Thus it is very crucial for managers of company to make decisions
regarding impressive use of technologies for the betterment of business.
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 Negative impact: If no technological factors are considered by Virgin then it will result
negatively for the company as it will not be able to meet customers expectations.
Legal: There are various policies that are imposed by the legal authorities of UK and for
all the business entities it is very important to follow all of them. For example, government
policies always changes with time and modifications in the regulations is done regularly. For all
the sector it is not possible to adopt all of them as it will affect their strategies. When these are
not adopted by them then legal parties may influence the business operations as they are not
following the regulations.
 Positive impact: In UK legal authorities support such business that may contribute a
higher amount in the national income. Mobile industry contributes a good amount in
GDP hence Virgin will have full support of government for its business execution which
is positive impact.
 Negative impact: In case if these policies are not examined by the manger of virgin than
it may have negative impact on the business. Thus they have to take valuable decision in
order to make strategies that support to run business in appropriate manner.
Environmental: Government of UK is highly concerned about the protection of
environment and implemented various acts. For example, if telecommunication sector is not
following the environment protection acts then it will affect it operations because UK's
government is highly concerned with environment protection.
 Positive impact: As Virgin is planning to mitigate the effect of telecommunication masts
on environment it is a good opportunity of the company to get support of government. It
will help to run the business smoothly in UK. Negative impact: If Virgin breaks any environmental protection rule then it will result
negatively for the organisation and government may take strict action against the
company.
Ansoff's Growth Vector Matrix: This model was introduced by H. Igor Ansoff and the
main aim of this matrix is to provide simple ways to the marketers in order to analyse risk of
growth (Ansoff's Growth Vector Matrix, 2019).
Purpose of Ansoff:
 Main purpose of using Ansoff's Matrix is to determine the best suitable strategy for the
business.
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