Impact and Influence of Macro Environment on Business Strategy
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Added on 2021-01-02
Impact and Influence of Macro Environment on Business Strategy
Added on 2021-01-02
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BUSINESSSTRATEGY
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Impact and influence of macro environment on business strategy........................................1M1....................................................................................................................................................4TAKS 2 ...........................................................................................................................................4P2 The internal environment and organisation capabilities........................................................4M2....................................................................................................................................................7TASK 3............................................................................................................................................7P3 Competitiveness of UK's telecommunication sector.............................................................7M3....................................................................................................................................................9TASK 4..........................................................................................................................................10P4 Understanding and interpreting strategic direction..............................................................10M4..................................................................................................................................................12CONCLUSION..............................................................................................................................12REFERENCES .............................................................................................................................13
INTRODUCTIONBusiness strategy is crucial for every company to formulate and develop in order to runcompany's activities in standard order. It helps in planning effective strategies in order to achievebusiness goals and objectives with perfection. Strategies become effective when the companysucceed after implementing those strategies. In other words, business strategy can be defined as aworking plan formulated by a company for achieving vision, competitive advantage, earnmaximum profits, optimizing financial performance, etc (Ackermann and Audretsch, 2013).British Telecom is a multinational holding company which has been operating in more than 180countries. It provide fixed lines, mobile and broadband services in United Kingdom and is thelargest provider of these. It has its headquarters in London, UK. It provide telecom services tocorporate and government customers across the world. This assignment will mainly focus onimpact and influence of macro environment on the business strategy of company. It will alsodescribes assessment of internal environment and organisational capabilities. Competitiveness ofUK's telecommunication sector and analysis of strategic direction of company is also mentionedunder this assignment.TASK 1P1 Impact and influence of macro environment on business strategy.Telecommunication undergo great impact and challenges from external environment inorder to maintain position in global market. British Telecommunication is a global company andoperating in many countries (Annabi and McGann, 2013). This increases the risks and challengesfor company. PESTEL Analysis helps company to measure the risks and impact caused bymacro environment and rival teams. PESTEL stands for political, economical, social,technological, environmental and legal. This tools help ion identifying influences in abovementioned areas. PESTEL Analysis of British Telecom shows different challenges faced by company indifferent sectors. Political factor: This factor plays a significant role in determining the different impacton BT group. As British Telecom is operating in dozens of countries, they are exposed todifferent political condition and environment of different countries. This greatly impact theworking of company and also increases political risks. BT have been successful in managing and1
diversifying the systematic risks of political environment. They can analyse following factorsbefore entering into a new market:Industrial safety regulations in telecommunication sector.Different employee benefits.Working week regulation in telecommunication.Different employment legislations- minimum wages and overtime, etc.Tax related laws and trading and tariff regulations.Regulations related to pricing.Intellectual property protection.Legal framework for contract enforcement.Economic factor: This includes tax rates, inflation rates, saving rate, interest rate,foreign exchange rate, economic cycle and much more. These factors greatly impact BT.Company have to formulate plans by considering country's economic conditions so that they canachieve success in respective country. BT can consider following things:Economic growth rate in country.Business cycle stage (e.g., recession, recovery, etc.)Labour costs and productivity.Education level in economy.Quality of infrastructure in telecommunication sector.Inflation and interest rates.Social factor: Culture of society and way of performing things greatly impact the cultureof organisation. It is important for marketers of BT group to know about beliefs and attitudes ofcustomers in order to plan their marketing strategies. This will increase benefits of company.Following social factors are analysed: Entrepreneurial spirit of people.Culture and beliefs.Class structure, hierarchy and power structure of company.Demographics and talent of population.Technological factor: This is a fast growing area where there is new advancements intechnology on daily basis (Auzair, 2011). It is necessary for BT to adapt and implement new2
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