The Impact of Macro Environment on an Business Organization
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Added on 2020-06-05
The Impact of Macro Environment on an Business Organization
Added on 2020-06-05
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BUSINESS STRATEGY
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1 Evaluating the impact of macro environment on an business organization......................3P2 Evaluation of internal strength and capabilities of organization.......................................7TASK 2..........................................................................................................................................10P3 Implementation of Porters Five Forces model ...............................................................10P4 Implementing Concepts, Theories and Models to help with interpretation andunderstanding of strategic plan.............................................................................................12Conclusion.....................................................................................................................................15REFERENCES..............................................................................................................................17
INTRODUCTIONBusiness strategy refers to a highly effective plan made to achieve specific goals andobjectives of a firm. These policies are formulated to gain growth of a business which may leadthem in attaining strong position in terms of competition. Along with this, it also helps in earningmore and more profitability by running operations in a legal manner. Therefore, it is essential forenterprises to build strong policies and strategies in order to gain higher profitability in business.Cadbury organisation is entirely owned by Mondelez International. Cadbury products areHalloween, Bars, Multipacks, Deserts, Ice cream, Biscuits etc. in United Kingdom. Currentlynear about 70,000 employees are working in this enterprise. This report has been made in orderto formulate some better strategies of present firm with the help of SWOT and PESTEL analysis.In addition to this, some analysis of internal and external environment, Porters five forces model,theories and more are also presented. TASK 1P1 Evaluating the impact of macro environment on an business organizationBusiness environment of a company consists various micro and macro factors whichimpacted either internally or externally on operational activities, overall performance andcapabilities of working organisation. In this manner,Cadbury Company of UK has operated itsbusiness in many countries so its natural that operational activities of this firm are affected bymany external factors of macro environment. Therefore, in this context, an analysis of thesefactors on this enterprise are:- PESTLE ANALYSISThe factors which creates a great impact on business of Cadbury externally are discussed below: Political: All countries have different political rules and regulations made bygovernmental bodies. So, it is necessary for Cadbury to follow all rules of countrieswhere it has operated business. Today, people are becoming more aware about theirhealth as consuming confectionery items impacts negatively on them. It creates variousissues like obesity as such products consumes much amount of sugar. So government hasput pressure of manufacturers to reduce amount of sugar from products. These politicalrights impact on decisions which reduces profitability of association. In order to recover3
loss, this firm has decreases size of some products like chocolates which help inmaintaining current cost level. It will add value in expenses which will hamperproductivity and profitability in a higher manner. ◦Strengths: By getting relaxations in tax policies made by regulatory bodies then itwill help in trading and earning more profitability. It will show the major benefit ofsuch political laws.◦Weaknesses: While in contrast, if political rules tighten up policies then it willnegatively impact on profitability. It assist Cadbury to formulate strong strategies andpolicies as well as take appropriate decisions. Economic:From statistical point of view, it has observed that in the year 2010 amongother currencies, exchange rate of pound was found on least price. So, Kraft Companyhas taken this as opportunity and purchased Cadbury in a lower price and low interestrate was reason when Kraft company borrowed a loan from a British bank to secure theirsales volume in market. Currently, Cadbury Company has running its business in variouscountries. But it still tries to expand business in more distinct areas. Effectiveness ofsuccess of business strategies can be measured when this firm has found to gainprominent number of demands as well as stability in economical rates and currency.When a country is facing inflation then rates of all products get hike and on the otherhand if low inflation is found then value of items gets decreased so it is clear that bestsale of confectionery item (Verbeke, 2013). In addition to this, due to obesity problemsand much concern on health issues, people avoid to buy some confectionery products likechocolates and cookies because these are not allowed by their income because populationis having low per capita income which is a negative factor of venture. ◦Strengths: When demand of a particular product is rise then it will enhance salesperformance. It also reflects goodness of such products as it satisfies needs of people.In this process, Cadbury use to determine desires of customers as well as trends ofmarketplace before manufacturing goods. ◦Weaknesses: When inflation rate becomes high then it would help in increasing pricerates of particular commodities. But it reducing sales performance as people avoid tobuy such products whose rates are increased in inflation time period. 4
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