Importance of Business Strategy

Added on - 04 Oct 2020

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Business Strategy
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Presenting macro environment factors for Three UK.................................................................1TASK 2............................................................................................................................................5Critically evaluating the organization's internal environmental capabilities using models........5TASK 3............................................................................................................................................8Applying the models, evaluating the competitive force for the company..................................8TASK 4..........................................................................................................................................11Producing the strategic management plan for an organization.................................................11CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................16
INTRODUCTIONBusiness strategy is that working plan which is used to achieve its vision and objectivesand to improve its financial performance as well. Therefore, its main purpose is to attain itsdesired ends and through an effective business strategy, the company can easily grow at furtherlevel of success and accomplish its goals as well. In the same way, report main aim is to describethe importance of business strategy for the firm. The chosen firm for the report is Three UK,which is a British Telecommunication and Internet service provider which is operating underthree global brands. The quoted firm provides 3G and 4G services through its best networkinfrastructure.Report will describe the macro factors that affect the external environment of thecompany by using PESTLE model and Ansoff's growth vector matrix to determine theorganization's strategic positioning. Further, report will describe its internal environmentcapabilities by using SWOT analysis and VRIO and then study will describe its competitive edgeby using Porter's five force model and stakeholder analysis. Lastly, report will produce astrategic management plan by using Porter's generic model.TASK 1Presenting macro environment factors for Three UKTo determine the macro environment factor, the quoted firm uses PESTLE model thathelps to identify the external environment. This is comprises following factors such as:1
Political Factor:This plays an important role in determining the factors that affectThree UK's long term profitability, such that the political condition of UK is quite stable butsudden change in the tax rates can influence the political condition of a country and it directlycreates negative impact upon the firm's financial performance. Such that its increases the rates ofservice which is provided by Three UK to their customers (Pucheta‐Martínez and Bel‐Oms,2019). On the other side, telecom industry should also be fit to essential government regulationssuch as Safety and privacy in order to run its business smoothly.Economical factor:In 2013, recovery of Gross Domestic Product and stability of theinflation rates after the economy recessionary period creates the positive impact upon theconsumer as well as telecommunication industry. This helps to improve the company's financialperformance but on the other side, if the country does not have stable economic condition then itaffect the business at negative way, such that if there is an inflation, then the price of the servicesthat offered by Three UK will be high and the customers did not want to spend high amount forthe services. This led to decreases in its overall services and as a result, its financial services getsaffected. Apart from this, though unemployment rate decline in past years, which further remainhigh an limit the demand on some mobile telecommunication services. But at the end, disposableincome has continued which further rise the demand of their customers and creates positiveimpact upon the company's overall profitability as well.2Illustration1: PESTLE model(Source:PESTLE model, 2018)
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