Macro Environment Analysis Assignment

MACRO
ENVIRONEMENTAL
ANALYSIS

EXECUTIVE SUMMARY
This report is based on the Atlassian Company which was a IT company start-up by
entrepreneurs Scott Farquhar and Mike Cannon-Brookes and the huge success that they were
able to achieve in a limited time period. This report shows that by applying relevant theories and
frameworks, company ca further expand themselves. It was identified that Company should work
upon building latest technological innovations like XaaS and develop proper strategies to ecpand
in Asian markets.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
MACRO ENVIRONEMENTAL ANALYSIS...........................................................................4
INDUSTRY ANALYSIS............................................................................................................5
COMPANY ANALYSIS............................................................................................................7
COMPETITIOR ANALYSIS.....................................................................................................8
STRATEGY ANALYSIS...........................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
APPENDIX....................................................................................................................................11

INTRODUCTION
External environment affects the operations of the company in various aspects and helps them in
formulating better practices and methods. In the present report, Atlassian Company has been
taken which is a Australian based software company set up by entrepreneurs Scott Farquhar and
Mike Cannon-Brookes. They were able to make their company successful in a very short time as
they came up with many innovative ideas like monthly subscription, recommendation by
satisfied customers (Feng Zhang and Dai, 2019). Further, this report has used various
frameworks and models in order to analyse the different aspects of the environment in which
industry operates like industry analysis, competitor analysis, company analysis, strategy analysis
etc. lastly, various recommendations have been made adoption of which will help the company
in improving their services.
MAIN BODY
MACRO ENVIRONEMENTAL ANALYSIS
For conducting an external environment analysis of the industry in which Atlassian Plc
operates, PESTEL Analysis can be used.
Political Factors :– Under this, the various political attributes that affect the company are
evaluated. Atlassian operates in IT industry and there has been a rising number of protocols
applicable on this industry. Since its parent company is based in UK, recent Brexit and selection
of Donald Trump as US president has also affected the company in a positive manner as
strengthening of US Dollar has improved the foreign exchange operations of the company as
they accept all their payments solely in US $.
Economical Factors :- There are many economical factors like inflation rate, interest rate,
foreign exchange rate etc. which determine the level at which the economy is operating and this
affects the activities and scope of companies as well. Atlassian Plc experiences a lot of
governmental intervention as it is a very strictly regulated industry and the economy of Australia
is regularly growing (Jenkins and Williamson, 2015).
Social Factors :- Society in which the company operates is a very important factor in
determining a company's success. Atlassian is a believer of including and encouraging everyone
and this has created a positive impact on the people who support the activities of Atlassian.
Technological Factors :- The technology is regularly changing and updating itself and the only
point where Atlassian is lacking is insufficient development of Cloud Computing and XaaS
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service under which there are rapid changes but the companies who have successfully
implemented and provided these services are the global leaders (Abdel-Basset, Mohamed and
Smarandache, 2018).
Environmental Factors :-Atlassian Company has been regularly updating themselves and they
have improved their CSR and other welfare activities adopted by them. Already there activities
are eco-friendly as they have paperless transactions and their main input is the levels of
technology that they use. Their activities are already green and it can be further maximized by
reducing the wastage and consumption of paper if any.
Legal Factors :- The company operates within the rules and regulations developed by the
legislation and they work within those boundaries. Despite huge number of cyber crimes, the
company has made their software foolproof and impossible to copy.
On a Global level , Atlassian Company is operating at a vast scale in many countries.
They have a very strong presence as their operations in international markets are very strong and
the foreign currency of Australia is very strong. On a domestic level, Atlassian company is a
leader in the IT industry as they have bagged down some very prominent clients like Proctor &
Gamble, Netflix etc.
INDUSTRY ANALYSIS
For determining the position of the business and the stage at which it operates, Life cycle
analysis is extremely important (Abushova, Burova and Suloeva, 2016). There are fives stages in
the life cycle of a business which are Start-up, Growth, Shake-out, Maturity and decline. At
Start-up stage, the company is at a beginning phase where it has just introduced its operations
and activities in the market; at growth the company succeeds in its different business operations
and continues to grow further. The third stage is the Shake out stage at which growth is slower
and companies focus on achieving economies of scale and is followed by maturity stage under
which the company becomes unbeatable and the competition level becomes refined. At the last
stage, i.e. the decline stage shows the ending point of any business where the revenues of the
company decline and they go down the scale. At present, Atlassian Company is at the Growth
stage where it is still expanding its operations and business activities. In order to analyse the
environment in which the industry is operating and the modes of entry, Porter's Five Force
Analysis is an important factor. The five facets of Porter's model include :-
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Existing Rivalry :- There are continuous developments in the industry and therefore the
competition level is extremely high as every company tries to tap the most recent development
and the first company gets the maximum benefit (Laseter and et.al., 2017).
Threat of New entrants :- At present, in the IT industry, Atlassian company experiences
medium to low range of threat from the new entrants in the industry as it is very easy to enter in
the IT sector due to lower investment requirement, but it is very difficult to create products and
compete at the level Atlassian Company is operating.
Threat of Substitutes :- Atlassian has reached the stage of maturity and therefore it is easier for
them to avoid getting easily substituted. The existing industries cannot compete easily and
therefre, the threat of getting substituted is comparatively medium to lower.
Bargaining power of Buyers :- The bargaining power of buyers is subsequently high because of
easy switching as there is a large variety of options that are available to the users but by
introducing the concept of monthly subscriptions at affordable prices, Atlassian has been able to
reduce the switchover thus making it medium.
Bargaining power of Suppliers :- The suppliers in this industry mainly constitute the workers or
engineers who create the software. They have high power due to easy switching facility as there
is a high demand of excellent and educated workers but Atlassian has managed to control it by
creating a happier and satisfied workforce (Feng Zhang and Dai, 2019).
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COMPANY ANALYSIS
For analysing the core competencies of the Atlassian company and identifying its unique
capabilities and resources, application of resource based model and VRIO framework are the
best solutions. Resource Based Model believes that every organization has a unique set of
certain resources and their capabilities. At Atlassian, there Uniqueness is associated with the
creative idea of monthly subscription which was developed by their entrepreneurs Scott Farquhar
and Mike Cannon-Brookes. The major resources of the company includes the engineer and the
work personnel hired and trained by them as their innovative abilities and grasping power helps
the company in developing innovative software. They employ a capable and efficient employee
base where everyone works according to their core competencies or strengths which help in
increasing the product value and benefits (Phadermrod, Crowder and Wills, 2019). This helps the
company in generating above average returns. The strengths of the company include unique
customer employee relationship and highly distributed workforce which help in increasing the
revenue for the company. However, there are certain weaknesses as well that are associated with
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Illustration 1: Porter's 5 force analysis for Software
Industry
Source :- Porter's Five Forces, 2019

the company like major threat to the bet products of the company which are JIRA and
Confluence. Also, they need to maintain the rate at which their customers are growing so that it
can sustain the different operations and practices of the company.
VRIO framework is another framework which helps in strategically analysing the
resources that are available with the company. Valuable :- This aspect involves analysis of how
valuable the resources of the company are and whether the company can exploit the various
opportunities available with them and their efficiency in neutralizing the threats that Atlassian
faces. At present, the company is on a growth scale where it is efficiently exploiting all the
resources that are available to them. Rarity involves the easy availability of the company's
resources and how easily the competitor can gain access to it. Atlassian has a highly competent
employee base which makes it increasingly rare for the competitors to fight with them.
Imitability is the third aspect which analyses how easy or difficult it is to copy the firms
resources and utilize them. Atlassian focuses on developing intellectual strength which cannot be
easily imitated by the competitors. Organized is the last part in which it is evaluated whether the
firm's resources are organized and operate in a defined manner and process and at Atlassian, all
the activities are performed in a pre determined manner which helps them in working in a
systematic manner (Zafar and Kantola, 2019).
COMPETITIOR ANALYSIS
For analysing the competitive environment surrounding the industry, it is necessary to
conduct a market commonality and resources similarity analysis. Market Commonality involves
analysing different factors of which market is composed of identifying the various segments and
resource similarity indicates the comparison levels up to which a firm's tangible and intangible
resource can be compared. By combining these factors, it becomes comparatively easier to
determine the different competitors that are can directly compete with the Atlassian company.
Based on the operations of the company, there are 3 different categories of the competitors of
Atlassian company which are It teams, Software teams and Business teams and includes
industries like Microsoft, Google, Zendesk, Slack etc.
The different competitors of the Atlassian Company have been increasingly focusing on
becoming a one stop solution provider for all the problems that they experience so that they can
create niche marketing and increase the competitiveness. Also, the recent technological
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innovations like XaaS and Cloud Computing have been increasingly applicable in the services
provided by many competitors (Ge and et.al., 2019).
STRATEGY ANALYSIS
At Atlassian, the major strategies that they currently follow involve, highlighting those
factors that make the company 'stick out' in the present market. They have focused on
development of excellent software and developing great teams. Also, the company has given top
priority to customer satisfaction and this is the reason behind the success of their philosophy that
a satisfied customer will recommend their software further to potential customers thus increasing
their customer base. The present strategies that they have adopted have helped them in building
their core competency which is affordable and easy to understand software which has helped in
increasing the customer friendliness and their comfort.
However, in order to further expand their market and increase the customer base, the
Atlassian company can adopt some strategies like :-
 Developing better channels and building partners in countries like China, India.
 Identify the potential customers and develop and implement targeted web based
marketing.
 Generate various options or language which users can select as per their convenience.
Thus, in order to expand in new markets and to develop new products, the company can develop
better policies which will further expand the operations of the company.
CONCLUSION
The research conducted in this report helps in analysing the importance of various factors present
in the external environment and their impact on the operations of Atlassian Company. PESTLE
analysis helped in determining that some factors like political, environmental etc. have benefited
company in a positive manner. Further, porters five force analysis was conducted and resource
based model helped in analysing the core competency of the firm. Lastly competitor analysis
helped in identifying the various competitors and their different activities which have assisted in
modifying the practices of Atlassian Company and the strategic analysis has helped in
identifying new strategies and developing new practices which will help in further expanding the
operation of company.
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REFERENCES
Books and Journals
Zafar, A. and Kantola, J., 2019, July. The Effect of Macro Environmental and Firm-Level
Factors on Open Innovations in Product Development and Their Impact on Firms’
Performance. In International Conference on Applied Human Factors and
Ergonomics (pp. 61-71). Springer, Cham.
Ge, B. and et.al., 2019. Succession of soil macro-faunal biodiversity in forests converted from
croplands after long-term coastal reclamation. Soil and Tillage Research. 186. pp.165-
171.
Zafar, A. and Kantola, J., 2019, July. The Effect of Macro Environmental and Firm-Level
Factors on Open Innovations in Product Development and Their Impact on Firms’
Performance. In International Conference on Applied Human Factors and
Ergonomics (pp. 61-71). Springer, Cham.
Phadermrod, B., Crowder, R. M. and Wills, G. B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management.44. pp.194-203.
Feng, X., Zhang, B. and Dai, Y., 2019. Competitive Analysis of the Online Financial Leasing
Problem with Price Fluctuation under the Consumer Price Index. IEEE Access.
Laseter, T. M. and et.al., 2017. Tork Corporation: Competitive Cost Analysis. Darden Business
Publishing Cases, pp.1-9.
Abushova, E., Burova, E. and Suloeva, S., 2016. Strategic analysis in telecommunication project
management system. In Internet of Things, Smart Spaces, and Next Generation
Networks and Systems (pp. 76-84). Springer, Cham.
Abdel-Basset, M., Mohamed, M. and Smarandache, F., 2018. An extension of neutrosophic
AHP–SWOT analysis for strategic planning and decision-making. Symmetry.10(4).
p.116.
Jenkins, W. and Williamson, D., 2015. Strategic management and business analysis. Routledge.
Online
Porter's Five Forces. 2019. [ONLINE] Available
through :<https://www.strategicmanagementinsight.com/tools/porters-five-forces.html>
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APPENDIX
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