Macro-Environment Factors Assignment

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Added on 2020-12-24

Macro-Environment Factors Assignment

Added on 2020-12-24

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ORGANISATIONALSTRATEGY

Table of ContentsINTRODUCTION...........................................................................................................................1Macro-environment factors affecting Nippon:.......................................................................1Industry positioning of Nippon using Porter's Five Forces Model:.......................................3Analysing Internal resources and capabilities using VRIO Model:.......................................4Stakeholders' perspective.......................................................................................................6CONCLUSION................................................................................................................................6REFERENCES................................................................................................................................7

INTRODUCTIONOrganizational Strategy can be defined as a series of steps that are taken in order toachieve its future goals and objectives. An effective organisation strategy can help theorganisation in achieving its goals and reach new milestones (Furniss, Curzon and Blandford,2018). This report is based on Nippon Steel & Sumitomo Metal Ltd. which is engaged in steelmanufacturing of products such as steel plates, steel sheets, pipes and tubes. Nippon has itsmanufacturing bases all around the world. Its operational mainly in Japan, Europe, Middle Eastand North America. The given report will focus on four main areas viz. Macro-environmentfactors affecting Nippon Steel, Industry position, Internal resources and capabilities andstakeholder perspectives of Nippon Steel & Sumitomo Metal Ltd.Macro-environment factors affecting Nippon:Macro-environment factors, in a broad context, are concerned with the study of macro-economic variables affecting a particular organisation in which it operates. These factors canmainly be divided as Political, Economic, Social, Technological, Legal and Environmentalfactors. This study of factors is popularly known asPESTLE Analysis. It gives an overall pictureof that organisation in a nutshell. These factors are explained below:PoliticalPolitical factors define the boundaries to the extent of which the government caninfluence the operations of a business or industry. Since Nippon Steel is a global organisation, itsoperations are not governed by public policies prevalent in an individual economy. The WorldSteel Association formulates the rules and regulations for steel manufacturing globally. ThisAssociation formulates a policy in relation to low carbon emissions, Nippon will have to adhereto such regulations and develop a strategic plan that would include both minimization of carbonemissions as well maximization of operational efficiencies. The liberalization policy launched bygovernment can relax the trade restrictions for Nippon Steel in importing and exporting of steelworldwide. This will allows an organisation to grab the raw material to produce eminent steelsheets that can be provided to Auto-mobile organisations (wayu, Lal and Abubakre, 2018).EconomicEconomic factors relate to the variables such as economic growth, interest and exchangerates prevalent in the economy. Nippon Steel will face a challenge in setting up a manufacturing1

base in a country like Israel where there is low availability of steel resources and may have toincur high cost of acquiring raw materials, this would result in increase in the prices of steel inthe market. This may require the management to restructure their variable costs to fixed costsratio and develop a plan to reduce wastage.Countries with booming energy markets such asThailand would help Nippon to achieve cost advantage if they are available easily. This willallows the organisation to provide their products in more economic manner and to ascertain largenumber of profits by providing their sheets in Auto-mobile sector. SocialSocial factors focus on the demographics, values, beliefs and culture of the economy inrelation to a business. Nippon has a work culture of maximum productivity. Its cultural andsocial values would contradict to cultural values and beliefs of US. Thus, it is important for thecompany to harmonize its operational etiquettes in line with US culture. Nippon Steel being aJapanese company would follow a strict line of authority in its organisation unlike its UScounterparts who focus on individualization of roles and responsibilities. This may hampersmooth running of production process and having indirect impact upon the quality of steel sheets(Haynes, 2018). A booming market with high literacy rate would provide better human capitalto the company as well as increase employment opportunities provided by Nippon to the citizensof that economy. Since steel manufacturing requires in-depth knowledge of such processes, itwould be cost effective,in terms of training, for the company to obtain human capital whichalready possesses such knowledge. It help to produce more reliable sheets that can delivermaximum output to the auto-mobile companies. TechnologicalThese factors focus on analysing how innovations made in technology help inadvancement of the business as well as the industry that are set up in the economy. Innovationsmade in Waste Management technology and steel manufacturing techniques would help Nipponreduce wastage and increase efficiency. This will help in improvement of their sales of highdefined sheets within auto-mobile sector. Obsolescence of technology used by Nippon due towear and tear like induction furnace instead of electric furnace would result in increase in costsas well as maximize wastage with reduced efficiency.Legal2

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