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An Introduction to Organizational Strategy

   

Added on  2021-01-02

12 Pages4016 Words434 Views
ORGANISATIONALSTRATEGY
An Introduction to Organizational Strategy_1
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1Macro environmental factors......................................................................................................1Industry Position.........................................................................................................................3Internal Resources and Capabilities ...........................................................................................4Stakeholders Perspective.............................................................................................................6CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9
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INTRODUCTIONStrategy can be referred to as plan of actions which are formulated in order to accomplishdesired business objectives. An effective strategy supports an organisation in achieving success.It also assists business entity in gaining competitive advantage. Strategies are also developed bymanager in order to provide an appropriate response to changes in external business environmentwhich is very much crucial for maintaining long term sustainability. Proper strategic planning isessential in order to drive an enterprise towards business goals. Strategic planning is completebased on the mission and vision of firm.The report have focus on analysing the macro environmental factors which can influenceor plan of Next clothing company. It also emphasizes on analysing the internal resources andcapabilities of an organisation. Study will include some strategic tools such as Pestle formeasuring the effect of changes in external environmental factor on business.MAIN BODYMacro environmental factorsMacro environmental factors can be referred to as the external variables or forces whichcan have both positive and negative effect on working or business operations of Next clothing.Changes in macro environmental variables such as social, technological, political etc. have greatinfluence on business plan as well as strategies. It also has great as well as significant effect onthe decision of management in an organisation.Next Plc is British multinational organisation operating business in retail sector. Businessentity offers various products such as clothes, home products etc. As company is operatingbusiness globally changes in macro environmental factor can have direct effect on the businessoperations of an enterprise. It is required by manager in Next clothing to use strategic tool suchas Pestle, as this will assist management in identifying those factors which can have impact onthe business as well as influence on organisational plans (Burt, Johansson and Dawson, 2017).Manager in Next clothing should develop suitable strategies as this will support an organisationin providing quick responses to changes in external environmental constituents. In context ofNext clothing, few factors which can have impact on business operation of company are :Political factors: these variables includes changes in laws and regulation related to theclothing industry. It also involves political situation in the nation. Changes in political factors1
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might have direct as well as significant effect on the business operations of Next clothing. Forinstance, Political instability in the UK after Brexit has lead to the decline in the sales andprofitability of organisation. Liberal trade policy has supported an organisation in expansion ofbusiness. It is very much important for management in Next clothing to follow all the regulation,as this will support an enterprise in maintaining its sustainability and growth.Economic factors: It involves increase or decrease in tax rate, fluctuations in prices ofthe products or services, income level of an individual, changes in economic situation of thenation etc. Changes in economic variables have direct and great effect on the profitability of anorganisation. In context of Next clothing, discounting pricing strategy adopted by an enterprisehas lead to the decline in profitability of an enterprise (Pedersen, Gwozdz and Hvass, 2018).Decline in exchange rate has enabled next clothing to gain transactional benefit. IT is requiredby an organisation to keep some amount of profit as a reserve, as this tactic will aid businessentity in reducing the negative effect of changes on its financial performance. Social factors: These factors includes changes in preference of customers, style , trendsetc. all these factor has great effect on the demand for the companies' product in the market. Incontext of Next clothing, changes in social factors have less effect on the demand for the goodsoffered by firm. As business entity design clothes according to the latest trend and consideringthe culture prevailing in the nation. Technological factors: It involves technological advancement which has both positiveand negative effect on the business. In context of Next clothing, technological advancement hassupported business entity in increasing working efficiency. Advance technology has enabled anorganisation to provides various facilities such as online payment to its customers. It has alsoprovided firm an ease in communicating with customer. Advance technology has enabled nextclothing to promote their products or services at large scale (Han, Apeagyei and Tyler, 2017).Development in the technology and increase in the use of the same buy other organisation inclothing sector has given rise to stiff competition. It is required by Next clothing to employadvance technology at workplace, as this tactic will help firm in providing good experience to itsclient which is very much important in order to retain them for long time. It will also helpbusiness entity in gaining competitive advantage.Legal factors : These constituents includes amendments in norms related to industry bygovernment. Changes in legal factors have direct as well as significant effect ion the2
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