Climate Change and Business Strategy

This assignment delves into the challenges and opportunities businesses face in adapting to climate change. It examines the application of Porter's Five Forces and value chain analysis to understand industry competitive dynamics and internal operations within a changing climate. The role of strategic management is explored, focusing on how firms can develop and implement effective strategies for climate adaptation and resilience.

Reflective Accounting Essay
Business Managing

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
A) Present macro and micro environment on the Auto mobiles sub sector in the UK economy
................................................................................................................................................1
B) Internal analysis business environment of Auto mobile sub sector company...................4
Value chain model...........................................................................................................................4
C) Reflection on the usefulness of porter’s five force model.................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Industry analysis is considered as recognising various factors that affect the business
environment of companies in a particular industry that has been taken into consideration in this
assignment. This report will provide a reflection of internal and external environment factors that
provide major influence on the auto mobile sub sector companies in UK (Valavanis and
Vachtsevanos, 2014). There are various business models have been taken in to consideration in
order to provide an understanding about various business prospects. It is considered as one of the
most commonly used strategic tool which has proved its usefulness in different business
situations when the organization needs to explore strategic management models.
A) Present macro and micro environment on the Auto mobiles sub sector in the UK economy
Analysis of industry is considered as tool that facilitates an understanding to the
companies about their position relating to other companies that provides similar products and
services. PESTLE has been used to make external industry analysis of auto mobile industry.
 Political factors: The auto mobile manufacture in developing countries are continuously
under pressure by government. Sub sector of Auto mobile industry has been big source of
revenues for government. In the UK there are large market of auto mobile sector, but for
establishment or expand the business, they have to pay some fund to their politician. It is
the main impact of the political factors on the auto mobile sector (Mandelin and Sidman,
2015).
 Economic factors: These industries are highly affected by economic condition. There are
different types of economic crises in the past and each of them adversely affected the
sales of auto mobiles sub sector companies especially in UK. Through it, their country
also get the effective revenues from the auto mobile sector. Their selling number are very
high in the UK, because there are large market of auto mobile sector, and it positive
impact on the companies and country.
 Social factors: The auto mobile industry attract to the entire society to buy their cars, and
another products. It is become need of everyone in the world, so if anyone doesn't have
any vehicle then their standard cannot be maintained in society. It can be positive or
negative impact on society, because if they are thinking positive, then its need is normal,
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but if they are thinking negative, then its need are very necessary. It is very beneficial for
the entire industry, but people can face some problems (Aithal and Kumar, 2016).
 Technological factors: Auto mobiles sub sector has gone through stages of innovation
since first produced. It is a sector, where technological factors play the very important
role. According time and requirement, technology will be change. However, industry
need to know about need of the people, and use the best technology for sub sector
companies industry. Some companies experiment with smart, driver less and flying cars it
has become difficult for auto mobile manufacture to keep up with the pace of
technological advancements.
 Legal factors: Auto mobile safety has been the biggest concern for law makers globally.
Each and every auto mobile company need to follow the rules of regulation of the law
according to global trend. The entire companies are regularly under pressure to comply
their rules, regulations and law (Gillam and Siriwardena, 2013). There are different laws
in UK that does not allow them to increase their product's price without government
approval.
 Environmental factors: Auto mobile sector is damaging the entire environment of the
country. People has lot of knowledge of environmental problems, they are concerned
with effects of auto mobile on environment. Its effect the health of people, and their
living condition. Other than that, sub sector companies need to manufacture some
friendly cars or without pollutions cars for the people, so it cannot be able to damage
environment. However, there will be growing demand of environmentally friendly auto
mobiles in future (Baldwin and Van Hekken, 2014).
In addition to this, porter's five force model has been analysed in order to gain an
understanding of influencing factors on the sub sector on auto mobile industry. This model is
considered as frame work for the analysis of industry and used for the development of business
strategy. It is considered as one of the most commonly used strategic tool which has proved its
usefulness in different business situations when the organization needs to explore strategic
decision making process (Yunna and Yisheng, 2014). It mainly forces which describe the
strength, weakness and opportunities threats for auto mobile sub sector business units are as
follows:
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 Threats of new entrants: This factors will imply about problems which are faced by the
auto mobile sub sectors in the country by entry of new business competitors in market
like reduction in sales, decline in market share, decline in opportunities of growth,
increasing labour turnover and decline in profitability, etc. (Grant, 2016). Further, it has
been considered sub sectors of auto mobile sector considered as the supplier of auto
mobile firms. These firms will have major threats of entry of new business enterprise.
These business enterprise have their major threats of competitors that has been taken in to
considerations. Threats of substitute products: Other than this, there are various substitutes products of
auto mobiles sub sector enterprises are available in market that has been considered as
important for the organization to gain various important business purposes that has been
taken in to considerations by the enterprise in order to gain various major business
competitiveness in market (Beske, Land and Seuring, 2014). These substitutes’ products
are considered as auto mobile spare parts, electronic companies air condition companies,
tyre companies etc. Thus, from this analysis it has been considered that there major
business substitutes in market which are considered as threats for the enterprises which
are present in external environment of industry. Competitive rivalry: With continuous rise in economic growth of companies, there is
major increase in the rivalry between of auto mobile sector as they are associated with the
auto mobiles companies where is major competition in market (Lin and Ouyang, 2014).
Rise competition within the auto mobile sector will also provide its influence on its sub
sector as they provide their products to companies at lowest possible prices which creates
rivalry between the countries. Bargaining power of suppliers: Other than this, there various important business service
providers which in market that provide raw material to these manufacturing enterprises of
spare parts and accessories and have their major influence on the cost of their products
and services in market (Grant, 2016). In present context, Bargaining power of suppliers in
auto mobile sub sector will also consider as low as there various numbers of suppliers
have been available in sub-sector which provides raw material to these enterprises at
lowest rate and investments thus these business enterprise needs to be continuously
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monitored by these business enterprise so that they will not provide their impact on their
business process in market.
 Customer's bargaining power: It is also a major factors that focuses on the power of
customers of this auto mobile sub sector companies. In this, the factors that provides
impact on customers influence on business like Buyer volume and concentration,
Competitive price, loyalty of customers, price sensitivity, Threat of backward integration,
product differentiation and availability of substitutes in market (Cortimiglia, Ghezzi and
Frank, 2016). In auto mobile sector, the customers of this enterprise will be considered
as auto mobile companies to whom they sell their products. In UK, the bargaining power
of the customers is low as there are limited number of firms which are revealing in
market share and they have major needs to sustain their relationship with the suppliers so
that they will provide competitive prices for the products which are demanded by their
suppliers. Therefore, it is considered to be positive for auto mobile sub sector to
companies in expansion of their business.
B) Internal analysis business environment of Auto mobile sub sector firm
There are various important tools available for the scholars in order to make an effective
research study on analysis of internal environment of sub sector industry (Field and Barros,
2014). Internal analysis is refers to the exploration of an organization's capabilities, cost position
and competitive viability in the market place. It will often incorporates measures which gives
useful information about the organization strengths, weaknesses and opportunities and threats.
The data which are generated from the internal analysis has its major significance as it is used for
development of objectives for strategic planning (Linnenluecke, Griffiths and Winn, 2013). In
present context, analysis of Aston martin is done which is also considered as major international
brand in UK since 1913, and has three major existence in manufacturing of auto mobile and
other vehicles etc. Value chain analysis model has been used to make an analysis of internal
business environment of company.
VALUE CHAIN MODEL
High level model that has used to determine the process used by company to receive its
raw materials, adding values to materials through various stages for the creation of final products
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and then sell that product to customers (Bryman and Bell, 2015). The major goal is to provide
maximum values for vary low possible cost in order to create competitive advantage.
This model includes various important aspects related to internal business environment
are mentioned above:
Primary activities: These activities relates directly to the physical creation, sales, maintenance
and support of firm's product and services. In this, primary activities that relates with Aston
martin brand its process of manufacturing the vehicles.
 In-bound logistics: Process used the by Aston martin for receiving, storing and
distribution raw materials internally (Linnenluecke, Griffiths and Mumby, 2015). The
relationship of company with its suppliers is considered as a process factors in adding and
creation of values. Through development of effective relationship with suppliers,
company has become able to manufacturing innovative design and quality products for
their customers.
 Operations: This factors relies with the system that is used by the management in order
to change the raw materials in to finished products that can be sold to customers
(Rothaermel, 2015). In this, the system of operations which is used by the management of
Aston martin is considered as effective and can be used for creation of values of products
and services between the customers that has been taken in to consideration.
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Illustration 1: Porter's value chain model
(Source: Value Chain Analysis, 2017)

 Out bound Logistics: Further, this mainly relates with the activities which are used by
Aston martin in order to deliver its products to consumers (Linnenluecke, Birt and
Griffiths, 2015). It includes various things like collection storage and systems used for
distribution which are both internal and external to the organization. There are various
important business units that relates with the continuous development of products and
services to customers.
 Marketing and sales: It is the process which is used by the management of Aston martin
to influence their target business class customers to purchase their luxurious and brands
cars as well as other vehicles instead of their competitor brands in market (Cortimiglia,
Ghezzi and Frank, 2016). As per the analysis, Marketing and sales techniques which are
used by company like benefits, discount, rewards and modern channels of
communication have been used by Aston martin to influence more and more customers
towards their brand.
Service:Further, these are also considered as activities which are accomplished by Aston martin
in order to maintain the value of your products or services (Field and Barros, 2014). After sale
services which are provided by company are considered as effective for customers and provide
them benefits instead causing any problems. These services have provided positive influence
brand position and increased their customers base in market.
 Support activities: These are considered as the activities which are accomplished by the
management in order to support the primary activities (Linnenluecke, Griffiths and Winn,
2013). In the given diagram, it has been considered as that each support activity plays a
major role in each primary activity. For example: there are various procurements that
support the operations with certain activities but it also provides support in marketing and
sales of operations.
 Procurement: It is activities accomplished by Aston martin in order to get the resources
which are needed to operate in market (Bryman and Bell, 2015). It includes identification
retail, vendors and potential customers in order to negotiate the best price for their auto
mobile brand.
 Human resource management: As per scenario, company has hired various qualified
and effective employees at workplace that has been taken in to consideration in order to
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gain various business prospect in order to analyse various important strategic business
objectives.
 Technology: Activities which relates to the management and processing of information
as protection knowledge base of enterprise by the minimizing the information the cost of
production which is based on costs of technology, sustaining and maintaining competitive
advances and maintaining technical excellence are sources for creation of values.
 Firm' structure: These are considered as Aston martin support system that relates with
the companies which allows them to maintain daily business operations (Linnenluecke,
Griffiths and Mumby, 2015). There are various accounting, legal administrative and
general management are examples of important infrastructure that businesses can use to
their advantage.
Thus, it can be said that internal business of Aston martin is considered as positive as
they have accomplished all effectively and created a positive value of their firms between their
customers which will provide them support in increasing their market share.
C) Reflection on the usefulness of porter’s five force model
For the accomplishment of present study that is based on the industry analysis of auto
mobile sub sector companies to analysis challenges and opportunities provided by the external
and external environment of industry in which they operate. In order to complete this analysis, I
have analysed various models which are used to make analysis of external environment of Auto
mobile sub-sector industries (Rothaermel, 2015). Further, most effective tool or model which I
have used is Porter's five force model which is created by the Michael porter in 1979 for
understanding the impact of competitive forces on a particular industry. I have selected this
model because it is reliable and provides support the auto mobile sub sector in analysing the
impact the competitive forces and useful in development of strategies for organization.
Through this model, I have analysed the intensity of competition in auto mobile sub
sector industry. The main five force given by Porter is threat of new entry, threat of substitute,
customer's bargaining power, supplier's bargaining power and industry rivalry etc. The stronger
the competitive forces in the industry are the less profitable it is. It has provided an
understanding that an Auto mobile sub sector is Unattractive or will attain low profitability as
there are moderate barriers for new entrants, strong bargaining power of suppliers, strong power
of buyers, Many substitute products are available in market and there is intense competition in
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industry. At initial stage it is used for gathering the information about the each five forces. With
effective market research and using its framework I have analysed that fewer restrictions are
there are for a new business enterprise to enter within Auto mobile industry therefore Existing
companies has a moderate threat of new entrants in auto mobile sector.
I have also identified number of suppliers are in this industry is very low as compared to
auto mobile companies therefore the power of suppliers is also high and they are able to demand
prices as per there requirements from the companies. Further, as there are many auto mobile
companies in countries of UK that provides quality of vehicles and other services at competitive
prices to attract the buyers (Linnenluecke, Birt and Griffiths, 2015). It also fact the buyers will
purchase products from those enterprises which provide them effective quality at lowest possible
prices that is why buyer's power in auto mobile sector is very high. For achievement of high
profitability, companies have concentrated on identification of customer’s preference for
introduction of new products but it has created major problem of substitute’s products for every
auto company in UK. There are various substitutes products are available in market which has
provided major impact on sale of every companies. Thus, there is high threat of substitute
products in auto mobile industry.
Through this model, I have also analysed that there is competitive business environment
in UK, which has led down the profit's margin of every auto mobile sub sector organization and
created a high rivalry industry. It can be said that this model has been to provide a complete
understanding about the industry competitiveness and they have been to gain more competition
within industry. It was also beneficial for me in gaining in effective and positive and
understanding about number the of sub sector companies of auto mobile companies are available
in market. This model has also made be able to make recommendation about the strategies to be
useful for companies to make their industry attractive and increasing their profitability.
CONCLUSION
In this report, it is concluded that industry analysis is an important tool that facilitates an
understanding to the companies about their position relating to other companies that provides
similar products and services. There are various important tools available for the scholars in
order to make an effective research study on analysis of internal environment of sub sector
industry. Porter’s Value chain analysis has also provided an understanding that internal business
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of Aston martin is considered as positive as they have accomplished all effectively and created a
positive value of their firms between their customers which will provide them support in
increasing their market share. At last, it has been understood that main five force given by Porter
is threat of new entry, threat of substitute, customer's bargaining power, supplier's bargaining
power and industry rivalry etc.
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REFERENCES
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Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
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Valavanis, K.P. and Vachtsevanos, G.J., 2014. Handbook of unmanned aerial vehicles. Springer
Publishing Company, Incorporated.
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Online
Value Chain Analysis, 2017.[Online]. Available
through:<https://www.strategicmanagementinsight.com/tools/value-chain-analysis.html>
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