Analysis of Impact and Influence of Macro Environment on Business Strategy

32- Business Strategy

Contents
INTRODUCTION.......................................................................................................................................3
TASK 1.......................................................................................................................................................3
P1/M1 Analysis of impact and influence of the macro environment on the business and its strategies.. .3
TASK 2.......................................................................................................................................................8
P2/ M2 Analysis of the internal environment and its capabilities for the organization by using effective
models and theories.................................................................................................................................8
TASK 3.....................................................................................................................................................10
P3 Evaluation of the competitive forces by using Porters five forces for the given business.................10
M3 Devise appropriate strategies to improve competitive edge and market position based on the
outcomes................................................................................................................................................11
TASK 4.....................................................................................................................................................12
P4/D1 Devise the strategic planning for the business using range of concepts, models and theories.....12
M4 Strategic management plan.............................................................................................................14
CONCLUSION.........................................................................................................................................16
REFERENCES..........................................................................................................................................17

INTRODUCTION
The business strategy can be referred to as the course of action or the set of decisions
which assists the organization in accomplishment of its target and goals. It is a type of master
plan which is implemented by the business so that it can secure a competitive position in the
market. The business strategy can be understood as the combination of competitive moves or
actions that a business uses in order to strengthen its performance, attract the consumers,
compete successfully and accomplish the target of the company. Strategic management is the
ongoing planning, assessing, monitoring and analyzing the requirements of the company which
is needed in order to meet the goals and objectives. This mainly helps in stocking of the present
scenario of the organization, make strategies, and analyze the effectiveness of the management
strategies which is implemented. There are different types of strategies which can be framed by
the organization that includes business strategy corporate or functional strategies (Vaiciulionyte
and Petraškevičius, 2020). The organization chosen for this report is Sainsbury, on leading
retailer in UK. It was founded in the year 1869 and is headquartered in London. This project will
cover the analysis of external and internal environment, competitive analysis using Porter's five
forces and the strategic management plan using different frameworks
TASK 1
P1/M1 Analysis of impact and influence of the macro environment on the business and its
strategies.
The external environment generally consists of the macro environmental factors that
mainly influence the organization and it affects its working and decision making. There are
various frameworks that can be used by the companies for analyzing the impact of macro
environmental factors. These are discussed below in context to Sainsbury
PESTLE Analysis
It is a model or a tool that is used by the organizations in order to analyze the external factors
which influences its working (Yosandi, Wijaya and Nuh, 2017). In relation to Sainsbury, it is
narrated thereunder-

 Political- It comprises of those aspects which are linked to the political interference in the
organization and stability in the state. In relation to Sainsbury, there is a biggest impact of
political factor on the organization due to Brexit. As UK will no longer be a part of
European Union which will result in the import rates being high. It can lead to increasing
the price of products due to which different number of customers will be lost as they may
find alternate wholesale at cheaper rates.
 Economic- It includes those aspects which includes inflation rate, foreign currency
exchange rates, etc. Sainsbury is dependent on the road transport for shipping its offering
in whole of the UK so any rise in the petrol or diesel made bound the organization to
increase the price of the product. This can result in losing the low income customers and
lack of fossil fuel will pressurize the brand to choose other alternate transport medium.
 Social- It includes those aspects which relates to sociocultural factors. As Sainsbury
earns major revenue from selling the fast food so the shift of UK population towards the
health conscious food may affect its sales and this will pressurize the organization to
bring more healthy options for the customers.
 Technological- It comprises of those factors which relates to adopting technological
advancement and up-gradation. In context to Sainsbury, recently it has introduced the e
commerce store which helped it to cater the tech friendly generation. It also helped in
providing enhanced customer experience. Sainsbury has also deployed various
technologies in its system such as big data and the artificial intelligence so that it can
understand demographic requirements of customers and provide them.
 Legal- It is concerned with those aspects that is relating to laws framed by the legislature.
As there has been changing requirements of customers so the organization need to be at
its toes so that it can meet those demands. Any delay in the approval of regulation can
result in losing the market share and giving the competitors an edge over them. So
Sainsbury must comply with every regulation in order to beat the competition.
 Environmental- It includes those aspects that relates to ecology and the environment.
Sainsbury is a supermarket chain it produces the carbon footprint at high level which can
affect the environmental conditions. By the present climate change movement in UK, the
organization has to ensure that it takes some steps in order to curb the impact of
environment (Direction, 2019).