Influence of Macro Environment on Aston Martin's Business Strategy

This report analyzes the influence of the macro environment on Aston Martin's business strategy, including the political, economic, technological, social, legal, and environmental factors. It also evaluates the internal capabilities of the organization using the VRIO model. Additionally, the report applies Porter's five forces model to assess the level of competition within the organization.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analysing the influence of the macro environment on Aston martin and its strategies....1
P2 Internal environment and capabilities of a given organization.........................................3
P3 Application of porters five force model to evaluate the level of competition present within
an organisation........................................................................................................................5
TASK 2............................................................................................................................................6
Covered in PPT.......................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
.........................................................................................................................................................8

INTRODUCTION
Business strategy is the combination of various plans which company indent to implement in
order to achieve their objectives. Business strategy of an organisation is developed enhance the
productivity and sustainability in that organisation. The main aim of this report is to develop an
understanding about a simple approach for better execution. For this purpose, the organisation of
Aston martin is selected which is a car manufacturing company dealing in sports cars and grand
tourers. This company was established in 1913 and is headquartered in London, United
Kingdom. In this report various models will be used to analyse the impact of external
environment on the business strategy of the company. Further models will also be used to
analyse the internal capability and competencies of the selected company (Ahmad, Mishra and
Daly, 2018). Porter’s five forces is a model of evaluating competitive forces which is used for
selected organisation to identify the industry and market forces which impacts the organisation.
TASK 1
P1 Analysing the influence of the macro environment on Aston martin and its strategies
A business strategy is a set of action plan which company develops to attract customers and
enhance their performance. Business strategy of Aston martin helps them to achieve their goals
by providing an appropriate strategic direction. Mission of this organisation is to be the best in
every area of their business. They want to accomplish this mission by providing most
exceptional customer experience (Mission of Aston Martin, 2020). Vison of this company is to
strongly support their community by being the best place to work. This mission and vision of
Aston martin is aligned with their objective of enhancing productivity, profitability and
sustainability in operations. These objectives are fulfilled by this company by effectively
implementing their business strategy which is divided in three phases. In these phases, company
first stabilise their business then strengthen their core and expand company’s portfolio and then
in third phase, they aim to deliver a sustainable and successful luxury business (Business strategy
of Aston Martin, 2020).
This business strategy of Aston martin is influenced by their external forces and to identify
and analyse this influence, PESTLE analysis is conducted below:

Political – Political environment is the combination of various factors which involves
political stability, policies and regulations. Aston Martin is a car manufacturer which has its
headquarters in United Kingdom. Due to uncertainty in the political environment of UK due to
BREXIT, Aston Martin faces various issues. This region is currently facing exposure to global
political development due to no big change can be implemented in this company. This political
environment impacts the business strategy of Aston Martin as this company cannot expand their
portfolio while facing various regional political issues (Ardley and McIntosh, 2019).
Economical – These factors include economic conductions, interest rates, exchange
regulations and many more. As Aston Martin is operating in the United Kingdom, business
strategy of this company has been impacted as due to rise in the number of high net worth
individuals, company has to enhance their car product portfolio and satisfy the market demand.
Technological – United Kingdom is facing the situation where the interest of alternative
fuels is constantly growing. Due to this factor, company has to change their business strategy and
produce vehicles which can run using electrification. This company also have to change its
business strategy so it can be compatible with changing technology of United Kingdom.
Social – This environment is the combination of various factors such as consumer
preferences and tastes. In current scenario of United Kingdom, consumer preferences are shifting
towards increasing disposal income which impacts Aston Martin as this company has to review
their business tragedy and make changes in it in order to develop their portfolio which can align
with shifting consumer preferences.
Legal – These factors include laws and legislations which impacts the operations and
functions of an organisation. As United Kingdom is no more a part of European Union, there are
various legislations which will be changed. Management of the selected company has to change
their business strategy along with hanging laws. Also due to changing the specific vehicle safety
norms, Aston martin is impacted as they have to develop cars which fulfils all safety norms.
Environmental – United Kingdom is a developed economy with being the host to various
industrial organisations, the government of this region is raising various concerns about carbon
emissions. With changing environmental concerns, Aston martin has been influence as they have
to change their manufacturing process from fuel controlled to electrified control (Bovolenta,
2019).
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All the above factors which are analysed impacts the Aston Martin and its business strategy.
This impact is also analysed below using stakeholder matrix:
Stakeholder matrix is a model which classifies all the stakeholders of an organisation using
the basis of power and interest. In context of Aston Martin, a stakeholder matrix is developed as
follows.
All the stakeholders which are presented above in the matrix influences the Aston Martin
business strategy. The most influential stakeholder in the case of selected company are
shareholders who has high power and high interest due to which their decision making power
can influence the business operations and strategies of Aston Martin. On the contrary, suppliers
are the least influential stakeholders who do not hold any decision making power in organisation
and have low interest in doing so. Such stakeholders have negligible influence upon business
strategy (Downing, 2019).
P2 Internal environment and capabilities of a given organization
VRIO model is used to analyse the internal capabilities of an organisation which is
presented below:
RESOURCES VALUABLE RARE INIMITABLE ORGANISABLE
COMPETITIV
E
ADVANTAGE
Market ✓ - - - Temporary
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Image Competitive
Advantage
Production
Capacity ✓ ✓ - -
Temporary
Competitive
Advantage
Innovation
Capabilities ✓ ✓ ✓ -
Sustainable
Competitive
Advantage
Human
Resources ✓ ✓ ✓ ✓
Potential
Competitive
Advantage
According to above mentioned information it can be analysed that there are certain
factors present on the side of company that are valuable, rare, inimitable and organisable which
support in achieving competitive edge at marketplace. This can be understood using following
points (Ge, 2019).
Valuable:
 Market Image: The market image of Aston Martin is good which act as a valuable asset
for the company as it help in expanding its approach at different geographical location
easily.
 Production Capacity: The production capacity of Aston Martin is valuable as it produce
its automotive with deep investigation and as per customer requirement in order to fill
market gap.
 Innovation Capabilities: It allows the firm in enhancing its competitive edge by regularly
improving the current practices and quality of services.
 Human Resources: The Aston Martin have responsible and skilled employees which help
it in providing satisfactory services to customers (Goffee and Scase, 2015).
Rare:
 Production Capacity: The production department of the Aston Martin maintain its
network with exclusive suppliers, who provide them with high quality equipments that
support in enhancing their effectiveness and support in presenting it rare.
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 Innovation Capabilities: The skills, capability and technological input maintain by Aston
Martin which support it in enhancing the quality of operations which support iot in
making different from others.
Human Resources: It remains quite difficult to find skilled and competent workforce that have
the capability to deal with challenges and that the Aston Martin have which make it different
from others (Hashim, 2017).
Inimitable: Innovation Capabilities: Each and every innovation of an organisable could be
conspicuously patented, therefore, raising the inimitableness in all the brand-new features
present in the company's products.
 Human Resources: Aston martin employees’ talents, competence and skills cannot be
simulate by workers of any other enterprise, therefore, making them rather inimitable.
Organisable:
Human Resources: The workforce in Aston martin is more effectively trained, following
modern technologies as well as useful training equipments and tools. This improve the scope of
coordinating the workers of Aston martin in working in and organisation and helping them in
creating better products or services (Jeston, 2014).
P3 Application of porters five force model to evaluate the level of competition present within an
organisation
Porter Five force analysis of Aston Martin
Industry analysis helps an organisation in understanding their position in market. Porter
five force model concentrate on five area buyer's power, supplier's power, competitive rivalry,
new entries in the industry and threat of substitution. Aston martin is a renowned car
manufacturer and below is industry analysis of Auto-mobile sector in the context of Aston
Martin.
Threat of new entrants – Demand of electric vehicles is sharply increasing in the market
and government is also support sale of electric vehicle because they help in reducing carbon
emission. Many new organisation like Tesla are now entering in auto-mobile industry because
they understand that whole ecosystem is going to change in upcoming time. Threat of new
entrants in moderate for all the existing auto-mobile firms including Aston Martin because of
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above mentioned reason. Heavy investment is required for entering in auto-mobile sector which
restrict entry of small and medium sized enterprise. Technology is another factor that can work
in the favour of Aston Martin as many potential new entrants do have sustainable technology to
run their business (Klettner, Clarke and Boersma, 2014).
Bargaining power of suppliers – Auto-mobile sector has suppliers from various
industries. It include rubber, glass, steel and now IT products also. Suppliers of Aston Martin has
low bargaining power. Number of raw material provider is high and it can considered as the
main reason that company easily switch to another supplier if present one is not agreeing to their
terms.
Bargaining power of buyers – Customers in auto-mobile sector has high bargaining
power because they have many options in terms of companies that offer similar kind of products.
Aston Martin can focus on product differentiation to in order to reduce buyers power; this can be
done by focusing on innovation and better customer satisfaction.
Threat of substitute products – Substitution of auto-mobile is very difficult to image.
The biggest substitution that has happened in this sector is electric cars. This can not be, as such,
considered as substitution as it is more of an up-gradation. Aston Martin do not face any major
threat of substitution of their products as they are dealing in luxury goods and they have also
launched electric car which was demand of the time. Company is also planning to launch more
electric cars in future, this is also to help them in getting more relevant in market (Peng, 2017).
Industry rivalry – Aston Martin operates in auto-mobile industry; luxury sports cars and
grand tourers are the key segments in which company launch their products. Industry rivalry in
luxury segment is high as their many big corporation who are continuously expanding their
market share. Bentley, Tesla, Porsche, Jaguar Land Rover are key competitors of Aston Martin.
Their products are giving severe competition to Aston Martin and they hold majority of the
market share. Aston Martin has to provide something new, in their cars, to their existing
customers and they will have to enter in new emerging markets so they can increase their profits
in long run (Scholes, 2015).
TASK 2
Covered in PPT
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CONCLUSION
It has been concluded from the above report that role of strategy within an organisation is
must towards attainment of success in market. The perfect strategy will be developed after
carrying the effective analysis of external business environment and internal operations of an
organisation. PESTLE is the effective model that will provides an opportunity in effective
analysis of conditions present in market along with opportunities and threats for an organisation.
In overall nature, business environment of UK is quite stable that creates the large number of
opportunities for growth in future for an organisation specially in technological and
environmental aspect. Effective usage of stakeholder analysis provides an opportunity to analyse
the power and interest of stakeholders along with the impact of organisational activities over
them. This will help to take better decision making which are in support of the main
stakeholders. VRIO is the effective framework that will aid in effective analysis of the internal
resources of an organisation. The benefit of same ascertained in the form of grabbing external
opportunities. Porter five forces provides an opportunity to analyse industry situation along with
current position of organisation in market. The integral benefit of all is ascertained in the form of
developing effective business strategy which is competent in nature and able the organisation to
grow in right direction.
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REFERENCES
Books and Journals
Ahmad, W., Mishra, A.V. and Daly, K.J., 2018. Financial connectedness of BRICS and global
sovereign bond markets. Emerging Markets Review. 37. pp.1-16.
Ardley, B. and McIntosh, E., 2019. Business strategy and business environment: The impact of
virtual communities on value creation. Strategic Change. 28(5). pp.325-331.
Bovolenta, L., 2019. The evolution of the concept of sustainable competitive
advantage (Doctoral dissertation).
Downing, J., 2019. Accounting standards and banking regulation: Some effects of
divergence. Research in International Business and Finance. 47. pp.386-397.
Ge, L., 2019. Research on the Innovation Model of Commercial Bank's Private Wealth
Management Business in the Age of New Regulations on Asset Management.
Goffee, R. and Scase, R., 2015. The Real World of the Small Business Owner (Routledge
Revivals). Routledge.
Hashim, M. K., 2017. Developing business strategy in organizations: A review of the
approaches. Journal of Advanced Review on Scientific Research. 32(1). pp.1-13.
Jeston, J., 2014. Business process management. Routledge.
Klettner, A., Clarke, T. and Boersma, M., 2014. The governance of corporate sustainability:
Empirical insights into the development, leadership and implementation of responsible
business strategy. Journal of Business Ethics. 122(1). pp.145-165.
Peng, M. W., 2017. Cultures, institutions, and strategic choices: Toward an institutional
perspective on business strategy. The Blackwell handbook of cross
‐cultural
management, pp.52-66.
Scholes, M. S., 2015. Taxes and business strategy. Prentice Hall.
Online
Mission of Aston Martin. 2020. [Online]. Available through:
<https://www.galpinastonmartin.com/mission-statement-core-values/>
Business strategy of Aston Martin. 2020. [Online]. Available through:
<https://www.astonmartinlagonda.com/about-us/strategy>
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