Business Strategy: Impacts and Influences of Macro Environment

This article discusses the impacts and influences of macro environment on business strategy, using Cadburys and its product Boost Guarana as a case study. It analyzes the social, legal, economic, political, and technological factors that affect the business, as well as the internal environment and capabilities of Cadburys. The article also includes a stakeholder analysis and SWOT analysis of the company.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Impacts as well as influence of macro environment..............................................................1
TASK 2............................................................................................................................................5
P2. Analyses of internal environment along with capabilities.....................................................5
TASK 3............................................................................................................................................8
P3. Application of Porter's Five Forces model............................................................................8
TASK 4..........................................................................................................................................10
P4. Range of theories as well as strategic plan..........................................................................10
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business strategy is characterised to competitive action taken by members of an
institution for planning ahead, attracting broad customer segment, strengthening performance,
accomplishing business goals addition to attaining competitive advantages (Brewster, 2017). It
provides guidelines for executing as well as carry forwarding all operations, tasks and activities
in systematic format so to meet all the desired outcomes. For gaining more knowledge about
business strategy, the selected entity is Cadburys and its product is Boost Guarana. It is one of
the multinational confectionery institution which was established by John Cadburys in the year
1824 and has its headquarters at London, England. The report includes analysis of influence
addition to impacts of macro environment on business strategy. It also analyses internal
environment addition to organisational capabilities through suitable framework. In addition,
competitive environment is properly evaluated with Porter's Five force model. At last, report also
includes application of models and concepts together with devising strategic plan.
TASK 1
P1. Impacts as well as influence of macro environment.
Definition of strategy
Strategy is defined as series of plans as well as decisions that are framed to achieve
objectives of entity. In other words, strategy is said to general plan or pattern of activity that are
adopted to achieve desired results in future duration.
Difference between corporate, marketing as well as business strategy.
Basis of
differences
Corporate strategy Marketing strategy Business strategy
Meaning Corporate strategy is said
to directions that are
taken by corporate units
with the goal to acquire
success in long term.
Marketing strategy is
defined to overall game
plan so to reach
prospective consumers as
well as turning them into
potential customers for
organisational products.
Business strategy is
characterised to set of
actions or decisions
that assists business
entrepreneurs to
achieve objectives.
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Formulated by Corporate strategies are
formulated by top level
management of any
institution.
Marketing strategies are
designed by top
authorities along with
marketing department of
institutions.
Business strategies are
generally formulated
by middle level
management of
organisations.
Concerned with Corporate strategies are
usually concerned with
business scope addition to
overall objectives so to
fulfil expectations of
stakeholders.
Marketing strategies are
concerned with planning
marketing programs for
realizing goals of
company.
Business strategies are
primarily concerned
with strategic
decisions including
product choice,
customer satisfaction
as well as competitive
advantage.
Difference between vision as well as mission statement
Basis of Difference Mission statement Vision statement
Meaning Mission statement are said to
brief description about
organisational fundamental
purposes. It talks about current
leading future.
Vision statements are termed
to aspirational description
about what organisation likes
to attain in mid term together
with long term future. It talks
about future.
Statements Mission statement of Cadburys
is to built reputation on quality
as well as continuous
improvements of commitments
they ensure to promise
(Cadburys's Mission
Statement. 2019).
Vision statement of Cadburys
is to work together so to build
brand people love.
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Macro environment: Situations that exists within economy as well as affects
environment are characterised to macro environment. It states the ways in which macro
economic conditions influences performance of an entity. The factors that affects the
environment are employment rates, monetary policy, consumer spendings, GDP, inflation and
fiscal policy. For analysing impacts together with influences of elements associated with macro
environment, SLEPT analysis is opted.
SLEPT analysis: It is one of the method that entities uses to assess external factors
which influences operations for becoming competitive in market. Business manager of
Cadburys uses such analysis to devise future strategies in order to dealt and respond with
unforeseen negative circumstances that has chances to occur in coming phases. It comprises of
six elements such as social, legal, economic, political and technological (SLEPT analysis of
Cadburys, 2019). Elaborated analysis of all elements in context to Cadburys addition to Boost
Guarana is as follows:
Social: The factors related to cultural attitudes, workplace tends, buying behaviour and
belief are part of social factors. Within UK, the customer preferences and taste for any product
changes frequently due to the availability of numerous products as well as increasing awareness
among customers. As customer preferences changes frequently that results in impacting as well
as influencing strategies of business managers of entity. It further results in impacting demand
and supply for commodities sold by company. All the factors are favourable for entity as
business manager of Cadburys are paying response towards changing customer demands and for
this, they have undertaken partnerships with other brands. Other then this, the entity has also
participated in campaigns for reintroducing various chocolate bar, named as Boost Guarana. The
undertaken proactivity can act as opportunity for firm to influence customers to buy the product
which can help Cadburys and its products to ignore negative impacts addition to influence
strategies to be changed by managers.
Legal: Within UK, several legislations are implemented including consumer rights,
product safety, adverting standards and many more. Administrators of Cadburys should ensure
that all its departments together with units across nation complies with legislations associated
with corporate world. All the legislations are favourable for company as all leaves positive
impacts on Cadburys as well as its products as all the plans and strategies are devised as per the
legislations that helps in establishing good brand image in market. But at same time, there are
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certain elements that changes rapidly resulting in influencing strategies as in these circumstances
it is difficult to implement fast modification in organisational procedures. Distinct legal policies
including Food Safety act, Health Protection Act and General Food Law regulation are impacting
Boost Guarana as managers frames decisions according to legal policies (Cavusgil and et. al.,
2014).
Economic: Elements related to economic factors are interest rate, disposable income,
economic growth and governmental activities. Economic conditions within UK are strong which
further aids in growth of business institutions so that they can come up new innovations in
products and techniques. One of the programme initiated by UK government is smart Grants that
further assists companies like Cadburys to aid innovations (Innovation funding for game-
changing ideas from business, 2019). For the managers of the entity it is important to be aware
about such programmes addition to changes as these leaves strong impacts on activities of
business. Sudden changes within such factors results in unfavourable for Cadburys as well as its
product as it requires to change existing strategies into new ones that further decreases profits of
the entity due to involvement of additional factors resulting in negative impacts.
Political: Operations of Cadburys are executed within UK where political system is
stable that facilitates sustainability for long run. In addition, government authorities of such
country has reduced corporation taxes to 19% which was earlier 21% that provides opportunities
for Cadburys to enhance profit margins (Corporate tax in UK, 2019). It is favourable for the
entity as it impacts in positive manner on business revenues and making improvements in
strategies for products like Boost Guarana. Other then this, Brexit is another political factor that
impacted as well as influenced organisational strategies as it created hurdles in importing as well
as exporting raw materials for manufacturing products from other countries that resulted in huge
production costs together with lower profits.
Technological: These are considered as variables that are used to evaluate alternatives in
context to technological capabilities. UK's technological market is growing 2.6 times faster as
compared to other economies (Technological market of UK, 2019). Technological advancements
is one of the factor that requires close attention of business manager of Cadburys for elimination
negative impacts on company with its strategies. Due to frequent changes in technologies makes
current technology obsolete and for this, Cadburys has altered its packaging from plastic
packaging to eco friendly packaging as well as production techniques for Boost Guarana that acts
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as favourable factor as these helps in reducing impacts of plastic on economy which further
benefits in gaining recognition of targeted audiences serving as opportunity to company. Recent
technological advancements impacts in positive ways as business managers uses pathogen
system together with filling patents in context to heat resistant chocolates. As Boost Guarana is
sold through online technologies which creates more product demand that influences strategies
of managers in positive aspects.
Stakeholder analysis: It is defined as procedure to examine activities of people
associated with projects so to prioritise, manage addition to engage them effectively. In other
words, it is described as identification of people involved in project and group them as per their
influence, participation level and interest. Stakeholder analysis benefits Cadburys in identifying
potential issues which has changes to disrupt project, addressing needs with expectations of each
stakeholder, keeping them informed about project and associated activities and minimising
adverse effects on projects. In context to Cadburys Boost Guarana, the internal stakeholders are
management, owners, suppliers and trade unions where as external stakeholders are government,
local communities and customers. Their level of interest and powers are states below:
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(Source: Self Generated)
High power, high interest: Herein, owners and management are the main stakeholders
who have high power as well as high interest for taking decisions of the entity and its products.
In context to Cadburys Boost Guarana, owners and managers are the one who takes all the
necessary decisions.
High power, low interest: Stakeholders such as trade union and government are key
stakeholders who have high power in the company but low interest in the workings of the
company. Trade unions as well as government have low interest for Cadburys Boost Guarana but
have high powers to influence decision makings.
Low power, high interest: In this category, customers and suppliers falls in this category
who have low power in company decisions but have high interest in the company workings.
Customers ans suppliers are the one who have high interest for Cadburys Boost Guarana as the
product is made for them only but have low powers to get involve in its decisions makings.
Low power, low interest: Herein, local communities are the considered stakeholders
who are least interested in organisation working and have less powers. In context to Cadburys
Boost Guarana, local communities are considered as they have low powers and low interest in
the product.
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TRADE UNION OWNER
GOVERNMENT MANAGEMENT
POWER
SUPPLIERS
LOCAL COMMUNITIES
CUSTOMERS
LOW HIGH
INTEREST
Illustration 1: Stakeholder Analysis Matrix of Cadburys Boost Guarana

Conclusion: As per the stakeholders analysis, it is concluded that various stakeholders
are involved with decision making of Cadburys Boost Guarana that has distinct powers and
interest.
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P2. Analyses of internal environment along with capabilities.
Internal environment: The elements such as members, factors, culture and events that
exists within entity as well as are controlled by managers are aforesaid to internal environment. It
is essential for all business concerns to properly analyse all the associated elements of the
environment. Internal environment of Cadburys is analysed with SWOT framework.
SWOT analysis: With this model, business concerns identifies strength, weaknesses by
analysing internal factors and threats, opportunities by analysing external factors. Assessment of
the framework in context to Cadburys together with Boost Guarana is as stated:
Strength Weaknesses
 All the products manufactured by
Cadburys are designed as per customer
preferences which helps in retaining
loyal customers (SWOT analysis of
Cadbury, 2019).
 Having strong brand image helps the
entity in positioning Boost Guarana
through distinct marketing campaigns.
 Cadbury is only dependent on beverage
addition to confectionery market that
limits its expansion in other areas of
business.
 The company has captured large market
segment but shares of its products such
as Boost Guarana are low in
comparison to other products that
impacts on its revenues.
Opportunities Threats
 Cadbury has opportunity to increase
global shares by entering into emerging
markets of China addition to Russia.
 Production of Boost Guarana can be
done in low cost countries where cheap
labours are available resulting in saving
various costs.
 Existence of competitors from local
together with global chocolate brand
affects market share of company.
 Growing concerns about health
conscious as well as obesity is one of
the threat for product of the entity
(Ghezzi, 2013).
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Conclusion: It is concluded that SWOT analysis is best framework to analyse internal
environment as it provides details about organisational strength, threats, weaknesses as well as
opportunities.
McKinsey's 7S Model: The framework was introduced by McKinsey inn order to
facilitate changes in company, identifying reasons for the changes in areas, facilitate mergers of
entity and implementing new strategy. The model has various advantages such as focuses on
coordination of activities, strategy implementation, connecting research with practices of
management and maintaining aspects of hard as well as soft elements. Following are the main
elements of the model in relevance with Cadburys:
Illustration 2: McKinsey 7s model. 2019
( Source: McKinsey 7s model. 2019)
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Strategy: It is termed to a plan for achieving advantages in competitive world. For
operating activities of business in organised ways it is essential to devise distinct strategies.
Managers of Cadbury uses approaches of product development strategy through which distinct
flavoured chocolates are launched for fulfilling needs of market.
Structure: Organisational structure is a combination of divisional make-ups, corporate
hierarchy together with chain of command. It depicts management configuration as well as
workforce responsibility. For Cadbury it is necessary to precede activities with decent structure
in order to manage the workings properly (Mckinsey 7s model, 2019.). Hierarchical structure is
followed at all premises of selected company through which communication is done effectively.
System: The element is said to continuous procedures, decision making as well as
workflow for marking standard operations. In context to Cadbury, administrators emphasis on
security management system so to control and manage sensitive data by eliminating chances of
leakage of confidential data. Other then this, managers also follows marketing systems to
promote products and acquire growth.
Style: It speaks about management approaches that takes the entity towards leading
directions along with influencing productivity, corporate culture as well as performance.
Management team of Cadbury follows various leadership styles including democratic style,
transactional style and coach style leadership so to provide guidance to personnel in effective
aspects that contributes in workforce development as well as business growth.
Staff: No organisation can work without staff members. Staffs are personnels who work
for institution. Cadbury has more than 70000 staff members who has competencies and
capabilities to give productive results that contribute in business development.
Skills: Skills are termed to talents and abilities to accomplish distinct activities. It is
essential element that requires more emphasis of top executives. At Cadbury, more emphasis is
on problem solving skills, decision making skills as well as communication skills within
personnels for achieving objectives (Grover and Kohli,2013).
Shared value: These are said to accepted standards addition to norms that influences
behaviour of management as well as staff members. At Cadbury, all the standards are set by
managers for providing directions throughout the completion of operations. The managers pays
accurate compensation to its personnels together with build favourable working climate.
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Conclusion: It is concluded that various soft elements as well as hard elements of
McKinsey's model are associated with Cadburys and Boost Guarana.
TASK 3
P3. Application of Porter's Five Forces model.
Porter's Five forces model: The framework was implemented by Michael Porter to help
institutions to determine competition within sector or industry. Most strategic decisions are taken
by organisations as per the tool that determines current business situations. It include five forces
that are properly analysed by business manager of Cadbury. The elements of the model in
context to Cadburys as well as Boost Guarana as as discussed:
Illustration 3: Porter's five forces model, 2019
(Source: Porter's five forces model, 2019)
Rivalry among competitors: Within beverage and confectionery sector, competitive
rivalry is high due to existence of uncountable firms. With the force, Cadburys managers
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analyses competition level within confectionery industry. Further, all institutions whether large
or small analyses their ability to survive and sustain in dynamic market together with wide rival
companies. Some of the rivals of entity are Lindt, Mars, Ferrero, Nestle as well as Choicolate
artisan Chocolates that offers similar commodities at reasonable prices in context to Boost
Guarana.
Buyer's bargaining power: When buyers of product are more then there is high
bargaining power of customers but in contrast when less buyers are present then power of buyers
is generally high. In confectionery industry, end customers are present in market for all
companies (Porter's five force model, 2019). In context to Cadburys, manager shave to
categorise buyers as retailers or consumers. The company has strong customer base for Boost
Guarana and has captures wide market shares. Thus, buyer's bargaining power is low due to
presence of huge customer base.
Threats of Substitutes: Substitute products are those commodities that offers similar
benefits to large consumers. Cadburys has high substitute threat due to number of substitutes in
the market. Large scale companies like Ferraro, Choicolate artisan Chocolates and Lindt offers
similar products like Boost Guarana.
Threat of new entrant: In present context, the confectionery market is controlled by
popular brands. When a new company launches itself then powers of another firms gets affected
because of attractive innovations offered by new entity. Confectionery industry is large industry
in which brands wants to enter but it is essential for them to acquire huge findings addition to
implementing marketing activities that creates barriers or hurdles in the entry of new
organisation. Hence, new entrant threat for Cadbury as well as its product including Boost
Guarana is low as it is difficult for other businesses to become component part of such industry.
Supplier's bargaining Power: Such force is related to power that suppliers have through
which they increases are of raw materials that are required in production procedures (Martinez-
Simarro,Devece and Llopis-Albert, 2015). If more number of suppliers are available with
organisation then suppliers have relatively low powers and vice versa. Cadburys managers
maintains relations with huge suppliers so to get raw materials in low rates. Thus, when one
supplier increases prices then managers switches to another suppliers to buy raw ingredients for
Boost Guarana.
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Conclusion: as per the above discussion it is concluded that the forces that are high as
wel as creates threats for Cadburys along with Boost Guarana are Rivalry among competitors,
Buyer's bargaining power and Threats of Substitutes. In contrary, the forces that have low threats
are Supplier's bargaining Power and Threat of new entrant.
TASK 4
P4. Range of theories as well as strategic plan.
Porter's generic strategic model: Such model was propounded by Porter with the
objective of helping entities to find suitable path to attain growth. It comprises of distinct
elements that are used by companies to perform future activities that results in growth
attainment. The elements in context to Cadburys together with Boost Guarana are:
Illustration 4: Porter's Generic strategy Model. 2019
(Source: Porter's Generic strategy model. 2019)
Cost leadership strategy: Herein, organisations plans activities for becoming lowest
cost producer in the industry so to acquire huge profits. It is driven by business scale, cumulative
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experience, efficiency as well as scope. If managers of Cadburys adopts this strategy then they
can emphasis of mass production for its products along with reducing costs.
Differentiation strategy: Herein, business concerns launches unique commodities that
are different from rivals in wide market for attaining competitive benefits. The strategy is risky
as it requires huge monetary investments in implementation of activities (Porters generic
strategy model, 2019). In order to work with this strategy, Cadburys managers are required to
conduct good research as well as abilities to take risks for attaining growth.
Focus strategy: With this strategy, businesses concentrates on targeting specific niche
market via understanding market dynamics and customer unique needs. They are also required to
build loyal relationships with customers. If business manager of Cadburys uses this strategy then
they have to focus on cost addition to product differentiation.
Thus, managers of Cadburys addition to Boost Guarana should go with focus strategy
through which they can target niche market for its products. With this, they can properly focuses
on cost prising as well as manufacturing different products against that of rivals.
Ansoff Matrix: The framework was developed by H. Igor Ansoff for guiding entities so
that they can search suitable strategic business options. It comprises distinct elements that firm
chooses to attain growth. Strategies of the model are under beneath:
Illustration 5: Ansoff matrix. 2019
( Source: Ansoff matrix. 2019)
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Product development: As per the strategy, business concerns launches new commodity
within the current market for attracting large customers together with strengthening market
shares. With this strategy, organisations emphasis on detailed insights, innovations as well as
research.
Market development: This is the strategy through which entities focuses on selling
current commodities in new market so to enhance its profits and expand market area. Possible
ways through which managers of the entity can approach the strategy are new packaging, new
geographical area, different pricing policies as well as new distribution channels (Ansoff matrix,
2019).
Market penetration: With this growth strategy, business firms emphasis on selling
existing product with the existing market for maximising profits. They uses alternative methods
to succeed growth such as increasing product consumption, changing attributes or adding more
values.
Diversification: with such growth strategy, more emphasis of entities are on launching
new product in new market area through expanding in distinct countries. This strategy is
considered as more risky as well as requires clear idea about needs of new market as moving in
new area requires proper research and finding suitable location (Scholes, 2015).
From the above growth strategies, managers of Cadburys Boost Guarana can choose
market penetration as well as diversification strategy for achieve growth. The entity can
introduce its existing product by modifying its attributes in similar market by market penetration
strategy. Also they can enter in new markets of Adalar with some innovate product.
Strategic marketing plan: Cadburys managers are planning to introduce same product
but with different packaging in the same market area. The strategic marketing plan that is
formulated by busienss managers of Cadburys so to communicate growth strategy for Cadburys
Boost Guarana is as follows:
Mission statement: The mission statement of the entity is that their reputation is built on
quality and they commit delivering quality products and promises to make improvements.
Objectives: In context to Cadbury Boost Guarana, the objectives are to increase profit
margins by 15% in coming 1 year. Other than this, the company has objective to enhance market
shares by 20% within 1 year.
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STP strategies: The strategies to craft messages as well as delivering messages through
developing digital strategy are as follows;
Segmentation strategy: For Cadburys Bosot Guarana, the whole market is segmented
into distinct manner. Managers uses behaviour segmentation, demographic segmentation and
psycho graphic segmentation strategy to place the product with different packaging in front of
existing customers.
Targeting strategy: For such product, managers are planning to target people within age
group of 15 years to 65 years who consumes products of Cadbury on daily basis.
Positioning strategy: to position the packaging of product, managers will use mediums of
social media marketing and newspaper publishing (Spender, 2014).
Implementation: It refers to putting all the plans in execution. Herein, all the above
plans or strategies are implemented to achieve results.
Control: It is said to differentiating achieved results with set plans as well as taking
deviational strategies to deal with gaps.
CONCLUSION
The above discussion summarises that business strategy is one of the competitive action
that results in attracting potential customers together with strengthening performances in limited
duration. SLEPT analysis addition to SWOT analysis were opted to determine impacts that
external and internal environment results in managers strategies. In addition, McKinseys 7s
model was used for determine capabilities of firm. The models assists managers to formulate
appropriate plans that strengthens business position. Porters five forces framework also benefits
in analyses competitive position in the excising industry. Business concerns also goes with
Ansoff's matrix so to search directions for achieving growth.
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Grover, V. and Kohli, R., 2013. Revealing your hand: caveats in implementing digital business
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Martinez-Simarro, D., Devece, C. and Llopis-Albert, C., 2015. How information systems
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Scholes, M. S., 2015. Taxes and business strategy. Prentice Hall.
Spender, J. C., 2014. Business strategy: Managing uncertainty, opportunity, and enterprise.
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