Impact and Influence of Macro Environment on Eurostar and its strategies

This report discusses the impact and influence of the macro environment on Eurostar and its strategies, analyzes the internal environment and capabilities of the organization, explores the competitive forces, and provides strategic planning for Eurostar.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
P1 Impact and Influence of Macro Environment on Eurostar and its strategies.........................3
LO2..................................................................................................................................................5
P2 Analyse Internal Environment and Capabilities of the organisation......................................5
LO3..................................................................................................................................................9
P3 Competitive Forces of Eurostar..............................................................................................9
LO4................................................................................................................................................10
P4 Strategic planning for the Eurostar.......................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy can be defined as plan of action which us developed and implemented
so that business can achieve its objectives in most effective and efficient manner. Strategies are
very important for businesses as they link all the activities of individual, group and organisation
to objectives of the business. This report will discuss about strategic management plan and
various aspects of the plan, including analysis of the environment in which business is operating.
The business contextualised in this is Eurostar, it is an international high speed railway company
service, connecting in London and its services of railway connect it with Amsterdam, Brussels,
and many other destinations.
LO1
P1 Impact and Influence of Macro Environment on Eurostar and its strategies
Macro environment of the organisation plays important role in success and strategies of
the organisation. Eurostar also get affected by its micro environment. This means that strategies
for organisation are based on how they will be able to utilize the opportunities that exist in macro
environment and along with this, creating strategies to reduce the impact of threats existing in
macro environment. Impact and influence of the macro environment on Eurostar can analysed
using PESTLE framework. The framework and its application is as follows-
Political
Political influences affecting Eurostar are government and its uncertainties. This is because
Eurostar is a international train service and in two countries are connected. Relationship between
these two countries and government of the two countries also make impact on the strategies of
the Eurostar (Perera, 2017). Brexit is another factor influencing Eurostar because this is a UK
organisation whereas France is a member country of EU.
Economical
This is another environmental factors influencing Eurostar this includes interest rates and
increasing interest rates are a major influence on the strategies as this requires strategies that can

deal with increasing cost of travel and operations. Inflation is another influence on the strategies
and is a part of economic environment of the country.
Social
This is another factor affecting strategies of Eurostar. This includes increasing in population
which increases potential customers for Eurostar. But social factors also include changing
consumer behaviour and trends. Changes in consumer behaviour influence that more consumers
and passengers are preferring air travel over travelling by train. This create a thread for Eurostar
and requires it to make strategies to influence customers.
Technology
This includes factors such as improvement in technology leading to to enhanced experience of
train travel. Technology is Impact in all areas of operation of Eurostar and acquired Eurostar to
effectively use Technology for improving functions of business as well as improve net
connectivity to its customers by means of Technology (Rastogi and Trivedi, 2016). This means
that Eurostar can now communicate to its customers through various technological mediums and
along with this it also requires to provide services like online reservation of travel.
Legal
Legal factors affecting Eurostar are travel restrictions because of European Union. Other than
this there are several legal factors influence strategies of Eurostar among all these employment
laws are important influencers. Employment includes several standards and regulations that are
imposter an organisation in order to ensure welfare and safety of employees. this also include
that employees of Eurostar aware about there rights. Regarding travel organisations consumer
laws are also important which requires insurance safety of consumers while travelling and many
other standard regarding this.
Environmental
Which sector has also become very important to be considered and impacting strategies of euro
star because this includes pressure from government as well as organisations to reduce waste full
stop reduction in carbon emission is also become important for Eurostar. Along with this

increasing consciousness of consumers regarding environment is also affecting and influencing
Eurostar and its strategies.
LO2
P2 Analyse Internal Environment and Capabilities of the organisation
This is very important as internal capabilities and environment of the organisation plays
important role in enabling organisation to take advantage of opportunities available for them
(Sarsby, 2016). Internal environment of the organisation can be analysed by SWOT analysis and
TOWS matrix. In order to analyse internal capabilities VRIO model can be implemented. SWOT
analysis of Eurostar is as follows-
Strength
 Frequent services (this means that services and travels of the trains are available frequent)
 Financial stability (this means that Eurostar has financial stability enabling company to
keep stable fairs)
 Hassle free travel (train journey are comparatively less difficult and hassle free)
 Comfort of train travel (significant important of travelling through train which is one of
the strength of Eurostar)
Weakness
 Limited location (locations that are served by Eurostar are very limited this reduces
number of potential customers)( Kulshrestha and Puri, 2017)
 High cost (cost of Eurostar is very high that affect and impact profitability of Eurostar)
 London-centric (this is London centric this means that all trains and train journey are
based on London only)
Opportunities

 Extend number of destinations (by increasing number of destinations Eurostar can
increase its profitability and scope)
 Enhancing technology and improved services (by improving technology of the vehicles
and trains it can improve services provided to customers)
Threats
 Fluctuations in currency (Vlados, 2019)
 Changing consumer orientation (customers are willing to change their travel orientation
and more customers are preferring air travel specially in international journey)
 Cheaper trains (this means that cheaper trains in competition can create threat and
challenge for Eurostar)
TOWS Matrix
Eurostar
Strength
 Brand Loyalty
 Financial stability
 Frequent services
Weakness
 Limited locations
Opportunities
 Extended number of
destinations
 Enhancing technology
Strength and Opportunities
 Enhancing technology
to improve services
and increasing
customer loyalty
Weakness and Opportunities
 Limited locations can
be removed by
extending number of
destinations
Threats
 Currency fluctuation
 Changing consumer
orientation
Threats and Strength
 Brand loyalty can be
used to avoid impact of
threat of changing
consumer orientation
 Currency fluctuations
can be dealt with
financial stability of
Weakness and Threats
 Limited locations and
changing consumer
orientation can create
more impact

the Eurostar.
Internal environment can be analysed by these models and theories in order to analyse what are
the strength and limitation of the Eurostar (Min and et.al., 2016). In order to identify and
understand internal capabilities of the Eurostar, VRIN model can be applied.
VRIN refers to valuable, rare, inimitable and non-substitutable.
Resources Value Rare Inimitable Non-substitutable
Human resources Yes No No No
Financial resource Yes No Yes No
Brand image Yes Yes Yes Yes
Brand Recognition Yes Yes Yes Yes
Technology Yes Yes No No
Quality of
operations
Yes Yes Yes No
Internal environment can also be analysed through McKinsey’s 7S Model. 7s of Eurostar are
structure, strategy, system, style, staff, skilled and shared values.
In context of Eurostar 7S model can be applied as follows-
Figure 1 7’S Model of Eurostar
Some of the factors and elements can be explained as follows-

Structure/strategy- Eurostar includes a structure where staff has their autonomy and they can
make decisions in order to improve customer experience.
Strategy/Skills- This is also working in Eurostar because strategies link knowledge and skills
with objectives of the Eurostar.
Staff/Structure- This are also working together well in Eurostar because this is the structure of
the organisation in which staff is integral part of structure and staff are positive and also have
autonomy.
Shared Values/System- This is important part of the system and they are working together well
in Eurostar.
Stakeholder Analysis of Eurostar
Stakeholders are those parties who are related to Eurostar and can affect its operations
and as well as can be affected by Eurostar. Its main stakeholders are its employees, customers,
government, organisations, financial institutions and investors and community (Eskerod and
Larsen, 2018). Their impact on the operations of the organisation differs on the basis of their
power and interest in the organisation. to analyse their power and interest Eurostar can utilise
Stakeholders Matrix this will allow to help in informing how the stakeholders needs to be treated
according to their power and interest. This is as follows-
Figure 2 Stakeholders Matrix

LO3
P3 Competitive Forces of Eurostar
Competition is one of the most important factor affecting strategies of the organisation.
Competitive forces of Eurostar can be analysed through Porter’s five forces these are-
Threat of new entry
This is one of the important competitive forces and Eurostar has strong position due to its
existing strong position and this is also not easy to enter in the industry where Eurostar is
operating.
Threat of substitute
This is another threat and in this situation of Eurostar is at moderate level because its
substitute is air travel and road travel (Khurram, Hassan and Khurram, 2020). Consumers are
changing their attitude and in international travel air travel is preferred by consumers.
Power of Customers
Customers have become centre of organisational decision making and this is the reason
that their power is strong. Eurostar have position at weak in this and this requires that adequate
service is provided to consumers in order to gain customer satisfaction and customer loyalty.
Power of Suppliers
This is another force of competition and in this position of Eurostar is at strong level
because there are several suppliers who can provide the resources that are required to Eurostar.
Industry Rivalry
There are limited organisations in the industry and this is the reason that Eurostar is at
strong position in this force. But this is also a challenge that competitors can provide effective
services and at low price.

LO4
P4 Strategic planning for the Eurostar
The organisation operating train travels in international context that connect UK and
France. The company is presently operating at limited locations (Cleberg, 2019). Above analysis
of Eurostar reflects several threats and opportunities are there to be utilised and to be aware of in
order to reduce their impact. On the basis of analysis this is a strategic planning for the Eurostar.
Objectives
 Increase travel destinations in international destinations
 Increase customers by 20%
 Reduce cost of operations by 15%
In order to achieve these objectives strategic directions that are available for Eurostar can be
analysed on the basis of Ansoff Matrix.
Market Penetration
This is a strategy in which strategy is adopted and applied in existing market and through
existing product. This strategy requires effective promotion and marketing so that Eurostar can
attract more customers and consumers from existing market.
Product Development
This is another strategy that firm can apply in this strategy company requires to develop
new product and through which existing market is catered. This requires developing new product
and services by Eurostar.
Market Development
Market development is a strategy in which existing products is used to attract new market
and customers through the market (Cleberg, 2019). This means that company attracts customers
from new market are attracted and product offered in the new market is existing product.
Diversification

This is another strategy in which Eurostar requires developing new product and new
market. This means that completely new product is offered in a new market.
Other than this Porter’s Generic Strategies also offer strategic directions for the company. The
strategies are-
Cost Leadership
This strategy includes that cost of the product of company is lowest in the industry. this
gives advantage in high profit margin.
Differentiation
This means providing unique products and services to the consumers which are
completely different from competitors of the product (Omsa, Abdullah and Jamali, 2017).
Cost Focus
This is one of the strategy in which cost strategy is implemented to selected group of the
consumers which is known as cost focus.
Differentiation Focus
This is another strategy in which differentiation strategy is applied and implemented to a
group of consumers.
CONCLUSION
On the basis of this it can be concluded that there are several opportunities available to
Eurostar and from the following strategies that Eurostar can implement in group are market
penetration in which company increases customers from existing market and along with that
market development in which Eurostar create new market and destination so that customers can
be attracted from different markets. In strategic directions available from Porter’s Generic
Strategies company can adopt both these strategies. Cost strategy will help in achieving
objectives of reducing cost of the company and differentiation strategy will contribute in
increasing customers.

REFERENCES
Books and Journals
Cleberg, C., 2019. Strategic Success: The Ansoff Matrix vs. The Balanced Scorecard.
Eskerod, P. and Larsen, T., 2018. Advancing project stakeholder analysis by the concept
‘shadows of the context’. International Journal of Project Management. 36(1). pp.161-
169.
Khurram, A., Hassan, S. and Khurram, S., 2020. Revisiting Porter Five Forces Model: Influence
of Non-Governmental Organizations on Competitive Rivalry in Various Economic
Sectors.
Kulshrestha, S. and Puri, P., 2017. Tows Analysis for Strategic Choice of Business Opportunity
and Sustainable Growth of Small Businesses. Pacific Business Review
International,. 10(5). pp.144-152.
Min, B.S and et.al., 2016. VRIO Model Based Enterprise Capability Assessment Framework for
Plant Project. Korean Journal of Construction Engineering and Management. 17(3).
pp.61-70.
Omsa, S., Abdullah, I.H. and Jamali, H., 2017. Five competitive forces model and the
implementation of Porter’s generic strategies to gain firm performances.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external
risks in construction projects. International Research Journal of Engineering and
Technology (IRJET). 3(1). pp.384-388.
Sarsby, A., 2016. SWOT analysis. Lulu. com.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.