Analyzing the Impact of Macro Environment on Aston Martin's Strategies

This report analyzes the impact of the macro environment on Aston Martin's strategies and examines the internal environment and capabilities of the organization.

Business Strategy
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1: Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies..........................................................3
TASK 2............................................................................................................................................8
P2: Analyse the internal environment and capabilities of a given organisation using
appropriate frameworks..........................................................................................................8
TASK 3..........................................................................................................................................11
P3: Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation.....................................................................................................11
TASK 4..........................................................................................................................................12
P4 Application of different models, theories and concepts to interpret strategic planning..12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
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INTRODUCTION
Business strategy is defined as competitive strategy which is utilised by the business so
as to compete with their competitors and to attract customer in positive manner by using
effective strategies. These strategies are helpful in strengthening and in implementing most
appropriate strategy so as to provide backbone to the business in most effective manner. These
strategies are assisting business in achieving their business objectives in considerable way. This
report is prepared so as to explain these concepts along with the background of Aston Martin
which is a sports car manufacture and headquartered in UK. This report includes internal and
external factors which are having prominent impact over the business. By adopting effective
strategies of business employee skills can be improvised that is helpful in enhancing overall
business capabilities. In order to earn more profits several approach are used so as to examine
business conditions in various direction such as porter five force model, SWOT, VRIO,
McKinsey’s and many more. These are the strategies which are providing high revenues to the
business and directly affecting profitability and productiveness (Razak and et. al., 2016).
TASK 1
P1: Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies.
Mission: The mission of Aston Martin is to render luxurious sports car to their customer
so as to provide them high end luxurious services and maintain their standard within
marketplace.
Vision: The major vision of Aston Martin is to provide luxurious services to their
customer so as to provide them experience of luxury and accomplish their task in appropriate
manner.
Objective: The Company is having major objective of enhancing their customer base by
providing them quality services and product offering.
Strategy is defined as the action plan which is adopted by business so as to provide light
over the path of overall goal accomplishment. Strategy is helpful in achieving business
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objectives in more appropriate manner as path is being provided with the help of strategy and
their implementation could lead them to achieve business objective in prompt manner.
There are various techniques of strategic planning which can be adopted by the business
such as balanced scorecard, SWOT analysis, PESTLE analysis, VRIO analysis and many more.
These techniques are used so as to recognise business position in prominent manner and with
the help of these techniques Aston Martin can plan their business plan in such a manner that
growth can be received by them.
Macro environment
This is referred as surroundings of outer environment which is having impact on the
business so as to provide growth opportunities (Feimi, Kume and Pulaj, 2016). These factors
include PESTLE analysis and many more aspects. In the context of Aston Martin manager of
the company is performing PESTLE analysis and stakeholders’ analysis so as to examine
opportunities and threats which are pertained to the business. This helps business in rendering
high end opportunities for performing growth opportunities which is providing them distinct
market edge and position as well. These are helpful in analysing market demand and to cop up
with external market situation.
PESTLE ANALYSIS
 Political factor: These factors are associated with governmental regulations, fiscal
policies, trade tariffs, tax policies and many more. Due to Brexit implications
uncertainties has occurred in business and companies working in UK, as European
countries has been discharged form EU union and this is giving negative impact on
market existence of the company.
 Economical factor: These factors are associated with income stability and purchasing
power. Due to Brexit implications purchasing power and currency is fluctuating on
regular basis and this is affecting production cost of Aston Martin in negative manner.
On the other hand this is providing huge employment as this is a factor which is
included in economic factor as well.
 Social factor: These factors are associated with taste and preferences of customer and
their needs or demands. In the context of Aston Martin these factors are providing high
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opportunities to excel their business as people are inclined towards using sports cars
along with luxury. This is providing high end resources to Aston Martin as in satisfying
customer needs by their product offerings.
 Technology factor: These factors are associated with using emerging technology in
business and attracting customer there on. Within this context Aston Martin has
emerged with latest technology by which the company is having prominent market
image and place in order to meet customer requirement in specified manner. They have
introduced self-driven cars which are providing them additional coverage over market
and their industry and overall profitability of them (Perera, R., 2017).
 Legal factor: These factors ate associated with legislative regulations and laws. Further
this includes employment laws and various laws which are required to be enforced by
business entity in their operation. Within this context Aston Martin is enforcing
employment laws and various laws so as to safeguard rights of employee and their
business operations. These are going to help them in getting high end profitability and
productiveness.
 Environmental factor: These factors are associated with inclination of business
operation towards preventing nature from any hazardous impact. In the context of Aston
Martin they are using waste management techniques and introduced green cars which
are providing them huge sales and profit as well.
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Stakeholder’s Matrix
LEVEL OF INTEREST
LEVEL OF POWER HIGH LOW
High Shareholders Government
Low Consumers Suppliers
In the context of the Aston Martin prominent stakeholders are stated above and their analyses
are elucidated below.
 Shareholders: These are known to be prominent stakeholders as these are the people
who are investing their money so as to earn high return from business.
 Government: In the context of Aston Martin government is having low interest level as
they have made strict rules on income control and foreign transitions.
 Suppliers: These people play significant role in working of business operations as in
context of Aston Martin these are the person which are supplying raw material to the
company and they hold high power in the business as these are providing direct impact
on sales and profitability.
 Customers: Customers are driver of any business as in context of Aston Martin these
are the person who are highly responsible for growth of the business so they hold high
power in business. (Aragonés-Beltrán, García-Melón and Montesinos-Valera, 2017)
Ansoff's growth vector matrix
Ansoff growth matrix is defined as the matrix under which strategies are formulated and
adopted by business manager in order to enhance growth opportunities and success ratio. In the
context of Aston Martin this matrix has been elaborated as under:
Product development: Within this strategy a new product is being introduced in the existing
market so as to attract new customers. For instance Aston Martin is introducing new product in
the existing marketplace in order to attract huge customers for their cars.
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Market development: Within this growth strategy a new market is required to be explored by
the company from their existing product offerings. This strategy is advantageous for Aston
Martin in expanding their market size along with increasing their sales and profitability.
Market penetration: Within this strategy companies tend to lower prices of their product or
services in order to capture new market edge and customer as well. In the context of Aston
Martin the company can use this growth strategy to cater large customer by reducing prices of
their products. By which goodwill can be improvised in the marketplace.
Diversification: This strategy is used by businesses in order to tap into new market segment
and cater new range of customer from their new product in existing market. In the context of
Aston Martin this strategy can be used by them in order to unleash new market segment and
enhance their goodwill (Loredana, 2016).
In the context of Aston Martin it can be concluded that the best suitable strategy for the
company as this may provide them additional coverage over huge customer and markets as
well. By adopting this strategy the company can be benefited in their sustainability and
profitability.
SWOT analysis
Internal factors are defined as those factors which are existed in the business and
provide assistance to business in dealing with their growth and opportunities as well. In the
context of Aston Martin SWOT analysis has been enumerated as under:
Strength Weaknesses
 High brand equity and capability of
rendering innovative services as well.
 Use of latest trending promotional
tools which enable them to earn more
profits.
 Limited product portfolio which is
giving difficulties to compete with
rivals.
 Due to dependence of fewer suppliers,
they are having high power.
Opportunities Threats
 By innovative design and features new  Increasing cost of fuel is creating high
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customer can be attracted.
 Expansion within automobile sector
may provide them opportunity to
expand their business.
difficulty level for the company.
 Huge number of competitors.
From the above analysis of macro environment Aston martin is utilising PESTLE
analysis in order to understand and recognise threats which can be undertaken by them in their
business. By using stakeholder matrix benefits obtained by stakeholders can be enumerated and
by this opportunities and other factors can be calculated. With the help of these models sales
and profit can be improvised due to which goals of the business can be achieved within time.
TASK 2
P2: Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.
Strategic capabilities and their key components
Strategic capabilities are a parameter to evaluate and measure strategic abilities of the
organization. It has formed to achieve some pre-determined goals, objectives, visions and
missions and to compete with competitors and taking edge over them (Fernandes and et. al.,
2017). It majorly constitutes of six key components and those are Strategic objectives, goals,
action plans, analytical and evaluation tools, values and visions. All those components play a
vital role in improving strategic capabilities.
Resource based view strategy
Resource based strategies are those which are defined and established by business
organization on the basis of the various resources valuable to the organization and that could
lead to a gain in their business activities. Resources are key basis for forming the business
strategy to achieve the organizational goals. This includes both Tangible as well as Intangible
resources. Tangible resources includes Cars, machines, hardware’s, buildings, furniture etc.
whereas Intangible resources includes goodwill, brand value, patents, designs, Intellectual
properties, market shares etc.
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McKinsey's 7S model
McKinsey’s 7S model is an analytical tool and theory that can be used by any business
organization to recognize and come up with the optimized and best strategy in align with their
business activities to attain all the desired business goals in an effective manner. There are
seven components under this. Likewise, every other organization Aston Martin too is required
to have its own unique business strategy and this tool can help them to achieve so as explained
under –
 Strategy: Strategy denotes plan that has approved and established by the organization to
achieve there desired organization goals. This is something providing direction to the
business to achieve their objective and compete in market. As Aston martin is known
for its luxurious cars manufactured, they have opted for high-ranged price strategy and
that has played a significant role for them in being a market leader in this segment.
 Structure: Structure is the defined unit hierarchy of the business and arrangement of
co-relation between different units and roles of the organization. Aston Martin too has
defined hierarchy structure, which has CEO being the top most person in top-level
management and below that all the relevant roles and responsibilities are dedicated to
various positions and roles.
 Systems: - It is the process and system of carrying on all the business processes and
activities in the organization. Aston Martin has a formal and organized internal system
and controls to make sure that the activities are carried on in the most effective and
integrity manner. (Zincir and Tunç, 2017)
 Skills: This can be arguably one of the most valuable unrecorded asset for any
organization. It consists of various skills of whole workforce of the organization. Aston
Martin has have highly skilled designers, engineers and employees who make their
vision a success through their knowledge and hard work.
 Style: Style is something, which is unique for every organization. It is the way of
operating, handling and managing the situation, customers, and employees. Aston
Martin being a successful business they are into leadership style of operations enjoying
perquisites of being a leader in their segment of business.
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 Staff: This component consist of staff of Aston Martin and quality or their skills and
knowledge with respect to activities they are responsible to.
 Shared Values: This aspect is more of a principles, ethics and standards, and character
of organization. Aston Martin is having a separately defined policies and guidelines
defining their values, ethics and standards.
VRIO Framework:
VRIO framework is consisting of four components and those are Value, Rareness,
Imitability and Organization. This has utilized to capture the internal capabilities of
Organization and available resources. With context of Aston Martin VRIO framework has
explained here under –
Value: As the term suggests Values are those, which are valuable to business. It is very
vital for Aston Martin to identify their most valuable resources and use them in optimized
manner. They have managed effectively in a manner that resources are used to its maximized
level and minimizing cost of wastages. Aston Martin have greatly structured and valued design
team and engineering team who is making their product innovation and improvised.
Rareness: It consists of resources, which are not available as a when required instead
they are available rarely and have immense importance to organization. Aston Martin has a rare
technology with them providing competitive age to them over its competitors. (Buzatu, Pleșea
and Iulian, 2019)
Imitable: Imitable resources are that which differentiates company from its
competitors. Luxurious product offerings by Aston Martin are something, which get them in
spotlight and have high market prestige and Value.
Organization: This is the overall organization structure and hierarchy framed for
business process and its available resources. Aston Martin has a well-designed organizational
structure, which ensures that all the resources has utilized in effective and efficient manner and
all business processes are carried on adhering to organizational policies.
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Benchmarking strategic capabilities and value chain analysis
It is a tool to analyse and evaluate all the internal firm activities of any organization and
value addition with that activity. Porter’s Value chain model tool can be referred and used by
Aston martin for this analysis, which includes Inbound and Outbound Logistics, Operations,
Marketing & Service.
Cost-benefit analysis
It is a technique used to evaluate and analyse the decision-makings and in comparing the
cost of various projects with benefits that are taken out of it. It is evaluated by summing up the
benefits and subtracting all the related costs from that. Aston Martin has its own defined
process and technique to make this analysis.
As the business is having various capabilities such as their supply chain management is
effective and known to be their most valuable resource. Similarly their structure is highly
beneficial in its build by which any complex situation can be dealt by them in most effective
way. By reviewing external capabilities Aston Martin is able to recognise their opportunities
which can be undertaken by them in the process of market expansion.
TASK 3
P3: Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation.
Porter’s five force model is strategic tools which are used by the businesses in order to
understand impact of factors inside the industry. In the context of Aston Martin this analysis is
performed as under:
Competitive rivalry: This aspect involves internal factors within the industry due to
which separate identity can be created by the business. In the background of Aston Martin they
are having diversified control over marketplace which makes them market leader. On the
contrary they have very limited number of target customer due to their premium offering so by
this they face less competition within their industry this makes them highly recognisable within
marketplace.
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Threat of new entrants: This force elaborated existence of barriers within industry on
entering of a new rival. This is the major threat which can be identified by the company and in
context of Aston Martin this threat is having low existence as one needs high investment when
entering into automobile industry. The company is coming up with latest inventions by which
they rare becoming market leader so it is very difficult for new entity to establish their business
in prominent manner. (Moreno-Izquierdo, Ramón-Rodríguez and Perles-Ribes, 2016)
Threat of substitute: This threat entails about presence of rivals in the market and their
intensity to capture share in overall market. In the context of Aston Martin they have huge
number of competitors such as Bentley, Rolls Royce and these are having ample market
capture. This factor is having high threat for Aston Martin as in automobile industry customer
are inclined towards technology rather than brand so this is providing threat to the company to
sustain in the market.
Bargaining power of suppliers: This force means power hold by suppliers within
prevailing industry. Suppliers are blood of the business and raw material are supplied by them
only so in context of Aston Martin they are having limited number of suppliers so this force is
having high implications on the business. Furthermore due to low switching cost they can
switch their supplier if they are required to deal with this threat by which additional benefits can
be attained by the business.
Bargaining power of customer: This is the force under which identification of power
hold by customer is performed and sensitivity is calculated for any fluctuation in prices. In
automobile industry customer are defined as price maker and decision maker so this threat is
having high impact on Aston Martin. Their manufactured cars are high in technology and can
have success only if accepted by customer over any other brand, due to existence of high rivals
this force is showing its high power and choice making decision is only provided to customer.
From the above discussion this can be deduced that Aston martin is capturing high share
within marketplace by their business offerings and customer services. In order to minimise their
threat within market the company is required to introduce high innovations in their cars so as to
attract more customer and sustain in the marketplace. By this company will be able to maintain
its distinct identity and huge customer base can be inculcated by them. By focusing on their
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innovation and using emerging technology in their products Aston martin can attain competitive
edge within marketplace.
TASK 4
P4 Application of different models, theories and concepts to interpret strategic planning
Porter's generic strategies
This strategy is having high significance in understanding path to create high
competitive edge within marketplace. Porter generic strategy is having three major parts which
are elaborated as under:
Cost leadership: Cost leadership strategy is helpful for those customers who get
affected firm fewer changes in prices. In the context of Aston Martin they are introducing new
services and products which is attracting more customers and increasing their overall sales and
profitability. The major purpose of this strategy is to attract those customers who are prone to
compare prices of similar products and then they take their buying decision. (Omsa, Abdullah
and Jamali, 2017)
Differentiation: Within this strategy new emerging and innovative feature are
introduced by the business in their product or services so as to renown as differentiated
company. Within this strategy Aston Martin is offering nee techniques in their cars such as
green cars by which they have differentiated their brand compared to other within marketplace.
Focus: Within this approach two major aspects are inculcated such as cost focus and
focused differentiation. In the context of Aston Martin they are focusing on a market segment in
which they are planning to introduce innovative features so as to attract and become market
leader in that segment.
Bowman's strategic clock
This model is supportive in determining most suitable strategy for the business so that to
provide position to their product or service within marketplace. Within this purpose strategies
used by Aston Martin are explained as under:
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Low price and low value added: As the company is focused on providing low cost
products to their customers so as to differentiate their product on cost aspect within
marketplace.
Low price: Within this Aston Martin is providing various products at lower prices so
as to use cost minimisation technique in their business in order to become market leader.
Hybrid: This includes both differentiation and low price so as to adopt most suitable
strategy to be use by Aston Martin.
Differentiation: Within this strategy new innovation are introduced by Aston Martin
so as to make their brand differentiated form others.
Focused differentiation: Within this strategy prices of the product so as to maintain
their business at global level. (Abdolshah, Moghimi and Khatibi, 2018)
Risky high margins: Within this strategy losses are beard the company and due to
which risk is borne by them to manage their profit in effective manner.
Monopoly pricing: In this prices are controlled by a single entity within marketplace
and this is creating high opportunities for Aston Martin to survive for longer time period.
Loss of market shares: This is the condition in which due to high competition
markets are sacrificed by the business which adversely impacts their market image.
Thus Aston martin is using emerging technology in their product and they are using
these innovations as per the market need and demand. By rendering high class services and
product to their clients they are able to attain high market share and sustainability within
marketplace.
Strategic Management Plan
Strategic Planning: Strategic plan is defined as those tactics which are helpful in
providing assistance in decision making process by which procured resources can be utilised in
fullest manner. By this predefined objectives can be accomplished on timely manner.
Company overview:
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Aston Martin is a British company of luxury sports cars which is headquartered in UK.
The company is having their business in more than 50 countries which proves their global
existence.
Mission: The major mission of Aston Martin is to provide luxurious services to their
customer so as to provide them experience of luxury and accomplish their task in appropriate
manner.
Vision: The major vision of Aston Martin is to provide luxurious services to their
customer so as to provide them experience of luxury and accomplish their task in appropriate
manner.
SMART Objectives
 To enhance sales volume by 18%
 To enhance profits by 20%
 To widen customer base by 20% within a time frame of 9 months.
Tactics: Marketing mix
Product: The major product is offered by the company is their luxurious sports cars
which are laced within latest technology so as to provide high end benefits to their client in
respect of technology and innovation.
Price: Aston Martin is using competitive strategy so as to compete with their rivals in
appropriate manner. They keep their pricing high so as to attract premium customer.
Place: Aston Martin is having their business in more than 50 countries which proves
their global identity.
Promotion: The Company is using social media marketing as their promotional tool so
as to attract all class and age of customer and to enhance their market capture.
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Evaluation and control
After implementing the entire strategies in appropriate manner now Aston Martin is
taking steps to evaluate those strategies. For this purpose benchmarking and KPI is used by
them in order to monitor. For measuring financial performance cost benefit analysis is
performed by them.
CONCLUSION
From the above mentioned report it can be deduced that in order to analyse business
conditions several factors are required to be undertaken. This is having high implications on
attainment of business objectives in effective manner. With the help of PESTLE, SWOT, VRIO
frameworks internal and external capabilities are examined so as to provide business benefits
thereon. With the help of Poter’s five force model market analysis can be performed due to
which sufficient plan of action can be formed (Holotiuk and Beimborn, 2017).
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