Macro Environmental Analysis for Strategic Management Decisions

UNIT 32 BUSINESS STARTEGY

Table of Contents
INTRODUCTION...........................................................................................................................................3
TASK 1..........................................................................................................................................................3
Macro environmental analysis to identify and inform strategic management decisions........................3
Internal environment that consider company internal abilities, culture and business practices.............7
Evaluation of competitive market by using Porter’s five forces model..................................................10
Models, theories and concepts to project strategic management plan.................................................11
CONCLUSION.............................................................................................................................................15
................................................................................................................................................................... 15
REFERENCES ..............................................................................................................................................16

INTRODUCTION
In order to sustain within market place and drive business towards progress every
company develop their business strategy by using varied methods or techniques. It is companies
working plan for achieving their vision, objectives, prioritizing aims and optimizing financial
performance with their business model. A good strategy of firms can be reduced to one three
generic plans, these strategies are cost focus, differentiation and leadership.
The current study is based on TESCO, is international retailer from UK. Company started
their business in 1919 and founded by Jack Cohen who opened primary TESCO grocery outlet in
1931 near London.
This study will explain macro environmental to identify and inform strategic decision by
applying relevant framework to determine how external factors impact strategies employed by
firm. It will critically evaluate internal environment by using appropriate models or frameworks
such as SWOT. Furthermore, this study will justify appropriate strategies used to improve
competitive benefits and market positions based on evaluation of competitive market by using
porter five force concept.
At last of this assignment range of models and concepts will used to produce strategic
management plan in context of TESCO that help to achieve their set aims or objectives.
TASK 1
Macro environmental analysis to identify and inform strategic management decisions
PESTEL Analysis
Political factor-
Since retailing organization operates all around the world, international political factors
usually influence performance of retailers. Fiscal policy, taxation rates, political stability or
instability and trading rules are included in list of this factor that affect decision-making process
and strategy of TESCO. Its management creates new strategies to promote growth &
sustainability. They decided to enter into new market place like South Africa where they can sell

their products which in return increase productivity and profit margin (Berlingieri, Breinlich and
Dhingra, 2018). Trade policy is a political factor that affects negatively on business strategy and
decision. Brexit's change the whole procedure and is main reason for which government increase
taxation charges that create barrier for company to fulfill their dreams. For example, increasing
taxation charges put negative impact on business expansion strategy of company as well as
business practices.
Economic factor-
Unemployment rate, changes in labor market, economic growth and other elements are
considered as economic factors that directly affect growth and success of business within
specific market. One of the most effecting factors on economy is high unemployment level that
impact TESCO business expansion strategy into South Africa negatively (Mahadea and
Kaseeram, 2018). Unemployment rate in SA is one of the biggest in factors, it decreases demand
and supply of products which in return cater low profit margin to firm. For instance, when
company enter into new market, where people are unable to purchase good quality products in
affect sales of Tesco and overall success.
Social factor-
Consumer’s preferences are constantly changing over time regarding shopping and
purchasing (Ryke, 2019). People have quite tough life schedules and desire fast delivery with
flexile products return policy. It impact on TESCO services and supply procedure positively
when they cater online services to local people in nation where they want to enter which help in
their business growth and success. By offering quality products or fast delivery services to
consumers in South Africa company can build their strong brand image as compare to local
competitors. With this service organization can achieve their new strategy to promote progress in
effective manner. It impacts on expansion strategy positively as help to gain attention of these
people as mentioned above.