Impact of Macro Environment on Organization

This report discusses the impact of macro environment on organizations, with a focus on UBER. It explores the use of frameworks such as PESTLE analysis and Ansoff's growth vector matrix to formulate effective strategies. The internal environment and capabilities of UBER are analyzed using the McKinsey 7s framework and VRIO analysis. The report also examines the competitive forces using Porter's five forces model.

UNIT 32

Table of Contents
INTRODUCTION.......................................................................................................................................4
P1) Discuss impact of macro environment over organization with the help of appropriate framework.4
M1) Analyze macro environment in order to determine and inform decision........................................7
TASK 2.......................................................................................................................................................7
P2. Analyse the internal environment and capabilities of UBER..............................................................7
M2) Evaluate internal environment to determine strengths, weakness of internal capabilities,
structure of an organization..................................................................................................................10
TASK 3.....................................................................................................................................................10
P3) Porters five forces model................................................................................................................10
M3) Develop appropriate strategies for improving competitive edge and market position on the basis
of outcomes...........................................................................................................................................12
TASK 4.....................................................................................................................................................12
P4) Develop strategic planning through different theories...................................................................12
M4) Devise a strategic plan having strategic priorities and objectives..................................................14
CONCLUSION.........................................................................................................................................15
REFRENCES............................................................................................................................................16

INTRODUCTION
Business strategies are a crucial activity of business in which several strategies are
prepared in order to attain predefined objectives. These strategies are essential and prepare in
order to provide higher competitive advantage to company (Trevisan, 2016). In addition,
strategies are also helpful in performing several activities and operations of organization so that
predefined objectives can be achieved. Here, strategies are the combination of ample of tactics
which are prepare to meet with future uncertainties. In the current report, UBER has been taken
into consideration that is well known company of service industry. It is headquartered in United
States and was founded in 2009. It provides ample of services such as food delivery, ride hailing
and freight transportation. The current report, provides an overview regarding different strategies
that are being used by company. It comprise different models such as PESTLE, Porter’s five
forces and more in order to undertake external analysis of organization. Further, internal analysis
with the help of relevant models such as Mickensy 7 s, SWOT analysis has been also discussed
in the following report. Lastly, it includes appropriate models, theories to formulate strategic
plan to attain growth and success in stipulated period of time.
P1) Discuss impact of macro environment over organization with the help of appropriate
framework
It is analyzed that macro environment put a great impact on business and its performance.
There are ample of factors are included in macro environment that are related to outside
environment and significantly influence productivity and profitability of company (Wahyuni,
Fahada. and Atmaja, 2019). However, external environment is crucial but cannot be controlled
by managers. So, they are required to prepare effective strategies in order to sustain in market for
longer duration. For this purpose, there are different models are used such as PESTLE, Ansoff
Matrix. These models are discussed as under:
PESTLE Analysis
It is a model which includes ample of factors related to outside environment of business.
Here, through study of this model helps managers to prepare effective strategies so that they can
meet with uncertainties in an effective manner. In addition, PESTLE analysis includes several
factors that are given as under:

Political Factors: It is related to political condition, government policies of a country.
Here, change in current government policies brings changes in business. It is analyzed that
political environment of a lot of countries significantly affects policies of companies which are
operating within country. In context of UBER, it is working in different countries such as UK,
US, India and more. So, political environment of different countries also differ with each other.
In this, factors such as tariff, taxes, trade policies of different nations highly affect current
performance of organization. Thus, managers are required to prepare appropriate strategies in
order to deal with changing environment in an efficient manner. It will help company to sustain
at global market place.
Economical Factors: In this, elements such as employment rate, interest rate, income,
demand, supply and more are considered. It is monitored that economical conditions of countries
are different. Some countries are highly developed such as US and there are some countries that
are still on the path of development such as India and more (Chuang, 2019). For this, UBER
adopts flexible pricing model to meet with requirements of global audience. Apart for this, it has
been created ample of job opportunities for people. Now, they can work as driver without having
own vehicle. It also provides services at lower price so people are more likely to avail their
services.
Social Factors: These factors such as buying behavior, life style, personality, attitude of
people and more also affect business of a company. Customers are the most important part of
business as they drive revenue for organization by purchasing its products and services. In
regards of UBER, their business model is based on current needs and requirements of buyers.
They are providing higher feasibility to audience in terms of picking point, time, dropping time
and more. Here, people can also track their routes while riding. Besides this, charges of
company are also comparatively lower so customers are highly inclined towards UBER.
However, managers need to analyze current market trend and change in customers behavior in
order to ensure long term sustainability.
Technological Factor: As per the current business environment, it is crucial for each and
every company to adopt new and efficient technologies so that they can face competition in an
efficient manner. In addition, innovations are also helpful to grab the attention of customers. It is
monitored that UBER is based on an innovative concept of ride sharing business. It is a great

platform to take riders and drivers both at same place that is only possible with higher use of
technology. Here, both the parties also have opportunities to give rating and necessary
suggestions to improve overall experience of ride. So, it is a great platform with higher use of
latest technology.
Legal Factors: It includes ample of rules, regulations, policies that have been made by
higher authorities and need to abide by business owners to operate business effectively. It is
monitored that UBER is operating in different countries so that they need to abide different rules
and regulations formulated by government of respective countries ( Parry and Lind, 2016). Here,
company has been faced several legal constraints and problems due to low wages to employees.
So, it is essential for managers to abide different rules as well as regulations in order to meet
with predefined objectives.
Environmental Factor: Now, it is important for business managers to consider impact of
their activities over environment. For this, they are required to formulate necessary strategies in
order to enhance overall well being of society. It is monitored that UBER is involved in ample of
activities such as electric cars for riding. In addition, to minimize fuel emission they also provide
car pull facility. With this way, organization is able to maintain higher brand image among
customers.
Ansoff’s growth Vector Matrix:
It is a model that is used to take effective decisions related to market expansion and
growth. This matrix is also considered crucial as an external tool that is used widely in order to
explore the business opportunities present at market place. Different elements of Ansoff matrix
are given as under:
Market Penetration: Under this, existing product is provided within current market
place. Here, marketers need to use some effective strategies in order to sustain in existing
market. In regards of UBER, they can use this strategy as they already have loyal customer base
so it will be easy for company to sustain in market.
Product development: In this, organization launches a new product in existing market
space. For this, they are required to undertake effective market research (Priem, Wenzel and

Koch, 2018). It is monitored that UBER is providing new range of services such as food delivery
and more. It will help to improve current sales and profit margin of organization.
Market Development: Here, company enters into a new market with existing products. It
is quiet difficult to survive in new market among new customers. For this, managers are also
required to undertake detailed market analysis. Managers of UBER can enhance their current
market by targeting new segment of customers.
Diversification: This is a risky strategy where company enters into a new market with new
product. Here, a lot of investment is required to implement this strategy in an efficient manner.
So, managers of UBER need to be careful while diversify their existing business.
With above discussion, it is stated that product development will be more suitable strategy
for UBER as they have already a loyal customer base. So, it will be easy for company to survive
in current market place.
M1) Analyze macro environment in order to determine and inform decision
Macro environment is related to outside factors related to company which put impact
over its performance as well as productivity. There are elements such as Political, Economical,
Social and more are present within external environment that need to consider by managers
while taking business decisions in order to ensure long term sustainability. Here detailed analysis
of macro factors help managers to take effective business decisions for growth of company.
TASK 2
P2. Analyse the internal environment and capabilities of UBER
McKinsey 7s Framework
It is an effective tool and framework which is used to analyze the internal capability of an
establishment with the help of understating coordination and effectiveness of 7 key aspects in the
organization in order to attainment of organizational goals and aims (Moskovich, 2018). The
explanation of this model in context of UBER is as below:
Strategy- It refers to plans and policies which are developed by the company in order to
accomplishment of its aims and objectives. The management of UBER has designed plans such

as cost leadership strategy to hit the set targets of the enterprise. Reduction in the costs of
offering services to provide competitive costs to the customers to obtain leadership in the
business industry is the current plan that being considered by the management of particular
venture.
Structure- If refers the tools of communication and responsibility of relation within the
company that determines the flow of task. The management of UBER has carried out cross
functional divisional structure which allows the employees of different roles to involve and work
with different functional experts. It is a most important structure that enable in develop the work
quality of organization.
Systems- In UBER, the management of the firm considered comparative approach as a
performance management system to analyze the execution of employees which supports in
motivating manpower in order to perform the tasks with the effective level of productivity.
Shared value- It refers to values, mission, beliefs and vision of firm which a firm has and
analyses the behavior of workers. The management of UBER with lead inputs from them and
have a shared values to protected and safeguard the interest of its stakeholders.
Style- The management of UBER considers a democratic style of leadership and
management which allows and encourages to active involvement in the decision making process
of the firm as well as make highly motivated workforce.
Staff- In UBER, the management of the firm has adopted an performance supported
remuneration approach for managing and developing the human resource of the venture (Khan,
Daddi and Iraldo, 2020). Employees in the company are rewarded as per their performance level
which motivate them to do well.
Skill- In UBER, the management of the company has organized diverse training and
development programs to make development in the abilities of employees. The organizational
framework of the enterprise also allows employees to develop their reliable skills and
competencies.
VRIO analysis

Resource Valuable Rare Inimitable Organisable Competitive
advantages
Brand value Yes No No No Toughness
Specialised
capability
Yes No No No Bare
correspondence
Financial
resource
Yes Yes Yes NO Feasible
tolerable
Human
resource
Yes Yes Yes Yes Situational
sameness
Valuable: UBER has strong presence and brand image in the marketplace so it is one of the
ability of this firm which supports them to achieve competitive scenario within so many times
(Sullivan, Thomas and Rosano, 2018). Thus, due to have effective brand image in the market,
they have several growth options to gain competitive benefits by meeting needs of customers as
well as using unique competencies.
Rare: It refers to some of the resources as well as capabilities that are rare for company thus
helps it to sustain in market for longer duration. It is monitored that financial capabilities and
human resources of UBER is are the two rare resources of organization.
Inimitable: In this, resources are included which cannot be imitate by rivals. It is essential to
have this kind of resources in order to achieve higher competitive edge. In regards of UBER,
their financial as well as human resources are inimitable. So, it provides higher edge to company
over its competitors.
Organisable: Here, resources need to organized in better manner to attain predefined goals.
It is monitored that all the resources of UBER such as brand image, financial as well as human
resources are organized that will lead company towards sustainability at market place.

With above discussion, it is analyzed that human resources of company are its core
resources that differentiate organization from competitors. This core competency also ensures
sustainability of company in market.
M2) Evaluate internal environment to determine strengths, weakness of internal capabilities,
structure of an organization
Internal environment is concern with capabilities, resources of company that are helpful
to attain predefined objectives. It includes strengths of organization that differentiate it from
other competitors by strengthen its position at market place. On another side, there are some
weak points which also need to consider while preparing strategies for business growth and
success. In context of UBER, it is a global brand having exponential positive image in market
that provides entity an upper hand over rivals. On another side, company has been surrounded
with several controversies, criticism which put negative impact over existing brand image of
firm.
TASK 3
P3) Porters five forces model
Balance score card: It is a framework that is used to improve business outcomes and
performance. It was developed in 1992 in order to evaluate performance of a company in more
effective manner (Bigelow and Barney, 2020). It involves measuring of four crucial aspects of
business such as learning and growth, business process, customers and finance. It helps to
identify performance of different areas by isolating them. Therefore, managers of UBER
undertake this framework in order to monitor as well as improve current business performance in
an efficient manner.
Porter’s Five forces Model
In this model, five forces are included in order to monitor current level of competition
prevailing within industry. This all elements are related to external environment and help to
prepare effective strategies in order to sustain at competitive market place for longer duration.
This framework is important and helps managers to prepare appropriate strategy in order to
sustain in market place. Forces of model are given as under:

Industry rivalries: It refers to the competition prevailing within industry. As per the current
environment, companies have to face higher competition. It affects their business and current
level of sales and profitability. In reference of UBER there is higher competition prevailing in
market. There are ample of other companies such as Curb, OLA and more. These are also based
on similar business model. So, managers need to prepare appropriate strategies in order to face
competition in an effective manner.
Threats of new entrants: It includes the probability of entrance of new firms in existing
market place. If, there is low barrier at market place then it will be easy for new firms to enter in
market (Moskovich, 2018). In regards of UBER, there is higher threat of new entrants as
business model of company is quiet easy that can be copied by other. In addition, there is lower
barrier for new firms. They can easily enter as well as sustain in market for longer duration.
However, UBER has created higher trust and faith among customers that will benefitted
company in longer run.
Bargaining power of supplier: Vendors are important stakeholders of company who
provide necessary resources to organization in order to meet with predefined objectives. So, it is
vital to maintain effective relationship with vendors in order to maintain consistency in business.
It includes power of suppliers to negotiate with company for their services. It is monitored that
bargaining power of suppliers for UBER is higher as its business model relies on availability of
driver. Here, organization does not have their own vehicle rather they depend on suppliers
(drivers.) It is monitored that company outsources vehicle and drivers from outside that is
enhancing their bargaining power. It provides an upper hand to them so that they can easily
negotiate with company.
Bargaining power of customers: Customers are crucial part of each and every entity as they
purchase products and services which is the crucial source of revenue for organization. So, it is
essential to prepare effective strategies in order to retain customers for longer run (Khan, Daddi
and Iraldo, 2020) . It is monitored that bargaining power of buyers of UBER is really high as
there are several other companies such as OLA, Curb and more are present in market that are
providing same services. Here, shifting from one service provider to other is also easy and less
costly. In addition, most of the customers of company give higher importance to price thus they
can easily switch over other service providers that are offering services at lower price.

Threats of substitute: It refers to the availability of identical products and services which
can be used as the replacement of products and services that are being offered by company. It is
stated that threats of substitute are really high for UBER as there are ample of other companies
that are based on similar business model. In addition, availability of local taxis, buses also
provide direct completion to organization. Public transport is also considered as a substitute of
UBER as they provide services at relatively lower price.
Therefore, it is stated that UBER is facing extensive completion so it is not easy for
company to survive in Industry. There are ample of other service providers are present in market
who are also adopting effective strategies in order to strengthen their position among customers.
So, it is crucial for managers of company to prepare appropriate strategy by looking at current
situation prevailing within industry.
M3) Develop appropriate strategies for improving competitive edge and market position on the
basis of outcomes
With above stated points, it is monitored that there is extensive competition is prevailing at
market place so it is vital for UBER to prepare appropriate strategies so that they can sustain in
market for longer duration. There are a lot of competitors such as Ola, Clay available within
market therefore managers are required to prepare such strategies by which they can grab the
attention of customers. For this, they can provide discount coupons to customers on their ride. In
addition, they can add some new features in existing services such as tourist guide to create a
difference. These strategies will help in gaining positive outcome in competitive market place.
TASK 4
P4) Develop strategic planning through different theories
Porters generic strategy:
This theory was developed by Michael porters, that managers need to keep focus on two
aspects such as cost and differentiation techniques that is vital to attain predefined objectives in
stipulated period of time. It is divided in four strategies that are given as under:
Cost leadership: As per this, cost plays a crucial role in success of company. Lower cost
helps managers to provide products and services to customers at reasonable price (de Sousa

Jabbour, 2019). For this, there are ample of techniques are used under which managers prepare
effective strategies so that they can cut the expenses and earn potential profit margin. It is
essential to produce goods in minimum possible cost and finally provide it to customers at
affordable price. In reference of UBER, they adopt this strategy in order to minimize overall
operating as well as production cost.
Differentiation strategy: As per current scenario, it is crucial to differentiate products
and services from competitors so that customers get attracted towards product and services.
Here, organization needs to use several strategies in order to maintain unique image of brand in
market. For this, they are required to undertake innovative as well as creative approaches to grab
the attention of customers. In references of UBER, they can differentiate their services by
providing some additional services. They can provide service of tourist guide for particular ride.
It will help to differentiate company at market place.
Cost focus strategy: As per this, company needs to make focus over the cost. They need
to make efforts to reduce down existing price of products and services. Now, customers are more
cost sensitive so they want to products & services at minimum price. It is really essential to
attract more number of customers. In context of UBER, it is essential for managers to maintain
price at lower level in order to grab the attention of more visitors.
Differentiation focus strategy: As per this, organization needs to focus on unique
features of product and services (Alberti and Garrido, 2017). In this UBER, needs to provide
unique and different services that are required by customers. It is crucial to get competitive edge
in market place.
Ansoff’s matrix:
Market development: In this, existing products and services are launched that are
designed by organizations in order to attain predefined business goals. Here, UBER can use this
strategy by entering into new market place. It can expand business in Asian Nations in order to
increase in current sales and profit margin of company.
Product development: Here, managers launch new products and services in market that is
essential to retain existing customers for longer run. It is analyzed that customer of UBER are

loyal towards brand so it will be easy for company to launch new products and services. In
context of UBER, they are providing new services in terms of food delivery and more. It will
help organization to earn higher sales and profit margin.
Market penetration: Under this, existing products and services are provided to existing
customers. For this, managers need to prepare effective strategies in order to grab the attention of
customers. In regards of UBER, managers prepare several strategies with an aim to sustain in
current market for longer duration.
Diversification: It is analyzed that diversification is a risky strategy but help to enhance
brand image of company at market place. There is higher cost involve in this. In context of
UBER, it is currently working in diversify fields such as food deliver services, ride hailing and
more. It is helpful to ensure long term sustainability of company.
M4) Devise a strategic plan having strategic priorities and objectives
Strategic plan is made with several strategies for enlargement of business. It is prepare by
managers so that organization can sustain in competition for longer run. This plan is made with
small tactics that are prepared for attaining short term goals. For this, managers formulate some
strategic objectives and priorities which provide them direction to alien their efforts in
appropriate manner.

CONCLUSION
Out of above discussion, it is monitored that business strategies play a crucial role in
overall growth and success of company. It can be concluded that there are several external
factors that influence business performance. Likewise, internal analysis helps to identify current
position of organization in market. For this, different models are used such as PESTLE,
Mckinsey and more. It is analayzed that Ansoff matrix helps to identify current level of
completion prevailing within industry. Moreover, detailed internal as well external analysis is
crucial to prepare effective strategies for success of business.

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