Macro Environment Factors Impact on Business Operations Analysis

This report provides a comprehensive analysis of the impact of the macro environment on business operations, covering political, economic, social, technological, legal, and environmental factors. It examines the positive and negative effects of these factors, along with an internal and external analysis of a business, exploring strengths, weaknesses, opportunities, and threats. The report also details the interrelation between internal organizational factors and external macro factors, demonstrating how they collectively influence business performance. The conclusion summarizes the key findings, emphasizing the importance of understanding both internal and external factors in the business environment. Desklib offers students access to this report along with a wide array of study tools and resources.

Business and business
environment

Table of content
 Introduction
 Positive and negative impacts of macro environment on business
operations
 Internal and external analysis
 Interrelation of strengths and weaknesses with external macro
factors
 Conclusion
 References

Introduction
Business is defined as the legal entity that is
engaged in various activities like commercial,
industrial and professional activities. The term of
business is used for the purpose of defining
activities and efforts of individuals related to
producing and selling products and services for
generating profits.

Positive and negative impacts of macro environment on
business operations
 Political factors: It is related with political stability
and instability, government approaches, trade
restrictions and taxation policy that impact business
operations.
 Economic factors: In economic factor various
aspects are includes such as exchange rates,
consumer disposable income , inflation rates and
various others.

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 Social factor: Social factors of macro environment is
related to population size, behaviour of customers,
health and safety as well as cultural norms and
expectations that need to be considered in business
decision-making process
 Technological factors: Technological factors are related
to technological advancement, research and
development and innovation in technologies that help
business to gain competitive advantages.

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 Legal factors: There are various rules and regulations are
includes in legal factors that are developed by government of
country such as employment laws, health and safety laws and
taxation regulations that impact business performance and
functionality (Octavia, and Ali, 2017).
 Environmental factors: Environmental factors are concerned
with surrounding environment as well as influence ecological
aspects. It includes environmental protection laws, waste
disposable laws and various others

Internal and external analysis
Strength Weaknesses
 Admiral gains good return on capital expenditure that help
business to enhance its profitability ratio.
 Respective organisation has skilled workforce who are
able to perform business operations in efficient manner
that help business to attain competitive advantages.
 Admiral maintains strong relationship with customers that
provides them greatest experience and satisfaction from
organisational products.
 Admiral provides quality sports products to customers that
maintains strong image and goodwill of organisation that
differentiate it from other competitors.
 Financial planning of Admiral is not good and through
managing current and liquid assets business can manage
its cash flow in efficient manner.
 Investment in research and development of Admiral is low
than other organisation that limits business success and
development.
 Admiral is not good in products demand forecasting so,
business missed various opportunities as compared to
other competitors.

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Opportunities Threats
 New taxation policies create opportunity for
business through increasing profitability ratio.
 Reduction in the cost of transportation due to lower
shipping cost provides an opportunity to business
that enhance organisational profitability and help to
gain higher market share.
 Development of new technologies helps Admiral to
practice differentiation pricing strategies in market
place that enable organisation to maintain loyal
customers for longer period of time.
 High control of management impacts on
organisational growth and development that
impacts on business profitability and performance.
 Competition in sports industry is the major threat
that is faced by the Admiral organisation. It directly
impacts business profitability and sales ratio.
 Changes or variation in political system and rules
impacts business operations and policies as well.

Interrelation of strengths and weaknesses with external
macro factors
Organisational internal factors such as strengths and weakness are interlinked with
macro environment factors that impact business operations. Interrelation of these
factors are mentioned below:
Interrelation Strengths Weaknesses
Political Factor Government policies as well as
political system of UK are stable that
create strength for Admiral
organisation through executing these
legislations and policies in business
operations. It helps business to run
business in efficient manner without
facing any issue.
Sudden changes or alteration in
government policies and legislations
create complexity for business to
implement them in efficient manner.
Admiral find it difficult to adjust in the
sudden change environment and
policies. It impacts business operations
as well as performance.

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Economic Factor In UK number of people are willing to invest in
organisation that help Admiral to enhance investment
which lead business towards success and development.
Respective organisation performs its operations in UK
which is economically stable country help business to
improve sales and profitability ratio.
There are regular changes are happened in interest rates,
inflation rate as well as business cycle that impacts
performance of Admiral organisation (Snyman and
Smallwood, 2017). It hinders business to attain its
determined strategic goals and objectives in efficient
manner.
Social Factor In the country of UK, consumers often prefer shop
products from online websites and portals due to
availability of variety of products. Admiral appoints
skilled and capable employees who are able to
understand needs and demands of customers and
provide them relative products that enhances
organisational customer base.
There are several rules and regulations are implemented
by the government of UK that impacts business
performance and functionality in competitive business
environment. Admiral sales and profitability ratio is
decreased.
Technological Factors Through adopting latest technologies like artificial
intelligence, search engine optimisation and others
Admiral can bring innovation in business products and
services that enhance demand and sales of organisation.
There are regular changes are happened in technology
and implementation of technologies require high
investment that enhances business cost and reduce the
profitability margin.

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Legal Factor Admiral follow all legal laws and
regulations that are developed by the
government that help business to run
operations in efficient manner and gain
competitive advantages than other
competitors.
Admiral is the sports brand that is
bound with several policies that
impacts business orations in negative
manner.
Environmental Factor Admiral management department
adopts waste management techniques
and eco-friendly technologies that
helps business to survive in competitive
business environment and maintain
strong image.
Admiral's activities related to
manufacturing and corporate social
responsibility is weak that impacts
business functions.

Conclusion
 As per above report, it can have concluded that
business environment is related to various internal as
well as external factors that impacts business
operations and performance. There are various types of
business that are established with different objectives,
scopes and visions.