Business Strategy Report: Aston Martin Macro & Internal Analysis

This report provides a comprehensive analysis of Aston Martin's business strategy. It begins with an introduction to the company and its objectives, followed by an in-depth examination of the macro-environment using PESTLE analysis, considering political, economic, social, technological, legal, and environmental factors. The report then delves into the internal environment, employing SWOT analysis to assess strengths, weaknesses, opportunities, and threats, alongside a VRIO analysis to evaluate the company's capabilities. Furthermore, it analyzes the competitive environment using Porter's Five Forces model to evaluate the competitive forces and provides strategic recommendations for improving competitive edge and market position. The report concludes with a summary of findings and recommendations for Aston Martin's strategic management decisions.

Business Strategy
Student Name:
Cristian Matusoiu

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Application of appropriate frameworks for the analysis of impact and influence of macro
environment.................................................................................................................................1
M1 Critical analysis of macro environment to determine and inform strategic management
decisions.......................................................................................................................................3
P2 Analysis of internal environment and capabilities of the organisation...................................4
M2 Critical evaluation of internal environment to assess strengths and weaknesses..................8
P3 Application of Porter's five forces model for the evaluation of competitive forces...............8
M3 Appropriate strategies to improve competitive edge and market position based on the
outcome......................................................................................................................................10
TASK 2..........................................................................................................................................11
P4 & M4 Application of range of theories, concepts and models to interpret and devise
strategies planning for the organisation.....................................................................................11
D1 Application of environmental and competitive analysis to produce strategic directions....14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business strategy is a type of competitive action or move which is taken by organisations
to attract large number of customers, strengthen performance, achieve long term business goals
and attain competitive advantage. It guides enterprises to carry out all operations in systematic
manner so that a desired outcome could be acquired (Agarwal, 2014). The company which is
selected for this report is Aston Martin. It is one of the largest automotive organisations
executing business all around the world. It was founded by Robert Bamford and Lionel Martin in
year 1913. This assignment covers various topics such as analysis of impact and influence of
macro environment on business's strategy, assessment of entity's internal environment and
capabilities. Apart from this, analysis of competitive environment with the help of Porter's Five
force model and application of theories, concepts and models are also covered in this project.
TASK 1
P1 Application of appropriate frameworks for the analysis of impact and influence of macro
environment
Macro environment: The conditions which are available within the economy and
affecting the environment are known as the part of macro environment. There are various factors
which are considered as its elements. These are inflation, deflation rates, gross domestic product,
fiscal policy, employment etc. In order to analyse influence and impact of all of them on Aston
Martin, PESTLE analysis will be used.
PESTLE analysis: It is a tool which is mainly used for the purpose of determining
impact of external factors on organisational policies and procedures. Strategy managers in Aston
Martin use it to formulate strategies for future so that negative situations which may take place in
future could be dealt and responded properly. It has six different elements political, economic,
social, technological, legal and environmental. Detailed analysis of all of them in context of
Aston Martin is conducted below:
 Political: This factor is related to governmental intervention in the organisational
procedures (Baker and Hart, 2016). The elements which are covered by it are foreign
trade policies, labour law, trade restrictions etc. In order to execute business in systematic
manner, it is very important for strategy manager of Aston Martin to make sure that all
the interventions are focused by them while formulating policies for business. All the
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political factors have impact upon organisation because they bound companies to execute
business under certain laws. These are also influencing strategies of Aston Martin
because political party’s changes with time and rules are changes by them frequently. In
order to reach long term business goals, the managers have to make improvements in
policies accordingly. Brexit is one of the main political factor which has affected the
organisation because due to this most of the organisations are not able to import or export
material from other countries. It has resulted in higher cost of production and lower costs.
 Economic: The elements of this factor are economic growth, interest rate, inflation
deflation, disposable income of businesses, customers etc. For strategy manager in Aston
Martin, it is very important to be aware of changes in such components because all of
them may leave impact upon business. In UK, government is supporting such industries
which are generating higher profits and benefiting economy by losing the trade policies.
Frequent change in economic factors will influence strategy of the company because old
one will require to be modified (Beltagui, 2018). There are different economic factors
such as trade policies, tariffs and taxes. Higher profits requires higher payment of taxes
which affect the funds of the company (Economic factors for Aston Martin, 2019).
 Social: All the elements such as belief, attitude, age, gender, buying behaviour, culture
etc. that are dependent upon customers are considered as the part of it. Business strategy
of Aston Martin gets impacted and influenced due to social factors because all of them
changes frequently. It directly leaves impact upon demand and supply of products which
are sold by the company. For example, currently demand for electric vehicles is
increasing continuously and if enterprise is not able to meet it, then it may result
adversely. In order to ignore their negative impact and influence strategies are changed
by managers.
 Technological: New ways of engineering, techniques, technology advancement etc. are
considered as technological factors of PESTLE analysis. Strategy manager in Aston
Martin pays attention toward all such types of factors in order to ignore its negative
impact upon business and its strategies. As such elements are changing continuously so,
the company has decided to launch cars with latest technology (artificial intelligence).
With the help of it, organisation will be able to generate higher revenues and increase
profitability (Bentley and Gibney, 2017). As mostly petrol based cars are sold by Aston
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Martin to its customers but now days, there is high demand of electric cars therefore it
may influence organisation and its strategy because managers have to form new plans
according to latest trends.
 Legal: This element of PESTLE analysis is focused with various implications such as
advertising standards, consumer right, laws, product safety etc. All these rules and
regulations leave positive impact upon Aston Martin because all the strategies are formed
by manager according to them which helps to establish a good market image. Some of the
elements changes frequently which influences strategy of Aston Martin because in this
situation managers have to make significant changes in organisational policies.
Sometimes, it is very difficult to implement frequent modification in procedures of
business which will leave negative impact upon its functionality because if laws are not
complied by Aston martin then, it may result in legal interference in operations. Different
legal policies such as BERR, DECC and DIT vehicles legislation which are affecting
Aston Martin because managers have to formulate decisions according to them (Legal
factors for Aston Martin, 2019).
 Environmental: Such types of factors include environment protection rules, carbon
footprint, pollution, climate change etc. In order to execute all the operational activities in
systematic manner, strategy manager of Aston Martin pays attention toward this element
of PESTLE analysis. It influences strategies and the whole organisation because if a car
in future is engineered by company which is creating harm for the environment then,
company have to modify the strategy of it so that negative situation could be controlled
(Cooper, 2017).
M1 Critical analysis of macro environment to determine and inform strategic management
decisions
Aston Martin is one of the major sellers of cars all around the world. There are various
factors which are affecting its macro environment. For example, technology changes with time
and if it is not focused by the company then it may affect the revenues and profits. In order to
ignore such types of situation it is very important for strategy manager of the company to form
strategic management decisions such as keeping detailed information of latest trends. It will help
to avoid adverse impact of continuous changes in technology. Social factors such as customer's
preferences regarding cars also changes with time. In order to ignore its negative impact, Aston
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Martin can launch new products which are having higher demand in the market. Offering new
product as per the customer's demand helps firm in attaining growth and success in market.
P2 Analysis of internal environment and capabilities of the organisation
Internal environment: All the factors which are available within the organisation and
affect decision making to management are known as the part of internal environment. For all the
business entities, it is very important to analyse such elements. The technique which is going to
be used by junior strategy manager of Aston Martin for this purpose is SWOT analysis (Coulson-
Thomas, 2018).
SWOT analysis: The model which is mainly used by strategy managers to identify the
factors which are resulting in strengths, weaknesses, opportunities and threats is known as
SWOT analysis. Assessment of it in detail for Aston Martin is as follows:
Strengths Weaknesses
 All the cars which are engineered by
the company are made by focusing on
their quality which helps to build brand
loyal customers.
 It has expanded its business in various
countries which has helped it to cover
larger market area (SWOT analysis of
Aston Martin, 2019).
 The product range of Aston Martin is
very small which limits the choices of
customers.
 It has captured a big market share but
its share is very low as compare to its
competitors in the market which affects
its revenues.
Opportunities Threats
 In order to make the cars easily
available to clients, Aston Martin can
plan to open new showrooms in
different locations which will helps it to
generate higher profits.
 There is a small number of service
centres of Aston Martin all around the
world therefore the company can plan
to open new service centres to facilitate
 Most of the cars which are sold by the
company are based upon petrol and
currently the price of it is rising
continuously which may leave negative
impact upon demand of cars of Aston
Martin.
 There is high level of competition in
automotive sector which may affect the
profitability and productivity of the
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repair of its cars. company in future.
VRIO analysis: In order to examine different capabilities of an organisation, VRIO
model is used by strategic managers so that they can form strategies for future perspective. It is
also used in Aston Martin and detailed assessment of all its elements is as follows:
Capabilities Valuable Rare Inimitable Organised
Marketing
activities
✔ ✘ ✘ ✘
Profitability ✔ ✔ ✘ ✘
Human resource ✔ ✔ ✔ ✘
Brand image ✔ ✔ ✔ ✔
Valuable: From the above table, it has been analysed that there are four major
capabilities of Aston Martin which are helping the organisation to execute all its operational
activities. These are marketing activities, profitability, human resource and brand image. These
are valuable for the company because all of them helps strategy managers to analyse actual
position of business and formulate plan for future perspective (Donnelly, Begley and Collis,
2017).
Rare: The VRIO analysis shows that marketing activities which are used by Aston
Martin are not rare because all the companies within the industry perform such activities in order
to spread awareness of its cars. Profitability, human resource and brand image are some of the
capabilities of Aston Martin which are rare because all the organisations in automotive sector are
not able to generate higher profits, acquire a good brand image and skilled employees (Espejo,
2015).
Inimitable: The table which is formed for the purpose of determining capabilities of
Aston Martin it has been analysed that profitability of the company is not inimitable. Other
companies such as Bentley, Tesla etc. can generate same profits which are acquired by the
organisation every year. Good brand image and skilled human resources are inimitable for the
enterprise as it is impossible for rival entities to copy these capabilities because these are highly
focused by the managers.
Organised: The VRIO analysis shows that human resource in Aston Martin are not
organised by the company properly due to higher focus on the manufacturing process. Brand
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Image is appropriately managed by Aston Martin because strategic managers within the
organisation try to fulfil all the requirements of clients. All the cars which are sold by the
enterprise are made by paying attention towards their quality.
Porter's value chain analysis: There are nine different elements of this model which
were introduced by Michael Porter. All of them are described below in the context of Aston
martin:
 Inbound logistics: All the raw material which is purchased by Aston martin is
considered as the part of this activity in which organisation procure them to perform
operations in systematic manner. The material is brought with the help of trucks in
warehouses.
 Operations: When raw material is in-bounded then it is used by staff members to
perform manufacturing activities and engineer cars to fulfil market demand.
Standardisation of models is the main procedure which is performed under this activity.
 Outbound logistics: When cars are engineered then all of them are delivered to the
showrooms with the help of trucks for the purpose of sales.
 Marketing and sales: When all the cars reach to the showrooms organisation form plan
for marketing and sales. All the activities which are focused under this element are
pricing, promotion, communication etc.
 Service: These are concerned with aftersales services in which free servicing of cars etc.
type of facilities are offered to clients. It also includes delivery, installation and other
services.
 Firm infrastructure: There are four main elements of it which are management, finance,
planning and legal structure which are required to be very effective. In Aston martin all
of them are well managed.
 Human resource management: Managers in Aston Martin are mainly focused with
human resource management of employees as it can help to reach all the long term
business goals successfully.
 Technology development: In order to be the top of the industry it is very important for
managers of the organisation to pay attention toward technology development because
with the help of it large number of customers could be attracted toward the company.
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 Procurement: In order to perform all the operation in systematic manner the managers
are paying attention towards procurement of real time inventory as it helps to make sure
that the material which is used for manufacturing cars is of high quality.
Mckinsey's 7s model: This model was developed by Mckinsey for the purpose of
facilitating the organisation to maintain hard and soft elements. There are 7 main elements of it
which are described below in context of Aston martin:
 Strategy: In order to operate a business in systematic manner it is very important for
organisations to formulate different effective strategies. Aston Martin is implementing
product development strategy in which the organisation launches different variation of
cars for the purpose of fulfilling requirements of clients.
 Structure: For all the organisations such as Aston martin it is very important to follow a
proper structure so that all the work within the company could be managed. Hierarchical
structure is followed by managers of the enterprise which helps it to communicate
properly.
 Systems: All the processes and procedures of the company are known as systems which
are implemented by top executives. In Aston Martin currently management is focusing on
human resource management and marketing systems as with the help of both of them
growth could be acquired by entity.
 Style: For leaders of all the organisations such as Aston Martin it is very important to
follow a proper leadership style so that effective guidance could be provided to staff
members. Managers within the company are focusing on democratic style of supervision
which helps them to form strategic decisions.
 Staff: In order to accomplish all the long term goals it is very important for companies to
acquire skilled and experienced staff. Currently, Aston Martin is having highly
productive employees who are contributing in the development of company.
 Skills: These are considered as one of the main element which should be focused by top
level executives. In Aston Martin management is focusing on critical thinking, decision
making and communication skills of employees as with the help of all of them long term
goals could be accomplished.
 Shared value: All the norms and standards which are set by leaders to guide employees
through out the way in which they perform different activities are known as part of this
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element. In Aston martin management have different shared values which are paying
appropriate compensation to employees and providing them a good environment to work.
M2 Critical evaluation of internal environment to assess strengths and weaknesses
In order to execute operational activities in systematic manner it is very important for an
organisation to have specific capabilities. Few of them which have been acquired by Aston
Martin are marketing activities and brand image. Organisation spends very low money to market
its cars which shows that this capability is a weakness for the company. On the other hand,
market image of the organisation is very good which strength for the enterprise is because the
managers within the entity are focused with high quality of cars. The organisation also has highly
skilled and knowledgeable workforce which is strength of company that provides it competitive
edge in market. From the Mc Kinsey's 7s model and porter's value chain it has been determined
that managers are focusing on the each and every element for the purpose of attaining long term
business goals. Both the models have provided information regarding strength of the company
which are effective style, staff, system, technology development, inbound and outbound logistics
etc.
P3 Application of Porter's five forces model for the evaluation of competitive forces
Porter's five forces model: This tool was developed by Michael Porter in year 1979 in
order to facilitate business entities to determine competition within the industry. With the help of
it, strategic decision for future could be formed according to present situation of business. There
are five different forces under this model which are analysed by junior strategy manager in Aston
Martin to determining its competitive position within the industry (Porter's five force model,
2019). All the elements of this model in context of the enterprise are discussed below:
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Illustration 1: Porter's five forces model, 2019
(Source: Porter's five forces model, 2019)
 Rivalry among existing competitors: This force of the model is mainly used to analyse
the level of competition which is available within the industry. With the help of it, large
as well as small business entities can analyse that they will be able to survive in the
market with end number of rival companies within same sector. Aston Martin is the part
of automotive industry in which various organisations are executing their operational
activities. These are Volkswagen, Jaguar, Tesla etc. All these enterprises are considered
as major competitors of Aston Martin therefore, the competitive rivalry within the sector
is high for the company (Fisk, 2015).
 Bargaining power of suppliers: This force of the analysis is based upon the power of
suppliers through which they can increase the price of raw material which is delivered by
them to companies to manufacture their products. If there are end number of them then,
their power will be low and in opposite condition, it will be high because the
organisations will not have any choice to buy material from other suppliers. In
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automotive industry there are various suppliers of goods for the manufacturing processes
of cars. Aston Martin is also a part of this sector so, the power of them for the company is
low because if one of them is selling raw material on higher price then organisation can
switch to another party to buy goods.
 Bargaining power of customers: When numbers of buyers for the products which are
sold by the companies are high then bargaining power of customers will be low but, in
opposite situation, their power will be high because they will bargain on the price. In
Automotive sector, there is end number of buyers for all the companies as now a day’s
most of the people are willing to have a car. Aston Martin is also having a strong
customer base and a large market share is captured by it. Therefore, power of bargaining
of clients is low for the enterprise due to end numbers of customers.
 Threat of new entrants: When a new competitor introduces itself in the market then,
power of existing organisation may get affected due to attractive schemes of the
companies. Automotive sector is one of the largest industries in the world and for an
organisation which is willing to enter in it, it is very important to acquire higher funding
and conduct marketing activities. It shows that there are various barriers to enter in this
sector (Klyatis, 2015). Therefore, the threat of new entrant for Aston Martin is very low
because it is not easy for other firms to be a part of automotive industry.
 Threat of substitutes: The products which are providing same benefits as the main
organisation is offering then, it will be treated as substitute. Aston Martin is the part of
automotive sector where different types of cars such as electric, tailor made, fully
automatic, cars with artificial intelligence etc. are sold by the companies to the customers.
Most of the vehicles which are sold by the company are based on petrol and there are
various substitutes of it in the market. It shows that threat of it for the organisation is very
high as customers may switch to tailor made, electric and fully autonomous car (Lee and
Smith, 2018).
M3 Appropriate strategies to improve competitive edge and market position based on the
outcome
From the Porter's Five Forces Analysis, it has been determined that Aston Martin is
required to focus on the substitutes which are available in the market for its cars and competitors.
For this purpose, organisation can conduct market research and use the strategy of launching
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