Business and Business Environment: Macro Environment Impact Analysis

This report provides an in-depth analysis of the impact of the macro environment on business operations, focusing on both internal and external factors. It utilizes the VRIO framework to evaluate internal resources and competitive advantages, specifically referencing ASDA. The report then employs PESTLE analysis to assess the influence of political, economic, social, technological, legal, and environmental factors on business operations. Furthermore, a SWOT analysis is conducted to evaluate the strengths, weaknesses, opportunities, and threats faced by organizations in relation to the macro environment. The analysis highlights how these factors intertwine to affect the organization's performance and strategic decisions, emphasizing the importance of adaptability and resource management. The report concludes with a discussion on how to leverage strengths and opportunities to mitigate weaknesses and threats, ensuring a competitive edge in the market.

BUSINESS AND BUSINESS
ENVIRONMENT PART-2

Contents
Task 3..........................................................................................................................................................3
4 Impact of macro environment by internal analysis on business operation..........................................3
Task 4..........................................................................................................................................................4
5 Impacts of external environment on business operation.....................................................................4
6 Evaluation of strength and weakness of organization to interrelate with macro environment factors.
.................................................................................................................................................................5
REFRENCES..................................................................................................................................................7
Books and journals:.................................................................................................................................7

Task 3
4 Impact of macro environment by internal analysis on business operation
A business organization is affected by various internal and external factors which impacts
on its growth and operations. In order to significantly conduct an analysis on internal factors,
VRIO framework would effectively analyze its positive and negative impact. This can be
understood below:
VRIO analysis: It is an effective framework and a set of 4 tools which analyses
competitive edge of an organization in the market by knowing their potential to stand at a market
situation. The four essential framework influences on the organization product and its power.
This can be understood below in context of ASDA(Morrish, and Jones, 2020).
Value: This factor focuses on available valuable resources of company through which
effective products and customer demands can be satisfies. In context with ASDA, they have their
effective resource and create positive impact on organizations image. Their employees are
considers to be valuable factor as they make their efforts to make best potential output.
Rarity: This factor shows whether the company prove rare product which does not
include similarity with other products and are difficult to assess. Rarity signifies competitive
edge into market as customer demand for something new and innovative. ASDA provides
product which could available on any store and creates competition.
Imitability: This factor influence on easy excess to companies resource by ease in
finding its substitute, it creates moderate competition. ASDA has some imitable resources like
their patents and network distribution as it require high cost to imitate. On the other hand, their
product and employees are imitable as other competitors could acquire them.
Organization: This factor influence on the management and internal potential of the
company without it a company could not enjoy competitive advantage. ASDA needs to use their

patent product to make effective use of it also, need to asses value and imitability in company
resources.
Task 4
5 Impacts of external environment on business operation
External environment impacts on companies external opportunities. This could be
analyses by PESTLE analyses which is an effective tool to shows companies competitive market
power.
PESTLE analysis
This analysis influence on the significant elements of outside factors impact on
organization and bound their operation into a limited function by keeping these factors into
consideration.
Political: political factors influence by legislation law, taxation, and revenue charges which is
imposed by government on every business. In context with ASDA, UK legislation has made
amendment regarding taxes and banned import in the country which creates negative impact on
companies profitability and sales.
Economic factors: This factor includes employment opportunities, employee welfare, managing
demand and supply with regular cash flow in society.(Aithal, 2017). ASDA provides good
salary and other compensation also, regular supply of products into various cities. This creates
positive impact on contries economy. Hence, would raise competitive advantage for ASDA.
Social factor: This factor consists organization culture, beliefs, and value towards societies
welfare in which they are contributing. ASDA needs to evaluate this factor by providing healthy
lifestyle to customer which raises standards for society and company also. This factor impact
positively on organizations growth.

Technological factor: This factor promotes efficient use of upcoming technology. ASDA
promoting digital sales through its websites which creates positive impact on organisation
consistency and rapid growth.
Legal factors: ASDA must evaluate its operation followed by government laws and policies. UK
government ensure that every employee would get minimum wage rate breach of this law
creates negative impact on companies reputation ( Johnson, and Sohi, 2017).
Environmental factor: This factor influence on societies well being and welfare of environment
by providing healthy products, in recent time, while the situation of global pandemic
organization should provide health and sanitizing facility and their outlet and avoid contact
delivery at doorsteps. ASDA must provide eco-friendly product which are beneficial for both
customers and society. Which include organic and hygienic food items,
6 Evaluation of strength and weakness of organization to interrelate with
macro environment factors.
SWOT Analysis
This is a modern framework of tools which shows companies internal strength and
weakness which can overcome by adapting opportunities and resolving threats.
Strength: companies strength shows its best efforts in well managing operations. Is
could be their best product which make it rare from its competitor or could be employee
engagement. ASDA has superior technologies and perform with economies of scale which
influence positively on its strength and organizations wide reach (Tallman, Luo, and Buckley,
2018).
Weakness: weaknesses shows irrelevancy and inaccuracy is business operation. In context with
ASDA, products are not good as much as their competitors. And in recent years, it drives
misconduct in advertising and promotion. This has cause severe negative impact on companies
position that tends to make a part of many controversies.

Opportunities: This reflects available and upcoming opportunities in the market that should be
make best use of it before others do. Opportunities open a gate to enter for innovation and
increase companies value at wide level. ASDA has the biggest opportunities to make full use of
online sources in promoting their products as online services are taking lead in global market.
Threats: Threats are the reason behind organizations failure to expose growth and ease in
imitable excess. ASDA is facing the most tethering situation creates by their competitors those
have more valuable and unreachable resources. Its biggest competitors are Tesco and
Sainsbury’s which held huge market share and comparatively quality products.
From the above analysis of internal and external factors which creates impact on macro
environment situations, it shows various negative and positive impacts on organizations
operations (Ratten, 2020). These strength and weaknesses should get interconnected by values
by indulging effective resources are make product rare from the other. This will overcome the
weakness of ASDA and enjoy competitive advantage. ASDA has high cost resources which
could not be imitate easily, it should make potential use of these resources in order to eliminate
cause of threat. Also, external factors needs accuracy and accountability to create positive impact
on companies reputation.

PART-2
REFRENCES
Books and journals:
Aithal, P.S., 2017. A critical study on Various Frameworks used to analyse International Business and its
Environment. International Journal of Applied Engineering and Management Letters
(IJAEML). 1(2). pp.78-97.
Johnson, J.S. and Sohi, R.S., 2017. Getting business-to-business salespeople to implement strategies
associated with introducing new products and services. Industrial Marketing
Management. 62. pp.137-149.
Morrish, S.C. and Jones, R., 2020. Post-disaster business recovery: An entrepreneurial marketing
perspective. Journal of Business Research. 113. pp.83-92.
Ratten, V., 2020. Coronavirus and international business: An entrepreneurial ecosystem
perspective. Thunderbird International Business Review. 62(5). pp.629-634.
Tallman, S., Luo, Y. and Buckley, P.J., 2018. Business models in global competition. Global Strategy
Journal. 8(4). pp.517-535.