Business Strategy Report: Analyzing Aston Martin's External Factors

This report provides a comprehensive analysis of Aston Martin's business strategy, focusing on the impact of the macro environment and the company's internal capabilities. The report utilizes frameworks such as PESTLE and VRIO to assess external factors like political, economic, social, technological, legal, and environmental influences, as well as internal strengths and weaknesses. It examines stakeholder analysis and Porter's Five Forces to evaluate competitive forces within the market sector. Furthermore, the report explores strategic planning, interpreting various theories, concepts, and models to devise strategies for Aston Martin. The analysis aims to provide insights into how the company can adapt to market changes, improve its competitive performance, and achieve its business objectives in the automotive industry.

Business Strategy
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Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Frameworks analyse the impact and influence of the macro environment on a given
organisation and its strategies.....................................................................................................3
M1 Critically analyse the macro environment to determine and inform strategic management
decisions......................................................................................................................................7
TASK 2............................................................................................................................................7
P2 Internal environment and capabilities of a given organisation using appropriate
frameworks..................................................................................................................................7
M2 Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set........................................................10
TASK 3..........................................................................................................................................10
P3 Porter’s Five Forces model evaluate the competitive forces of a given market sector for an
organisation...............................................................................................................................10
TASK 4..........................................................................................................................................12
P4 Range of theories, concepts and models, interpret and devise strategic planning for a given
organisation...............................................................................................................................12
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17
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INTRODUCTION
Business strategy is considered as an important action and decision that taken by
company to reach its final goals and objectives. Mainly, it is combination of different plan that
needs to implement by company with the aim of enhancing their productivity level at market
place. In order to grow and attain success, business strategy play a vital role in company because
it provides an effective path and direction to execute entire operational activities (Shuen, 2018).
Current report is based on Aston Martin, is a famous car manufacturing company that specialised
in manufacturing sports cars and grand tourers with the aim of generating larger profitability
level. Report is going to discuss about various models and theories that used to analyse the actual
impact of external environment over the business strategy and implementation of plan. Along
with this, it also assists in determining the internal capabilities and competencies of business
organisation. Apart from this, Porter's five forces model is also help in analysing as well as
evaluating competitive forces that determine the industry and market forces. This can be
beneficial in improving competitive performance of company at market place.
TASK 1
P1 Frameworks analyse the impact and influence of the macro environment on a given
organisation and its strategies
In an organisation, business strategy is refers to the plan which company needs to
develop with the aim of inviting more and more customers towards its services. This is the
reason that company is responsible for developing an effective strategy so that entire activities of
company can be successfully completed along with more effectiveness. Business strategy
provide direction in which company perform their operational activities that support in
improving its competitive performance. In context of Aston Martin, developing an effective
business strategy contributes in attaining all the predetermined goals and objectives so that
competitive success can be easily accompanied by company at market place. As, the main
mission of business is to become a leading and competitive business in the market by providing
positive experience to its customers. This will provide assistance to organisation in developing
its positive brand image. Furthermore, Vision of Aston Martin is to work for community by
protecting as well as maintaining environment safe from any kind of pollution. Both mission and
vision are related with organisational objectives as it contributes in enhancing profitability and
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competitive in market place. These are attained by effectively implementing the business
strategy as it support business in improving its competitive image at market by serving best
quality of services to its customers as per their needs and wants. In relation to this, overall
business strategy of company is directly influencing and impacted by its external factors which is
analysed by PESTLE. As it is used by most companies for making effective strategic planning. It
is an amalgamation of six components which are political, economic, social, technological, legal,
and lastly, the environmental factors. All these components help an organization in shaping its
macro business environment. Talking about Aston Martin, it is operating its business in a highly
complex and dynamic environment that is known for its regulatory changes, optimizing the
environmental changes for increasing growth, collective social trends by considering the
technological changes. Therefore, to understand this better a detailed description of all the
components are given below:
Political: In order to gain long-term sustainability and profitability, the political factor
plays a significant role with a strong influence. Political stability tends to increase the company’s
sensitivity to change at the international level. Aston Martin has faced many issues in the United
Kingdom because of the uncertainty whether it is related to changing policies (implementation of
BREXIT), taxation, trade restriction, and protection for intellectual properties. BREXIT has
impacted the long-term benefits of future trends and there is less exposure to global political
development. Any kind of alteration is acting as a tariff barrier and restricting other companies
from having a new international relationship for future trades. Therefore, Aston Martin needs to
look after multifaceted factors for the smooth conduction of activities.
Economic: It determines the growth trajectory of a company because this includes foreign
exchange, interest rates, inflation, marketing conditions, etc., with a fluctuation in the exchange
rate that has influenced the profitability because of which a decline in the local currency was
seen. A rise in (high net worth individual) has changed the condition of the labour market. Aston
Martin had to pay an increased rate for attracting a large number of talented workers to improve
the performance of the business.
Social: Demographic trends are changing at a very high speed and it includes elements
such as the aging population, socio-economic variables, migration trends, and so on. In context
with, Aston Martin, the company has to identify the factors of consumer’s shift and change in
preferences (Bıçakcıoğlu-Peynirci and Tanyeri, 2020). The rise in disposable income because of
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the increase in employment rate and the market growth of used cars are the two main factors, and
however, Aston Martin needs to make changes in the strategies considering people’s general
attitudes.
Technological: Rapid growth in the field of technology has considered it the most
important factor of PESTLE analysis. Increasing profitability, enhancing the efficiency of the
operational activities, and many more are some of the technological trends which have provided
companies with maximum benefits. Aston Martin has shown its interest in bringing major
transformation by providing cars that generate powers through electricity or launching automated
cars that don’t require a driver. Therefore, thinking of using and converting most of the activities
digitalized with the help of advanced technologies.
Legal: No company can enter into the new market without knowing the legalities, rules,
and regulations. It is important to understand to avoid some serious complications. Majorly the
laws that need to be considered in this segment are consumer protection laws, employee
protection law, laws related to intellectual property rights, and so on. However, talking about
Aston Martin, as it is a car manufacturing company so for them amenability of specific vehicle
safety norms is important because avoiding them can create a serious issue for the manufacturer
and the company itself.
Environment: With the change in the climatic condition, it is developing consciousness
in the minds of the companies. Aston Martin is inclined towards manufacturing cars that are
made through renewable technologies to save natural resources (Mahmood, Chung and Mitchell,
2017). Greenhouse gas is the most harmful component and the reason for the depletion of the
ozone layer, Aston Martin is introducing engines that are of low capability yet have the power to
give a smooth ride to customers. Therefore, the company is moving towards environmental
sustainability.
Furthermore, all the above factor of external environment helps in determines the actual
impact over the Aston martin performance. With the assistance of this, company can easily
expand their business activities in market place by grabbing customers attention towards its
services that they offered in market place. This can be also effective for developing business
strategy that company can used to attainment of all the set goals and objectives in stipulated time
frame. In addition to this, stakeholder analysis is also important as it may assist in determining
the impact over the organizational activities. Mainly, stakeholder analysis matrix is referring to
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the effective model that evaluated the power and interest of stakeholder within the Aston Martin.
This can be contributing in enhancing the overall performance of company at competitive market
place. In relation to Aston Martin, stakeholder matrix is implemented with the aim of analysing
the actual power within the company that contributes in increasing the chances of attaining
competitive edge in market place:
These stakeholders are determined preceding in this matrix that directly influence overall
strategy of Austin Martin. This is the reason that company is implement or analyse stakeholder
interest as it supports in developing ab appropriate strategy. With the help of this company can
attain long term goals and objectives without any kind of obstacles and complexities (Ciasullo,
Cardinali and Cosimato, 2017). In context to this, the most influential stakeholders within the
company are those stakeholders who has high power along with high interest because their
power decision making can be directly influence the entire business activities and strategies as
well. On the other side, suppliers are the less interested stakeholders because they do not have
power and interest in organizational decision-making activities in relation to its strategies and
planning activities. As they less interest within the business operations and also less involvement
in executing the same.
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M1 Critically analyse the macro environment to determine and inform strategic management
decisions.
The market is changing every day, and many things are evolving and developing over time. The
microenvironment includes some of the factors that are beyond the company's control, but there
is a requirement to have a look over these factors. After analyzing the microenvironment of
Aston Martin, it is understood that the company will have to look beyond BREXIT as they will
have to think about making strategies according to the new laws and government policies. By
providing new job opportunities to individuals company can work on minimizing the high net
worth individual (Bentley-Goode, Omer and Twedt, 2019). Considering the socio factor, Aston
Martin will have to look at the social lifestyle of people living in the United Kingdom so that
how their demands can be fulfilled. The company is doing its best to connect with its valuable
customers, and they are providing them with all the facilities to make their ride comfortable. But,
Aston martin will have to look at the rate of technological obsolescence to remain the customer’s
priority. Legal development doesn’t change rapidly but this puts an impact on the industry. So,
Aston Martin should look over all the laws, rules, and regulations for avoiding complications in
business. Business trades are mostly influenced by the environmental factor, if the conditions are
favorable then more and more profits are being gained. Therefore, the company should establish
its plant considering the favorable conditions.
TASK 2
P2 Internal environment and capabilities of a given organisation using appropriate frameworks
It is important for every business to analyse their capabilities and resources for successfully
executing as well as completing operational activities. Along with this, it is also beneficial in
develop an appropriate planning within the business that support in attainment all the
predetermined goals and targets in an effective way (Johansson and Kask, 2017). One of the
main purposes of analysing internal environment is to access all the resources, competitive
advantages, competencies and so on. These can be support in in evaluating the actual strength
and weakness of business organization at the time of developing strategies. In this VRIO is an
effective model that used by organization in order to analyse the internal capabilities of
company. This can be understood by following description:
RESOURCE VALUABL RARE INIMITABL ORGANISAB COMPETITIV
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S E E LE E
ADVANTAGE
Market
Image ✓ - - -
Temporary
Competitive
Advantage
Production
Capacity ✓ ✓ - -
Temporary
Competitive
Advantage
Innovation
Capabilities ✓ ✓ ✓ -
Sustainable
Competitive
Advantage
Human
Resources ✓ ✓ ✓ ✓
Potential
Competitive
Advantage
As per preceding analysis of VRIO model on the basis of internal aspects of business it has been
evaluated that there are different factors are determining within the business organization as
these factors are valuable, rare, inimitable and organisable in nature (Sanden, 2016). These are
directly support to company in achieving competitive advantage at marketplace from its
competitors by providing best quality services to its customers. The description of above factors
can be understood by using following point,
Valuable:
 Market Image: In relation to market place, the image and performance of Aston Martin is
competitive in nature that is consider as a valuable asset for the business organization.
This will support business in successfully expanding as well as developing approach at
different geographical location easily. With the assistance of this, company can generate
larger profitability from its competitors at market place.
 Production Capacity: Aston Martin has good and effective production capacity which is
valuable because it may assist in providing its automotive products along with detailed
investigation and at the same time also analysis customer requirement in order to fill
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market gap. This is possible by providing quality services according to requirements of
customers in market place.
 Innovation Capabilities: Company is famous for its innovation activities that support
them in enhancing its competitive edge. This is possible by continuous improvement
within the current practices and quality of services that offered in market place. Unique
and innovative products are always attracted customers and also influence them to buy
the products. This can be assist executing business strategy in more successful manner.
 Human Resources: Aston Martin have capable and skilled employees who are able in
executing their task activities in an effective mode. This will assist in providing
satisfactory services to customers and make them loyal towards the brand.
Rare:
 Production Capacity: Aston Martin has best production department that focus on
maintaining their network different suppliers, who provide quality raw materials that
contributes in increasing overall their effectiveness and at the same time also assist in
keeping it rare at market place.
 Innovation Capabilities: Aston Martin having innovative skills, capability and
technological input that contributes in keeping uniqueness in its product line. This can be
effective in increasing overall quality of operational activities. By this, company serve
unique products which is totally different from others at market place.
 Human Resources: It is quite complex activity for business organization to includes
skilled and competent employee who have ability or capability to effectively accept all
the challenges. This make company image more competitive and famous in market place.
Inimitable:
 Innovation Capabilities: Innovation within the business organisation is considered as an
important asset and patented that contributes in increasing the positive brand image. This
is also help in inviting more and more customers towards its unique and innovative
products.
 Human Resources: One of the major uniqueness of Aston martin is its employees who are
skilled, capable, talented and unique in nature that can be beneficial for company in
developing its popular brand image. In this, main focus of employees is to provide
innovative ideas to develop quality and unique products that capture customers attention.
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Organisable:
Human Resources: Each and every employee of Aston Martin is highly trained and also able to
includes or implement new and innovative technology (Chen and et. Al., 2018). This can be
assist in improving the possibilities of accomplishing all the predetermined goals and objectives
in an appropriate manner. By this, employees also understand the actual demand of customers
and at the same time also provide them better services accordingly. This can be improve overall
performance of company at market place.
M2 Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set.
Analysing internal environment is one of the important activity for business as it help in
determining strength and weakness of company. In this VRIO model is one of the effective tool
that assist in determining the internal capabilities through which organization can easily set their
strategies and also reach at final goals. Thus, it is significant for Aston Martin to analyse internal
environment before develop business strategies because it may assist in eliminating the
possibilities of arising issues in attainment of determined targets in market place.
TASK 3
P3 Porter’s Five Forces model evaluate the competitive forces of a given market sector for an
organisation
It is necessary for business organisation to analyse all the competitive forces in industry
before developing a business strategy. As it help in analysing all the aspects and forces that
directly affect the overall growth of the business at market place. For analysing this, Porter's five
forces is one of the effective model that assist in understanding the actual position of business in
market place. Mainly, it focus on the five areas that includes in the industry analysis such as
buyer's power, competitive rivalry, suppliers power, new entries in the market and threat of
substitution (Kitsios and Kamariotou, 2016). In a market place, Aston Martin is one of the
famous and renowned car manufacturing company operate in Auto-mobile sector with the aim of
increasing the possibilities of attaining competitive benefits. These factors can be understood by
following points:
 Threat of new entrants: In market place, many new companies are operating their
business for generating larger market share. In auto-mobile market, demand of electronic
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vehicles is continuously increasing and at the same time government also support the sale
of electric vehicle. This is because it help in protecting environment from the pollution by
reducing the carbon emission. As rapid grow in Auto-mobile industry, different
companies like Tesla and another companies are operating in this sector for sustaining in
market because in upcoming time entire ecosystem is going to change. This is the reason
that threat of new entrants is moderate in nature. For entering in auto-mobile market,
business are required heavy investment which is not possible for small and medium size
organisations. In addition to this, Aston Martin have advanced and sustainable
technology to operate their business in market place as it help them in improving its
overall growth in auto-mobile industry.
 Bargaining power of supplier's: In auto-mobile industry there are huge suppliers who
offer raw materials to companies. This is the reason that, suppliers of Aston Martin has
low bargaining power in market place. Due to various supplier's and high provide of
supplier's, company can switch another suppliers easily. As the main focus of company is
to purchase raw material at lower cost so that they can easily increase their profitability at
market place. If one supplier's is not agreeing to provide raw material at lower cost then
they contact with others for purchasing raw materials.
 Bargaining power of buyers: In auto-mobile industries, company offer similar kind of
products to its customers. This is the reason that company has high bargaining power as
they have huge option to buy products. In context to Aston martin, company focus in
selling different and unique products in market place in order to reduce the power of
bargaining of customers. For this, company includes innovation within their product line
as per continuous basis. This can be beneficial for improving customers experience by
providing them better services as per their needs and wants. It directly contributes in
increasing customers satisfaction that assist in attaining competitive benefits in market
place from its competitors.
 Threat of substitute products: In market of auto-mobile sector, substitution of products
are highly available as it is one of the major difficulty for company to improve its
services. In context to Aston martin, company deal in luxury products and also introduce
and launch electric car as per current demand in the market (Barbosa, de Oliveira and
Santos, 2018). This is the reason that, company do not face any kind of substitution
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products. It can be improve the positive brand presence in market place in which
company serve new and innovative products in market with the aim of generating larger
profitability level. In addition to this, company is also going plan to launch more
innovative electric cars in upcoming period of time. This can be contributes in improving
the overall performance of company at competitive market by capturing larger market
share from its competitors.
 Industry rivalry: In market place place, there are number of competitors that give huge
competition to the company while operating. As Aston martin operate in auto-mobile
industry and also sell luxury sports cars and grand tourers in market place (Yuliansyah,
Rammal and Rose, 2016). These are consider as a key segments in which company is
operating and launching their new products with the aim of generating profitability. In
this context, in luxury segment industry rivalry is high because there are number of
companies that continuously expanding their business in this sector. As there are various
competitors of Aston Martin like Jaguar, Porsche, Land Rover and many more. These
companies are giving high competition of Aston Martin. Thus, it is significant for Aston
Martin to serve something new and unique in their cars so that its customers get
influenced and attracted towards its services. This can be effective for company in
entering into new emerging market that assist tin increasing its profitability level and also
tries to compete their competitors at market place.
TASK 4
P4 Range of theories, concepts and models, interpret and devise strategic planning for a given
organisation
Strategic planning is an effective process of business that define the specific strategy,
proper direction and also make appropriate decision on allocation of resources to implement the
strategy. Along with this, strategic planning is also a tool that help company in its day to day
decision and also analyse its progress. Mainly, it provide roadmap to align entire functional
activities of company in order to attain all the set goals and objectives. With the help of
appropriate strategies, organisation also improve its competitive image at market place. In this
regards, external sand internal analysis is play a significant role in developing an appropriate
strategy because it provide opportunities to evaluate the area of market in which company can
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