Business Strategy Report: Macro Environment and JLR Analysis

This report provides a comprehensive analysis of Jaguar Land Rover's business strategy. It begins with an introduction to business strategy and its importance, followed by an overview of Jaguar Land Rover. The report then delves into the impact of the macro environment on JLR using PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors. It assesses the company's internal environment and capabilities through SWOT and VRIO analyses, highlighting strengths, weaknesses, opportunities, and threats, as well as the value, rarity, imitability, and organization of its resources. The report also evaluates competitive forces using Porter's Five Forces model. Finally, it discusses the application of these analyses to devise strategic planning for Jaguar Land Rover, concluding with recommendations for future strategic directions. The report emphasizes the need for the company to adapt to changing market conditions and leverage its strengths to maintain a competitive advantage in the automotive industry.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Impact and Influence of Macro environment on Jaguar Land Rover.........................................1
TASK 2............................................................................................................................................4
Analysis of Internal Environment and Capabilities....................................................................4
TASK 3............................................................................................................................................7
Evaluation of Competitive Forces for Jaguar Land Rover..........................................................7
TASK 4............................................................................................................................................8
Application of models to Devise Strategic Planning for Jaguar Land Rover.............................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business Strategy includes all the essential steps and processes adopted by an
organisation to gain a competitive edge within the marketplace as well as secure a sustainable
position within the same. Furthermore, it also makes a company capable enough to effectively
enhance its competence and level of productivity which ultimately contributes to higher
profitability (Teh and Corbitt, 2015). The following report is based on strategic direction of
Jaguar Land Rover, which is one of the most reputed organisations within the automotive
industry in United Kingdom. The report covers a detailed analysis of the impact and influence
which the macro environment has on organisation and its business strategy. Moreover, it covers
assessment of an organisation's internal environment and capabilities as well as evaluation and
application of analysis using Porter's Five Forces Model. Further, the report includes analysis of
directions available with the firm.
TASK 1
Impact and Influence of Macro environment on Jaguar Land Rover
Organisational Overview
Jaguar Land Rover is an automotive organisation which develops, manufactures as well
as design vehicles for its customers worldwide. It produces high-performance vehicles which are
made to provide customers with comfort, speed and design. Vision: Jaguar Land Rover's vision is to deliver electric, connected as well as driverless
vehicles which reshape the entire sector. Mission: To attain this vision, mission of the organisation is to to do business with
utmost integrity, understanding, excellence, unity as well as responsibility
 Objective: The firm effectively wishes to revisit and renew its strategic direction and
modify the same in relation to effectively ensure a competitive position within the
marketplace.
To attain the vision and objectives of the company which is one of the main agendas of
the organisation, it is essential for the firm to develop effective strategy which helps the firm in
achieve its company goals (Bocken and et. al., 2016). Strategy refers to a plan of action which is
developed in order to attain desired goals and objectives.
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Strategy adopted by the company plays an effective role within a firm to help attain its
objectives, goals, strategic intent and different strategic direction. This is because developing a
strategy helps a company target all those pointers which are weak and requires effective attention
of the management to help the organisation excel within the same (Taneja, Pryor and Hayek,
2016).
Furthermore, there are several strategic planning techniques which could be utilised by
the organisation in order to plan their strategies in an effective manner. For this purpose, the
company could utilise techniques like Benchmarking and Key Performance Indicators. This
would allow the firm to appropriately plan their strategies and could measure and monitor their
success in a better manner.
Macro Environment Analysis
To appropriately formulate a set strategy and effectively choose a strategic direction,
Jaguar Land Rover is required to analyse the external environment which impact the business.
For this purpose, PESTLE Analysis is being used which is a framework to outline all the external
factors which influence functions and operations of a company. In context with Jaguar Land
Rover, this analysis is discussed below:
 Political Factors:
These factors undertake all the external political factors, including political stability and
governmental interventions which have a wide impact on a company. One of the biggest factors
within the political scenario of the country, which is important for an organisation to analyse is
the political stability. In context with Jaguar Land Rover, currently after Brexit vote, the firm,
being headquartered in UK is also experiencing quite instability in terms of governmental
policies and regulations. This is quite a threat for the organisation within its home market.
However, despite the same, the firm has acquired effective government support in order to
enhance their production capacity and develop more cars each year. Furthermore, apart from UK,
the firm is enjoying political stability in all of its major market, which is further enhancing the
opportunity for the company to expand its business operations in these markets and grow
effectively (Orna, 2017).
 Economical Factors:
Such factors are associated with economical front and performance of the country in
which the firm operates in. In consideration with its existing market, after Brexit, due to
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reduction in the value of Pound, the firm is facing quite a threat as the inflation rate has shot up.
Furthermore, as per the international market scenario, the company has investments in several
prominent Asian markets, such as India and China. However, its demand recently fell in China,
which caused the firm its biggest quarterly loss of almost £3.4 Billion (Jaguar Land Rover posts
biggest quarterly loss of £3.4bn, 2019). However, reason for the same is that there is high
pressure on the market in context with the car manufacturing companies due to transition to
electric vehicles, regulatory pressure as well as Brexit uncertainty. However, seizing the
opportunity within these threats, the firm is regularly investing an effective amount within its
R&D to cope up with the changing market situation. This, it is an opportunity for the company to
appropriately invest more in R&D to keep up with the consistency of demand within national
and international markets (Saebi and Foss, 2015).
 Social Factors:
All the trends prevailing in a nation and socially emphasised pointers such as population,
preferences, etc. are taken into account in these factors. The firm performs in a dynamic business
environment and customer preferences are highly changing. Moreover, with social integration of
individuals across countries, it is an emerging need for car manufacturing companies to
effectively produce vehicles which are high on comfort, speed and safety. With more customers
emphasising on safety, it arises opportunity for the company to present their designs in ways
which promotes to the same. However, millennials across the UK as well as other international
markets are being highly preferable towards public transportation as a substitute for privately
owned vehicles due to the comfort and ease experienced by them. Thus, to convert this aspect
into opportunity, it is highly likely that the company ensure future designs which are developed
to promote comfort to millennials which develops more opportunities for the firm within the
market.
 Technological Factors:
Factors under these are related to the technological advancements and their impact on the
company and all of its operations. With enhancements in technology and its easy access within
the world, it is quite a pressure for companies operating within the automotive sector to design
and present technologically advanced vehicles that withstand the span of time and provide
sustainability to the firm. It is an opportunity for the organisation as it spends more than $3
Billion in innovation and technology, which ensure that all the vehicles produced by the
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company use high end technology (SWOT and PESTEL Analysis of 4 Automotive Companies,
2019). Furthermore, another technology which is effective for the organisation in order to
enhance opportunities within the market is is Automotive Virtual Reality testing workshop which
allows the firm to measure quality of its products at its development stages. However, as far as
Artificial Intelligence is concerned, the firm is subjected to several failed attempts for driverless
vehicles, which is a threat as various competitors like Tesla have excelled in this factor. Thus,
the firm has opportunity for presenting better and technologically developed vehicles which
could help the firm gain an effective competitive advantage within the market (Adner, 2017).
 Legal Factors:
Certain government regulations, which are essential for a company to abide by are
included within these factors. In context with the company, there are several laws like
Environmental Protection Act, 1986, which present several opportunities to organisation like
Jaguar Land Rover could produce electric vehicles which ensure effective compliance of this act.
However, with changing regulations after Brexit, the firm faces the threat of operating in an
uncertain legal environment. However, the firm must be flexible and must produce its vehicles as
per the required standards in order to convert such threat into opportunity.
 Environmental Factors:
All such factors which encompass the environmental elements and processes of its
preservation are included within this section of the PESTLE Analysis. Ongoing environmental
concerns are presenting ample opportunities for the firm as the company could effectively
develop vehicles using effective waste management systems to reduce waste during
manufacturing as well as could design electrical vehicles with low carbon footprint.
TASK 2
Analysis of Internal Environment and Capabilities
Strategic capabilities refer to the ability within a business organisation to harness its skills
as well as resources, which help them to gain a competitive edge within the country. There are
several components of strategic capabilities like several assets such as patents, cash, employees,
organisational structure, etc., help an organisation to be more competent within the market.
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The company must analyse its strengths, weaknesses, opportunities as well as threats to
ensure that it modifies its strategy to channelise on its weaknesses and reduction of threats. For
this purpose, SWOT Analysis is being used which is mentioned below:
STRENGTHS WEAKNESSES
 Effective Brand Awareness
 High investment on R&D
 Weak product ranges
 High dependency on limited models
OPPORTUNITIES THREATS
 Ongoing technological advancements
 Rising demands of environmental
friendly vehicles
 High competition in international
markets
 After effects of Brexit
However, Jaguar Land Rover, in order to effectively analyse the internal capabilities,
must utilise VRIO Analysis, which is essential for the organisation to effectively gain access to
things which could help the firm in gaining competitive advantage within the market (Prajogo,
2016). This analysis is mentioned below:
Factors Valuable Rarity Inimitable Organised Result
Pricing
Strategy
Pricing
Strategy - - - Non-
Competitive
Customer
Loyalty
Customer
Loyalty
Customer
Loyalty - - Partially
Competitive
Innovative
Capabilities
Innovative
Capabilities
Innovative
Capabilities
Innovative
Capabilities - Temporarily
Competitive
Brand
Awareness
Brand
Awareness
Brand
Awareness
Brand
Awareness
Brand
Awareness
Competitive
advantage
The VRIO Analysis of Jaguar Land Rover is mentioned below:
Valuable
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 Pricing Strategy: The firm targets high end customers for its luxury car segments, which
is valuable to the firm as with such prominent target customers, the firm could generate
higher revenues, thus, higher profitability. Customer Loyalty: Since the company has been in operation for a lot of years and has a
global presence, the organisation has a lot of customers which are loyal to the firm. It is
highly valuable as these individuals are the driving force for the organisation and its
existence. Innovative Capabilities: To ensure sustainability, it is important that a company comes
up with innovative designs and processes regularly. Thus, such capabilities to modify
designs as per the market demand is valuable for its sustainability.
 Brand Awareness: The reason as to which it is valuable is that each individual within the
market is aware of the firm's effective products and its reputation. Thus, this enhances its
likelihood of being preferred within the market.
Rare Customer Loyalty: It is not easy and sometimes not even possible for an organisation to
gain such a high level of customer loyalty as Jaguar Land Rover with such a fierce
market competition and low switching cost. Innovative Capabilities: It is quite rare for an organisation to find skilled employees with
creative and innovative abilities.
 Brand Awareness: Creation of such an effective presence and awareness requires years
of hard work and consistency in products which is quite rare within the market.
Inimitable Innovative Capabilities: Innovation requires effective skills and creativity within
employees which could not be imitated by other organisations.
 Brand Awareness: No firm could imitate the brand awareness of Jaguar Land Rover as it
requires implementation of effective strategies consistently which could not be traced and
utilised by other companies.
Organised
 Brand Awareness: The firm operates in a way which allows it to be a leading company
in several segments. Through effective use of resources and technology, Jaguar Land
Rover organises its brand awareness effectively.
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TASK 3
Evaluation of Competitive Forces for Jaguar Land Rover
It is quite important for an organisation to evaluate their competitive forces and
determine their position within their respective industry. The international automotive industry is
filled with quite effective players and forces and for Jaguar Land Rover to analyse their position,
Porter's Five Forces Analysis is being used which would help the organisation in determining its
industrial attractiveness. This model is discussed below:
 Supplier's Bargaining Power:
These are the individuals which supply the firm with raw materials to manufacture their
vehicles. As for Jaguar Land Rover, the firm has numerous suppliers which supply the company
with raw materials. Thus, with such a high number of suppliers, the firm could easily switch to
other suppliers in case a higher price is quoted by their existing ones. As per this factor, the
bargaining power with respect to the organisation turns low (Martinez-Simarro, Devece and
Llopis-Albert, 2015).
 Buyer's Bargaining Power:
These individuals are the ones which buy offerings of an organisation and are reasons for
its existence. The vehicles produced by the organisation are quite unique and exclusive which
builds the customer loyalty towards the firm despite its price ranges. This reduces the bargaining
power of buyers. However, similar features could be found in other vehicles of the same level
and thus, switching cost is quite low for buyers, thus, enhancing their bargaining power. Thus,
these aspects makes their bargaining power moderate for the organisation.
 Threat of Substitutes:
These refer to the products or services which could be used in place of the firm's
offerings. Within the current business environment, there are changing preferences of customers
which influence the products of organisation. With respect to Jaguar Land Rover, millennials are
changing their interests and preferences on public transportation as it provides them ease, safety
and comfort. Such high preference is rising the threat of substitute for the company within its
national and international market.
 Threat of New Entrants:
Within the automotive industry, it takes a lot of investment and a strong supplier network
to enter amongst already established organisations with massive market share. Thus, this factor
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reduces this threat for the organisation (Torrent-Sellens, 2015). However, new companies which
manage to enter the industry are focusing on producing technologically advanced as well as
environmental friendly products within the marketplace. This rises the threat level of new
entrants for Jaguar Land Rover. Thus, this threat is moderate in context of this organisation.
 Competitive Rivalry:
There are various organisations which are already established within the market and have
effective market share globally. For instance, companies like Volkswagen, Ford and General
Motors are prominent competition of the firm within its local market. However, internationally,
with focus more on technology, companies like Tesla, BMW and Mercedes-Benz are effective
competitors for Jaguar Land Rover. Thus, this threat is high for the company (Eaton and Kilby,
2015).
TASK 4
Application of models to Devise Strategic Planning for Jaguar Land Rover
After analysis of its position within the industry, it is evident that Jaguar Land Rover
must devise new strategies and ensure new strategic direction in order to improve their
competitive position within the market. Thus, for the same, it is very crucial for the firm to apply
Porter's Generic Strategies, which would allow the company in analysing new strategies to
ensure an effective market position in the future.
 Cost Leadership Strategy:
One the strategies lined up under this model is this strategy where emphasis of the
organisation is on the reduction of pricing in a way which provides it a competitive edge within
the market. There are two ways through which Jaguar Land Rover could implement the same.
For instance, it could enhance their profits by reduction of costs and charge average pricing as
per the industrial pricing on their products. Another way in which they could implement the
same is by reducing the price of their offerings and enhance their market share, along with
earning effective profit per sale as costs are reduced. Through this, Jaguar Land Rover could gain
an effective advantage through reduction of pricing.
 Differentiation Strategy:
Under this strategy, the firm would be differentiating its products from their competitors
in terms of features, functionality, support, durability and designs. Through this, the agenda of
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the company is to attract customers by its different and unique features which they would not
find in vehicles of other companies (Chang, 2016).
 Focus Strategy:
Companies follow this strategy in order to concentrate on their niche markets and unique
demands of customers within them. It is further divided into two strategies based on demands of
customers. Either the firm primarily focuses on reducing the cost or primarily on differentiating.
Through this, Jaguar Land Rover could intend to enhance brand loyalty and further engagement
of customers (Thompson, Strickland and Gamble, 2015).
Out of the three strategies above, the firm must utilise Differentiation as its strategy and
produce its offerings different from that of their competitors within the market. The reason why
this strategy would be chosen is that within cost leadership, it might happen that other companies
might copy their strategy. Moreover, focus strategies would reduce the flexibility in strategies
which might be disadvantageous for the organisation. Thus, differentiation is the direction in
which the firm must head onto.
Strategic Management Plan: Aim: Jaguar Land Rover's aim is to appropriately develop technologically advanced and
reliable vehicles in order for the company to expand in new markets. Objectives: The firm effectively wishes to revisit and renew its strategic direction and
modify the same in relation to effectively ensure a competitive position within the
marketplace. Values: The value system of the firm is quite appropriate as it values integrity and
consistency quite high within the company and while producing its products and services.
In addition to this, the firm treats its employees as its backbone and focus on keeping
them engaged and create a productive work environment for growth of the company.
 Tactics and Strategies: As for tactics, Jaguar Land Rover must effectively operate in
relation to enhancing its R&D and Manufacturing division so that the company could
apply its long term strategies effectively. For strategies, the company must implement
Differentiation as its strategy in order to produce effective offerings and gain better
market position within the future (Scholes, 2015).
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CONCLUSION
Thus, it is concluded from the report above, that business strategy must effectively be
analysed and implemented within an organisation to provide them effective and sustainable
pathway. PESTLE Analysis must be utilised by companies to analyse external environments. In
addition, for internal analysis and capabilities, firms must use SWOT and VRIO Analysis.
Furthermore, Porter's Five Forces Analysis could be used by organisations to analyse its
competitive position. Lastly, Porter's Generic Strategies could help the organisation to analyse
and choose an effective strategic direction for themselves.
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REFERENCES
Books and Journals
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Management. 43(1). pp.39-58.
Bocken, N. M. and et. al., 2016. Product design and business model strategies for a circular
economy. Journal of Industrial and Production Engineering. 33(5). pp.308-320.
Chang, J.F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
Eaton, D. and Kilby, G., 2015. Does Your Organizational Culture Support Your Business
Strategy?. The Journal for Quality and Participation. 37(4). p.4.
Martinez-Simarro, D., Devece, C. and Llopis-Albert, C., 2015. How information systems
strategy moderates the relationship between business strategy and performance. Journal
of business research. 68(7). pp.1592-1594.
Orna, E., 2017. Information strategy in practice. Routledge.
Prajogo, D. I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics. 171.
pp.241-249.
Saebi, T. and Foss, N. J., 2015. Business models for open innovation: Matching heterogeneous
open innovation strategies with business model dimensions. European Management
Journal. 33(3). pp.201-213.
Scholes, M.S., 2015. Taxes and business strategy. Prentice Hall.
Taneja, S., Pryor, M.G. and Hayek, M., 2016. Leaping innovation barriers to small business
longevity. Journal of Business Strategy. 37(3). pp.44-51.
Teh, D. and Corbitt, B., 2015. Building sustainability strategy in business. Journal of Business
Strategy. 36(6). pp.39-46.
Thompson, A., Strickland, A.J. and Gamble, J., 2015. Crafting and executing strategy: Concepts
and readings. McGraw-Hill Education.
Torrent-Sellens, J., 2015. Knowledge products and network externalities: Implications for the
business strategy. Journal of the Knowledge Economy. 6(1). pp.138-156.
Online
Jaguar Land Rover posts biggest quarterly loss of £3.4bn. 2019. [Online] Available Through:
<https://www.theguardian.com/business/2019/feb/07/jaguar-land-rover-posts-biggest-
quarterly-loss>
SWOT and PESTEL Analysis of 4 Automotive Companies. 2019. [Online] Available Through:
<https://www.ukessays.com/services/example-essays/marketing/automotive-swot-
pestel.php#jlr-pestel>
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