Business Strategy Report: Macro Environment and Internal Analysis

This report provides a comprehensive analysis of Aston Martin's business strategy. It begins with an introduction to business strategy and its importance, followed by an application of frameworks to analyze the macro environment, including PESTLE and Porter's Diamond Model, and stakeholder analysis. The report then delves into the internal environment, utilizing Porter's Value Chain model and McKinsey's 7S framework to assess resources and capabilities. Finally, it applies Porter's Five Forces model to evaluate competitive market forces and concludes with a discussion of strategic planning concepts and models for the organization. The analysis covers various aspects of Aston Martin's operations, from its mission and objectives to its financial performance and competitive positioning, offering insights into the company's strategic approach and challenges.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1. Application of frameworks for analysing influences and impacts that macro environment
have on business and strategies....................................................................................................1
LO 2.................................................................................................................................................5
P2, Analysis of internal environment addition to capabilities with suitable framework.............5
LO3................................................................................................................................................10
P3. Application of Porter's Five forces model for evaluating competitive market forces.........10
LO 4...............................................................................................................................................13
P4. Application of concepts and models as well as devising strategic plan for organisation....13
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Business strategy is said to set of actions assisting managers to attain particular objectives
(Agarwal, 2014). It is a master plan implemented by institutional managers for carry forwarding
operations, achieving desired ends as well as securing position in competitive market. Business
strategies are designed for meeting challenges, achieving effectiveness, gaining command on
critical situations, mobilising resources, directing efforts, perceiving as well as utilising
opportunities together with securing advantageous positions. It is considered as backbone of any
enterprise as it acts as roadmap to lead towards desired objectives. The present report covers
application of frameworks to analyse the impacts as well as influence of macro environment of
entity and its strategies. The report further includes analyse of internal environment as well as
capabilities of selected firm with appropriate frameworks. Further, Porters-five-forces model is
applied for evaluating competitive forces with market. At last, range of theories and models are
applied for selected organisation.
To understand the aspects of Business strategy, Aston martin is selected. The enterprise
was established in 1913 and has headquarters at England, united Kingdom (Aston Martin. 2019.).
It is one of the large enterprise which is independent manufacturer of grand tourers as well as
luxury sports car. The company provided employment to more than 3400 individuals. The vision
of entity is The company has mission of simply becoming best in every area of the business.
Objectives of the entity is to design luxurious products with modern elegance as well as style.
From the annual reports of 2017, it is said that the company has sold around 5117 sports cars
across world (Sales figures of Aston martin. 2019). The company has generated revenue of
£1,096.5 million and operating income of £146.9 million in the year 2018.
LO 1
P1. Application of frameworks for analysing influences and impacts that macro environment
have on business and strategies.
Introduction: Business strategy can be defined as competitive moves or actions that are
used to attracts customers, strengthening the business performance and compete successful in
order to make higher profits. The main object of business strategy is to develop the business and
gain competitive advantages. The task will cover some points such as PESTLE framework that
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affects the businesses, Porter's Diamond Model to select the best strategy and stake holder
analysis that affects external stakeholders.
Business strategy: Business strategy is used to know the summary that how a company
will achieve its goals, meet with customer's satisfactions and sustain the competitive advantages
by spouting a business.
According to Alfred D Chandler, (1962) author of Strategy and Structure, pp13
“Strategy is the finding of basic long term goals and objectives of an industry and the
adoption of courses of action and proper allocation of resources for the purpose of accomplishing
goals.”
According to William F Glueck, (1972) author of An invitation of strategic management
Strategy is a unified, comprehensive and integrated plan which is design to assure the
common objectives of an organisation are achieved (Burlton, 2015).
Difference between both
Definition provided by Alfred D Chandler says that strategy is used to allocate the proper
resources, take corrective actions in order to determine the long term goals of organisation.
Where as William F Glueck says strategy is integrated plan which is prepared to attain the
business goals and objectives.
Similarities
According to both author strategy is a wider term used to focus on organisational
objectives whether short term or long term. It helps to attain the higher profits by comparing with
other organisation and develop the plans accordingly.
PESTLE analysis: This analysis is used to evaluate the external environment in order to
run a business. The PESTLE analysis of Aston Martin helps to know the which factor can affect
the organisation in UK. The details of analysis in context to UK country given as:
Political: This factor states that how UK's government intervenes in economy and affect
the business. It can include political stability, foreign trade policy, labour law, trade restrictions
and so on which impacts on Aston Martin such as:
Positive impact: Political stability of UK is beneficial for Aston Martin as it can run its
business by following stable government policy that helps to operate a business successfully.
Moreover, growth of such organisation can be sustain in UK because there is no need to accept
the changes which can divert the business activities.
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Negative impact: Changes in foreign trade policy in UK country affects the negatively.
This may impact on Aston Martin or manufacturing industry in UK as their performance
performance effected negatively because company has to understand new foreign trade policy
that can reduce the productivity of organisation as well as need to provide the training to its staff.
Economical: This factor involves interest rates, economic growth, exchange rate,
disposable income of consumers and interest rates in UK country. This factor may impact on
Aston Martin organisation such as:
Positive impact: This factor may impacts positively such as low interest rate helps to
increase the production in UK because companies can get loan at low interest rate and
manufacture the products effectively (Cavusgil and et. al., 2014).
Negative impact: High inflation rate can affects the UK and Aston Martin negatively as it
has to pay high prices in order to buy raw material and other parts which reduces the productivity
and well as number of customers because it increases the prices of sports cars which customers
do not agree to pay.
Social: This factor is related to society and changing demand of customers that need to
follow by organisation for growing their business. It covers population growth, heath
consciousness, age distribution, change in demand of customers and so on within the UK, whose
are impacting on Aston Martin in UK such as:
Positive impact: Population growth such as birth rate in UK is a good indicator for Aston
Martin as it develop the future demand towards its products which affects business positively.
Negative impact: Different attitude and demand of people may reduce the sale of Aston
Martin in case of not analysing attitude and behaviour of people who are in UK country.
Technological: This is related with technological landscape changes in UK that can
affect the business performance. It includes new technology for producing goods and services,
distributing goods and services in new way and communicating with target market that impacts
on business:
Positive impact: To bring new technology by understanding customer's wants can be
beneficial for Aston Martin as it can crack the competition and helps to grow the UK's economy.
Negative impact: If country and management of Aston Martin are not up to date then
other organisation can grab the opportunity which can effect business performance negatively.
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Legal: It includes health and safety rules, consumer rights and other laws in UK country
that affects organisation such as:
Positive impact: By following health and safety rules and minimum wages act Aston
Martin can retain the employees for long term in UK.
Negative impact: If UK's organisation not follows legal rules and legislation then
employees can leave the organisation which impacts negatively.
Environmental: This factor is related with environmental factor in UK such as carbon
effect, pollution etc. which can impact on Aston Martin such as:
Positive impact: By following environment safety law and reducing the carbon emission
it can grow good environmental effect in UK country and helps business organisation to continue
their business positively.
Negative impact: In case of not following environmental law it can be out from business
industry.
Porter Diamond Model: This model is used by Aston Martin in order to gain
competitive advantages that are as defined:
Factor condition: It consider different types of resources which may or may not present
in nation (Cavusgil and et. al., 2014). In UK, there are all resources such as human resources,
capital, natural, infrastructure and knowledge that helps Aston Martin to compare with
organisation and gain competitive advantages.
Demand condition: It consider market size, growth rate and market sophistication that
helps to run a business successfully. The market size and growth rate of UK is high that helps
Aston Martin to run a business by innovating ideas and get benefits. This helps to run a business
successfully.
Relating and supporting industry: Aston Martin manufacture cars in UK that can share
access to wind tunnel which helps to create competitive advantages. This used different types of
technology to produce the products and which can attracts customers more.
Firm strategy, structure and rivalry: It is related with UK's strategy, structure and
competitors that helps Aston Martin to eliminate the competitors by developing attractive
strategy and structure in order to gain competitive advantages. In business industry, Aston
Martin has many competitor such as Tesla, Toyota, Bentley Motors etc. who are running their
business in competitive environment.
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a) Stakeholder analysis: This is a project management tool which is used to determine the
actions which are necessary to attain business goals. This Matrix is used by Aston Martin to
analyse the effects of share holders such as:
Competitors: In UK, there are many competitor of Aston Martin such as BMW,Jaguar,
Mercedes- Benz etc. who can be barrier to attain the business goals as they are also providing
same products.
Suppliers: In UK, suppliers has high involvement such as they provide raw material and
important information to Aston Martin which helps to gain competitive advantages.
Customers: It is also external stakeholders who buys products from organisation and
increases the productivity as well as profitability of Aston Martin.
b) PESTLE analysis and Porter's Diamond model is are helpful for Aston Martin such as
by suing PESTLE it can analyse which factor can impact business organisation so, it can be
control. Moreover, by using Porter's Diamond model respective company gain competitive
advantages.
Conclusion:
From the LO1 it can be concluded that strategies are the important that helps to attain the
business goals effectively. PESTLE states which factor can affect business organisation and
Porter Diamond model states how Aston Martin can get competitive advantages that helps to run
a business nationally.
LO 2
P2, Analysis of internal environment addition to capabilities with suitable framework.
Introduction: Internal environment involves events, culture, factors addition to members
that has potentiality to influence organisational decisions. It includes elements which are present
within organisational boundaries. The task discusses about internal environment, capabilities as
well as resources. Techniques such as Porter’s Value Chain model and McKinsey’s 7S
framework are used to analyse internal environment of Aston Martin.
Internal environment: Internal environment is defined as constituent of business
environment that is composed of many elements which are present inside institution and results
in impacts on choices, activities addition to decision making (Internal environment. 2019).
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Internal environment of Aston Martin is composed of members, culture, management practices,
machines, work procedures and working climate.
Resources: Resources are defined as valuable together with valuable possessions which
are available for usage within production procedures. Key resources that an entity has are capital
resources, raw materials, human resources as well as monetary resources. All the resources are
combined at selected institution for designing finished car.
Capabilities: Capabilities are said to ability or potentiality to perform as well as choose
way to achieve certain outcomes. In other words, the set of tasks which a system is able to work
at certain level of performance.
Techniques to analyse internal environment
Porter's value chain model: The model was devised by Michael Porter in 1985. the
model emphasis on activities as well as systems linked with customers as central principle
despite on departments or accounting expense categories. To examine internal environment,
Strategic Planning Manager of Aston Martin uses the framework for detailed analyses of
activities (Porter's value chain analysis. 2019). There are primary activities and supporting
activities that are as follows:
Illustration 1: Porter's value chain analysis. 2019
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(Source: Porter's value chain analysis. 2019)
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Primary activities: The activities which have immediate effect on sales, production,
support and maintenance of products as well as services that are to be supplied are primary
activities. Following elements are are part of primary activities of selected firm:
Inbound logistics: It includes transportation, storage as well as delivery of commodities
coming into business. All the procedures involved in bringing raw materials, storing in
warehouses and internal distribution are performed under such element. Such element is strong
within Aston Martin as the company carefully handles materials, schedules vehicles, control
inventory as well as returns to suppliers.
Operations: The conversion of raw materials into final product is functions by operations.
Such system acts as guiding principle for value creation (Chen and Jermias, 2014). The system is
also strong within Aston Martin as managers effectively maintains equipments,assembly cars and
facility operations for making sports cars from the raw materials.
Outbound logistics: When outputs are finished as well as ready to send then value chains
moves towards outbound logistics areas where goods goes out of business. At Aston martin, the
element is weak as various time Outbound logistics activities are not carried out on set time that
further fails to deliver demanded cars to customers.
Marketing and sales: Activities associated with putting products in the market and
generating customer relationships falls under such element. The activity that needs more focus
are communication, promotions as well as marketing to increase sales. The element is weak in
Aston Martin as marketing activities including promotions are not done in right manner and
various times delivers false commitments to customers that reduces values of end sports car.
Service: It is related to after sale service that includes all activities which maintains
products value to clients while developing relationships as per the procurements of products.
The management of Aston Martin uses this element strongly as company has various staff
members that satisfies grievances of unsatisfied customers.
Support activities: The elements involved in such activities generally assist primary
activities so to gain beneficiary advantages. The elements with support activities are connected
with Aston Martin that are as elaborated:
Procurement: The function to acquire inputs that are used in value chain of business are
said to procurement. The inputs that are purchased by Aston martin are laboratory equipments,
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raw materials, machines, buildings along with office equipments. The company has strong
procurement function as they manages vendors as well as procure resources at the time needed.
Technological development: Such elements creates values by using optimization along
with innovation. Aston martin manufactures their cars as per the technological innovations and
new technologies which states that the element is strong.
Human resource management: It has relevancy with workforce development. Managers
of Aston Martin places competent person at right position that shows that the element is strong as
management never takes human resource as granted (Cooper, 2017). Recruiting team brings as
well as trains talented candidate that further provides huge benefits to entity.
Firm infrastructure: The concerns of such element are related to maintaining daily
activities or operations within business. The element is strong in Aston Martin as proper
activities are delegated with line management, financial management addition to administrative
handling that performs the operations effectively.
Hence, Aston Martin is benefited by Porter's five force model as it ensures values which
are created by exceeding costs, gives competitive edge and improves production capacity. In
contrary, evaluation of the analysis is lengthy approach and it loses overall strategy of business
various times.
McKinsey's 7s framework: It framework is used to analyse organisational effectiveness
as well as capabilities through seven elements. It reviews capabilities of business, determine the
ways to best realign new strategic direction and assess changes that are required to support
digital organisational transformation (McKinsey's 7s framework. 2018). The 7 elements in
relevance with Aston martin are as described:
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Illustration 2: McKinsey's 7s framework. 2018
(Source: McKinsey's 7s framework. 2018)
Strategy: The plan framed by entity for gaining sustained advantages as well as
successfully competing with other firms in market are said to strategy. The managers of Aston
martin emphasis more on product development strategy in which they launches various
variations of luxury cars addition to grand tourers. The firm has strength in this element as
strategies benefits in achieving set objectives effectively.
Structure: The another element that helps managers of entity to handle all operations.
Hierarchical structure is followed at workplaces of Aston Martin that leads towards proper
communication. It is also strong element at chosen premise as it outlines the authority
responsibility relationship at workplace.
Systems: It defines the ways job gets done. It helps in keeping business operating as well
as moving forward. Existing management team of Aston martin has more emphasis on marketing
systems together with managing human resources as to acquire growth.
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Skills: It is associated with skills of employees as well as that of business. Organisational
core competence along with distinctive capabilities are skills (Fox, 2012). At selected form,
managers emphasis on decision making skills, problem solving skills, learning skills, self
management skills and technological skills as all these helps in accomplishment of
predetermined objectives in set duration.
Shared values: Standards, values and ethics set by managers to provide direction to
personnels so that they can perform critical operations are categorised within shared values. The
element is strong at chosen institution as it stretches and creates feeling of camaraderie as well as
cohesiveness among employees.
Style: The ways operations are managed, influences performances, interacts and takes
actions to lead the company are said to style. Management team within the firm focuses on
participative and democratic styles so to provide supervision for implementing strategic
decisions.
Staff: The element is linked with number of personnels needed at workplace and the ways
they will be hired, trained, rewarded as well as motivated. Staff element strong at designated
entity as they have huge number of productive employees that makes contributions in
organisational development.
Thus, the company attains benefits by McKinsey's 7s framework as it helps in proper
emphasis towards strategy implementation and coordination of essential tasks. It benefits in
coordination plans with managerial practices. At same time, the model misses various grained
areas that arises gaps between conception and execution of strategies.
Conclusion: As per the above discussion it is concluded that internal environment of
Aston martin is analysed through McKinsey's 7s framework as well as Porter's value chain
model. The strong and weak elements are clearly analysed with the both techniques.
LO3
P3. Application of Porter's Five forces model for evaluating competitive market forces.
Introduction: Industry is said to group of businesses which manufacturers or produces
specific type of commodities or services. The task covers information about industry as well as
usage of Porter's five forces model for analysing impact which industrial environment have on
firm.
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