Unit 32-LO1 Analyse the impact and influence which the macro environment has on an organization and its business strategies-BTEC-HND-Level 4 & 5

Course: Pearson BTEC Levels 4 and 5 Higher Nationals in Business

The macro-environment is a complex system. It includes not only the physical environment but also social and economic policies that affect an organization. The extent of this influence can be as little as creating opportunities for growth or it can be detrimental to an organization’s sustainability and survival.

The business assignment help will examine how the macro environment affects organizations today in both good ways and bad ways.

The Strategic Context:

Missions, visions, and objectives

Missions: Our mission is to provide organizations with an end-to-end Outsourced IT Services Provider.

Visions: We are the premier IT Services provider by enabling our customers with what they think of as, “A Vision of Peace”.

Objectives: To deliver high-quality services to our clients and ensure that their satisfaction is always met (Primary Goal). To be a leader in the SME space through excellent customer service, technological innovation, and teamwork by 2022.

The definition and meaning of strategy

Strategy can be defined as a plan or method of achieving one’s goals. It is the discipline of directing and deploying resources to achieve a goal. Strategy is about choices, specifically choosing what not to do in order to focus on doing the things that will have the greatest impact. The most common form of the strategy involves identifying your core capabilities and then using them to create a competitive advantage for your enterprise.

Strategy assignment help will explore how you can define strategy in an organization by looking at four principles: clarity, coherence, simplicity, and rigor. You’ll also learn about frameworks like Michael Porter’s Five Forces Analysis which help companies make decisions based on their environment and industry competitiveness factors such as competition level and the threat of substitutes.

The role of strategy to achieve business objectives and goals, strategic intent, and different strategic directions.

The role of strategy is to develop a general course for achieving the organization’s objectives. The strategy must be based upon a vision, with no specific time allocations or tactical detail: its purpose is to provide strategic direction and shape the organizational context in which tactics emerge once it has been determined that they are relevant.

The strategy seeks opportunities for an organization to create value and thus increase profitability by focusing on strengths rather than weaknesses.

There are two different strategic directions organizations can take, one called an offensive strategy, and another called a defensive strategy.

• Offensive strategies use competition’s strength against them by finding areas where their opponents are not entrenched or competitive advantages to exploit fully.
• Defensive strategies work against manufacturers in order to minimize any risk of losing market share.

Different strategic planning techniques

Different strategic planning techniques are used in different scenarios and for different purposes.

For example, if you work for an organization that manufactures and sells a singular product, your goal might be to expand the market to increase profits. In this case, your strategic plan would focus on finding a new market or introducing a new product.

If you’re launching a tech startup, your goal is probably to raise the money necessary for success through business meetings with potential investors rather than meeting face-to-face with consumers. To find success in these cases, it’s important to consider what makes your team special and tailor your strategies accordingly.

Analytical frameworks of the macro-environment:

Stakeholder analysis: stakeholder matrix, stakeholder mapping

Stakeholder mapping:

Stakeholder mapping is an organizational communication tool that is used to identify and rank stakeholder needs or expectations in a project. Stakeholders can be classified as external or internal, with varying impacts on the organization if not satisfied. Managers use stakeholder maps to help prioritize their tasks in order of importance so they have time for the most important goals first.

Stakeholder matrix :

The matrix identifies key factors about each group of stakeholders, such as identification (name and contact info, who can do what to whom). The purpose is to ensure the effective distribution of communication.  The mapping may be done manually or by using computer software. Calendar: A schedule showing the dates that different business activities should occur in order to meet a predetermined deadline.

Environmental analysis: PESTLE and Porter’s Five Forces model

The PESTLE model is an extension of the political, economic, sociological, technological, legal, and environmental factors that are used to analyze a company’s external environment. Applied to the global arena PESTLE can be used as a form of macro analysis.

Porter’s Five Forces is about understanding competitive forces within industries and their effect on profitability in that industry.

The “Five Forces” are

(1) Bargaining power of suppliers

(2) Bargaining power of customers

(3) Threats from new entrants into the market

(4) Threats from substitutes for products they sell

(5) Competitive rivalry amongst companies making similar products/services.

Structure-conduct-performance model

The structural-conduct-performance (SCP) model is a framework for understanding how best to engage in development activities that result in institutional strengthening.

SCP breaks down the process into three elements:

• Intangible – The invisible, internal capacities that enable an institution or organization to adapt and respond to changes in its environment.
• Structural -The tangible, visible features of an institution’s operational system. This includes education curricula, governance structures, physical structures like buildings or labs; and organizational policies and procedures; as well as the processes by which these features are inserted into practice.
• Performance – The observable outcomes of development interventions. These include test scores on reading comprehension exams for 3rd graders.

Strategic positioning: Ansoff’s growth vector matrix.

The four planes of Ansoff’s Growth Matrix are defined as follows:

1. Elements required for internal needs (needs for demand products, which is the company policy where the company sells its own products);
2. The strategy of prevention to protect existing markets and investments;
3. Expansion in our entry into new markets;
4. Diversification or institutionalization.

Organizational audit: SWOT analysis, benchmarking indicators

It is customary to undertake a SWOT analysis for an organization so as to identify the Strengths, Weaknesses, Opportunities, and Threats that it may face in its environment.

This leads naturally to other related sets of analysis that can be undertaken at this stage, such as Benchmarks of different types of indicators (financial) for any particular type of business or profession.

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