Business Strategy Assignment

Business Strategy Assignment

Executive summary

This report will cover the influence and impact of strategic planning on business with complete analysis. The factors of micro as well as macro environment will be evaluated along with the application of different models and theories which can be beneficial for companies such as Primark to improve its strategic business planning process. A recommendation will also be provided based on the analysis that will be made.

Introduction

Business Strategy refers to the decisions that are taken for performing the tasks as per the requirements to meet the business goals. This report will give a brief description of the influence and impact of macro-environmental factors on the strategies that are set on an organisation. A proper assessment will also be done on the business capability and internal-environment factors. Specific theories and models will be provided for analysing the outcomes for understanding the context of business development that are available. Recommendations will also be provided for providing proper business strategy ideas to companies like Primark.

LO1

P1 Applying appropriate frameworks analyse the impact and influence of the macro-environment on a given organisation and its strategies.

Importance of macro environments

The macro business environment has been able to influence the business growth of the organisations of the country. As opined by ?epel et al. (2018), the analysis of the external environment helps the organisations understand the implementation of appropriate strategies. Organisational development is the aspect of gathering better consumer attention in the market. On the other hand, Zainudin et al. (2020) stated that the evaluation of the macro environment will be able to help the organisations determine the operational strategies.

PESTEL framework

Elements	Factors
Political	The decision of Brexit in the country Changes of laws because of the COVID breakout
Economic	Rise of the inflation rate Low employment rate Stagnant economic growth for COVID 19 outbreak
Social	Implementation of social trends Implementation of country culture
Technological	Rise of technology at the time of the lockdown The negative impact of being technologically incapable in the market
Legal	Employee act of the government Wages act enforced by the government
Environmental	Implementation of the environmental approach of the organisations Implementing environmental sustainability in the organisational operations

Table 1: Macro environmental factors

(Source: Influenced by Shtal et al., 2018 )

Analysis:

The evaluation of the external or macro environments in the organisations will be able to help to gather a better knowledge of the current scenario. The different external factors have been able to influence the gathering of the revenue of the business organisations. Following are the development and challenges that the organisations are able to get because of the influence of the external environments.

Political: The political aspects have been able to determine the organisational strategies as it is directly linked to governmental operations. The management of the organisation Primark has been implementing changes in the organisational strategies on the basis of the changes in the political decisions of the country. As observed in a report by Theguardian.com (2021), the government of the country possesses an optimistic outlook in the implementation of Brexit in the country. However, it can be stated that the business organisations in the market have been observing the most adverse effects of the same. The development of the organisations has been facing stagnancy because of the changes in the government riles and wages. It is also observed that the organisations in the market have faced even more challenges because of the sudden outbreak of COVID 19 in the country. The spread of the virus has caused a huge change in the operations of retail organisations. The organisations were compelled to work with a reduced number of employees to reduce the chances of spreading the virus. All of these changes are the implications of the changes in the revenue of the business organisations of the country.

Economic: The economy of the country is the determiner of the earned revenue of the business organisations. The organisations that operate in the retail market of the country have been able to face the challenges because of the change in the economy because of COVID 19. The development of the organisations is hampered because of the economic downfall of the country. It can be stated that the organisations have been harmed because of the decision of Brexit. However, the outbreak of the COVID 19 has been changed the course of the revenue earning of the organisations. As per the report by Statista.com (2020), the country has observed the maximum number of store closure and job losses in 2020 because of the sudden outbreak of the COVID 19.

Figure 1: Job losses in the UK because of COVID

(Source: Statista.com, 2020)

The figure above is the depiction of the store closures of the organisations in the United Kingdom because of the outbreak of the COVID 19. Primark will be able to gather benefits with the evaluation of the economic factors of the country. The organisation has to implement appropriate strategies to keep the organisational growth intact. The management of the revenue will be able to help the organisation a proper strategy to avoid the challenges because of the economic condition of the country.

Social: The implementation of the social trends in the business organisations has been able to help to gather better employee efficiency for the organisations. The management of business organisations has to determine the organisational strategies in favour of the employees of the organisations. It can be stated that Primark has been able to provide the employees with a comfortable working atmosphere with the help of the implementation of appropriate strategies.

Technological: The implementation of the technological aspects of the organisations will be able to gather better operations in the same. The management of the tasks will be easier in organisations. For instance, it can be stated that organisations like Primark have been able to implement the technical aspects of the operations. With the help of the implementation of the technology in the operations, the organisation will be able to gather optimisation in the workflow.

Legal: abiding by the legal aspect of the country, the business organisations are able to maintain a clean background. The gathering of customer trust will be easier with the implementation of the government-enforced laws in the organisational methods. The implementation of the employee and wages act of the government will be helpful for the gathering of employee satisfaction. Primark has been able t gather employee satisfaction with the help of the implementation of the lawful practices in the organisation.

Environmental: The organisations, which keep the environmental approach in the operations, will be able to gather consumer attractions. The awareness of environmental sustainability is prevalent in consumers. As observed in a study by Bbc.co.uk (2021), the implementation of the environmental aspects in the operations will be helpful for the gathering of consumer attractions. The consumers who are interested in buying eco-friendly products will be attracted to the organisations that implement the environmental approach. For instance, it can be stated that organisations like Primark deal in the retail market of the country. The process of buying and selling of the materials include a lot of usage of plastic. The implementation of the environmental aspect and reduction of the usage of plastic will be able to gather better consumer attraction. Moreover, the investors who are interested in investing in philanthropic projects will be attracted towards the organisations, which look out for the sustainability of the environment.

LO2

P2 Analyse the internal environment and capabilities of a given organisation using appropriate frameworks

SWOT analysis

Strengths Good employee retention rate The strong presence of business Availability of a wide range of products	Weaknesses Slow economic growth Product quality inconsistencies
Opportunities Brand image Availability of unique products	Threats High competition in the market Low sales growth

Table 2: SWOT analysis

Strengths

• Good employee retention rate

The employee retention rate of Primark is good due to the availability of high-quality products at affordable and flexible rates (Primark.com, 2021).

• The strong presence of business

The presence of business across the country and in foreign countries contributes to its strengths. The development of the business in the overseas market enhanced the development of products and improved the profit in the business.

• Availability of a wide range of products

Primark develops a wide range of products, which are purchased by the customers more often. The presence of wide-range of products makes this company unique in the market and increases the customer retention rate.

Weaknesses

• Slow economic growth

The slow growth of the economy reduces the business growth rate.

• Product quality inconsistencies

The high-quality products are not sold at a consistent level, which makes it difficult for the customers to purchase the products in a continuous form.

Opportunities

• Brand image

The brand image of Primark improves the customer’s retention rate and helps the organization to gain the trust of the people (retail detail.EU, 2019).

• Availability of unique products

The availability of unique products in the markets acts as a major opportunity for this company. Customers get attracted to buy the new product, which is introduced in the markets, and hence the competitive rivalry is reduced. Based on the reviews of the

Threats

• High competition in the market

The main threat to this company is the presence of leading alternative stores, which offer the same products at affordable rates.

• Low sales growth

Low sales growth due to inconsistency of the product delivery also acts as a threat to Primark (retaildetail.EU, 2020).

VRIO Analysis

Capability or resource availability	Valuable	Rare	Imitability	Organization
Strong product presence across the country as well as overseas	Yes	Yes	Yes	Yes
Availability of wide product range	Yes	No	No	Yes
Good employee retention rate	Yes	Yes	No	Yes

Table 3: VRIO analysis

Impact on competitive advantage

The strong presence of products in the market is valuable for Primark and it can improve the business growth and increase the profit rate. Availability of a wide range of products is also valuable for the company as it reduces the competitive threat, which is faced in the market. Imitability of this is rare, as any company cannot develop a large number of products with high quality immediately (Primark.com, 2021). The good employee retention rate is also a unique feature of this organization, which enhances the brand image and improves the business growth by reducing the competition level.

LO3

P3 Applying Porter's Five Forces model evaluates the competitive forces of a given market sector for an organisation.

‘Porter’s five forces’ can be used for analysing the business competitiveness and also helps in identifying the potential business strategy for increasing the profit. This model helps companies like Primark to understand the factors and forces that can improve the business.

Figure 1: Porter’s five forces model

(Source: visual-paradigm.com, 2019)

There are few categories in which this model helps in identifying the forces as given below-

• Competitive Rivalry

Competitive rivalry refers to the competition in the market from the alternatives that act as a threat to the business. The rivalry among the business helps in determining the quality of the products that are developed and further helps companies to attract more customers with aggressive cuts in the pricing of products (visual-paradigm.com, 2019). Companies like Primark try to attract their customers by lowering the price of the products and sell high-quality products at discounts. Defining the uniqueness of the business by introducing new products and enhancing the delivery services by increasing customer satisfaction also helps Primark to reduce the competitive rivalry rate.

The main competitors of Primark are namely, Marks and Spencer's (M&S), select Fashion, and Crew Clothing (owler.com, 2021). Competitive rivalry is high for Primark due to the presence of the best alternatives in the market and the presence of similar products at affordable rates in the other retail and food stores. Competitors of similar size in the market give this company a huge competition and this can be reduced with the introduction of unique services and products with latest features for attracting the customers.

• Buyer power

Buyer power refers to the power that is in the hands of the customers for imprv9ng the business flow rate and helps in determining its success. The target audiences for selling the particular products and services are first decided and their numbers are noted. Proper analysis of the processes is done where the conditions and demands of the customers are given more preference. More customers more are buyer power which enhances the growth of the business. The customer base of companies such as Primark is more as the services and the products are delivered not only inside the country but overseas too (Primark.com, 2021).

Primark plans certain strategies for enhancing the business that helps in decreasing the pressure that is caused by the leading competitors in the market. The bargaining power of the customers is relatively high, depending on which the price of the products is set and discounts are provided in this company.

• Supplier power

Supplier power refers to the power of selling a particular product or service to the customers that determine the profit or loss rate in the business. The suppliers earn a lot of profit by selling unique products at affordable rates to the customers. Depending on the customer base and the demand for a product or service, the price is set. Companies like Primark benefit from this process based on the large customer base, which the company has both across the country and overseas as well (reutersevents.com, 2019). The demand for raw materials is increasing for this company due to the rise in product sales.

However, due to the rise in new supplier’s rate in the market delivering the same services, Primark faces a bit lower low-cost switching rate that further increased the purchasing power of products over the tough competitors in the market. The business growth rate also improved and hence this factor is given more priority.

• Substitution threat

The substitution threat, as the name suggests, refers to the threat, which any company faces from the alternatives in the market. The threat of substitution is managed by altering the price of the products depending on the demands of the customers and the availability of resources for the development of products and services. Customers often prefer to purchase low-price products for their daily-use and prefer high-quality products only when the company already has a good customer-retention rate.

The risk and threat from alternatives are low for Primark due to its brand image and business presence (Rogers, 2020). A large number of customers prefer to purchase products from this store instead of the other stores, due to the uniqueness of the products and the high-quality services, which are offered in Primark. The increase in the switching cost also enhances the business growth rate that decreases the threat from the other substitutes in the market.

• Threat from New-entry

Threat from new entrants is often observed in the market where many new stores provide unique and new products in the market. Depending on the allowance of the government, the threat of new entry can be analyzed for the markets in a particular region. Companies such as Primark improved their brand image and also built the customer retention rate so high that the threat from new entries is very less for this company (Primark.com, 2021). Setting up a new base and gaining the attention of the customers is a long process and hence new entries can only be a threat when there is the availability of unique products and the service delivery is pleasing to the customers. The presence of business of Primark all over the country and in foreign markets enhances the customer base and further reduces the threat from the new entries in the market.

LO4

P4 Applying a range of theories, concepts, and models, interpret and devise strategic planning for a given organisation.

Several theories and models can be utilized for analysing the strategic business planning process in organizations. Some of the theories and models, which are relevant for enhancing the business strategy of retail companies like Primark, are as follows-

• The goal-based strategic planning model

This model refers to the process of setting up a proper strategy for doing the tasks, which are assigned in order to achieve the organizational goals. This model is designed for enhancing the business by setting certain targets that are achieved within a particular time. The strategic planning process does not need to be completed within a year or within a month. Long-term goals can be set with proper planning, done in a strategic manner by the management team. Companies such as Primark follow the process of strategic planning by making a properly organized structure about the things that need to be completed.

The self-business analysis is done to understand the strengths and weaknesses and accordingly, steps are taken for achieving the organizational goals( Marley and Swait, 2017). The design of the structure is then done based on the analysis and accordingly, the roles of each member are assigned. The operational plan is also designed for making the tasks more clear to the employees so that they can understand their roles better and perform accordingly to achieve the organizational objectives. The plan, which is made, is then evaluated and checked for ensuring whether all the points are covered or not. Therefore, it can be stated that this type of business is beneficial for enhancing the product growth rate and the delivery of services across the country as well as in foreign countries.

• Scenario-strategic planning model

This model type is based on the practice of understanding the strategic planning process depending on the scenarios in which the tasks can be analyzed. This model is utilized by several businesses for understanding the processes how the functions of an organization work depending on the changing situations. Companies like Primark utilize such strategies for planning for the various scenarios, which can arise during the running of the business (Mariton, 2017). The planning process is then done after identifying the various scenarios. The external, as well as internal environmental forces, are considered while aligning the scenarios, which are most probably forecasted to occur.

The vulnerabilities are first identified which the business is currently facing or might face in the future depending on the progress of work with the business development. Specific planning is then done for addressing the vulnerabilities, which are identified by the organization. the targets that need to be met for handling the issues are also mentioned and acknowledged before proceeding with the tasks. Common strategies are also set at different levels of the organisation so that the tasks can be managed with ease by the management team. The threats are given more preference in this type of model so that they can be identified and reduced for enhancing the business growth.

• Alignment-strategic planning model

This model refers to the process of alignment of things where a bridge is created between the missions of the organization, which is set, and the resources, which need to be utilized for developing the products and services. This process can be helpful to organizations as it can predict the reasons behind the lack of business growth (Downs, 2017). Primark and other such retail companies utilize this technique for analyzing the drawbacks, which the company faces during the completion of a particular project. The efficiency of the company is also analyzed by applying this particular model in the business processes.

The aspect where the business is performing well is also identified in this process, which makes it easier for the company to identify its strengths and also the weak points. The ways in which the gaps can be removed for achieving the long-term goals of the organization are also identified in this alignment process. The places and the time where the adjustments will be made within the organization are also mentioned. The next step includes the considerations of the adjustments in the main strategic plan, which is designed by the organisation.

• Organic-strategic planning model

This process refers to the development of an organized structure by the company itself for understanding the approaches that can be beneficial for the organization. the common values followed within the organizations along with the policies are acknowledged before the self-reflection process so that the work culture can be analyzed properly (Downs, 2017). The employees of the organizations are given the allowance of doing their self-analysis, which is considered beneficial, as they will be able to understand their strong points for putting them into use and know the areas where they lack behind so that with proper training and coaching they can improve those skills as well.

The leaders are also in charge of looking at and managing the performance of all the employees so that the overall progress of the organization can be analyzed. The vision of the organization is revised so that the tasks and performance of the members of the company can be matched with the progress that is aimed to be made in the organization.

Recommendations

Proper business strategy can be planned by first identifying the gaps, which lie within the organization. Retail organizations like Primark can manage the working environment and organize a proper strategic plan by first doing a self-business analysis for understanding the strong and weak points. Effective communication also needs to be set up within the organization so that more and more people can be encouraged to perform better and enhance the customer retention rate by developing high-quality products and services. The gaps, which are identified in the business along with the weak points need to be addressed in the planning process so that a proper business strategy can be prepared.

Conclusion

This report gives a brief description of how a strategic business plan can be followed within an organisation. The influence of macro-environmental factors is mentioned along with a proper assessment of the organisation's internal and external capabilities. The outcomes of the analysis, which are done, are also mentioned along with few recommendations that can be beneficial for retail and food organizations such as Primark. Therefore, it can be stated that there are specific rules and factors, which need to be, followed for understanding the market and the customer demands that can be helpful for planning the business strategy for such type of organisations.

Reference List

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