Strategic Alignment between the External and Internal Business Environment

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Introduction: The strategic alignment between the external and internal business environment has been noted as the source of competitive advantage for the contemporary firm (Kearns & Sabherwal, 2007). It is noted that there has been high degree of turbulence within the business environment within the UK food retailing sector, which is the reason the industry leader Tesco requires consistent strategic alignment with the changing business environment. The aim of this report is to provide a critical analysis of the current external and internal business environment, along with the key PR issues faced by the firm and recommending feasible strategies to achieve long term competitive advantage for the firm. Part 1: Analysis of External Business Environment: The external business environment has been divided into: (a) macro business environment analysis; and (b) micro business environment analysis, which have been summarised with the help of following frameworks: Macro Business Environment Analysis – PESTEL: The PESTEL analysis is summarised as follows: Political: • The globalisation has led to the rise in the convergence and harmonisation of trade regulations across the globe. This can be seen from the increasing membership of WTO, which now has more than 159 member states globally (Hoekman & Kostecki, 2009). This provides an opportunity for the UK food retailers to harmonise their global supply chains to achieve cost advantages. • The expansion of EU has led to the
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