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How Market Economy Functions With Role of Government- Aston Martin


  • Unit No: 3
  • Level: High school
  • Pages: 13 / Words 3223
  • Paper Type: Assignment
  • Course Code: ENTREP7022
  • Downloads: 376
Question :

This assessment will cover following questions:

  • Generate an in-depth understanding on the important elements of the internal environment of organizations and the interaction with the external environment.
  • Identify and evaluate how a market economy functions and the role of government within it in the context of Aston Martin.
  • Determine the economic environment within which businesses operate in the United Kingdom.
  • Aston Martin is a British based sports car manufacturer. Explain why countries benefit from trade with each other.
Answer :
Organization Selected : Aston Martin


Contemporary business environment is consider as increased competitive and dynamic environment where organisation provide different types of products and services in order to take competitive advantages. The needs and wants of people are changing day by day where innovation and new technology has taken the places which help companies to increase the organisational productivity and market image. Therefore, different types of logical and reliable business strategies are developed by corporations that support planning, control and decision making effectively (Boone and et. al., 2019). To understand the about contemporary business environment and competition Aston Martin has been selected that is British car manufacturer company was founded in 1913, London, United Kingdom. The headquarter of such organisation are in Gaydon and UK where it manufacture luxury sports cars and grand tourers. The needs and wants of people are identified by management the produce products accordingly that help to take the competitive advantages. Different types of challenges are faced by organisation while running its business and strategic decisions are taken by management which helps to improve the business productivity by accepting challenges. If company is not able to accept the changes and challenges then it become difficult for organisation to sustain in competitive environment.

The environment of business is mainly consider economic and non economic environment which has impacted on business organisation whether positive or negative. Economic environment contains economic system, economic policies and economic condition that affects the operation and helps to control the internal activities (Rosenbach, 2018). Whereas non economic environment consist demographical, natural, social, political, environmental, legal and technological factors which are uncontrollable and can impact business positive and manner as well. These are influencing factors which arises while organisational activities and make decisions to work properly. Therefore, it is important for Aston Martin and other organisation to focus on such factors and make efforts to reduce the negativity. This report will help to understand about economic and non economic factors, how they are shaping the behaviour of respective organisation by involving cultural and natural environments. The aim of this report to enhance knowledge about environment and factors which affects the operations and maintaining good behaviour. Moreover, report covers PESTLE and SWOT analysis of organisation which has affected business and maintaining good behaviour (Hassanien and Dale, 2019).

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How do the business, cultural and natural environment that are shaping the behaviour of Aston Martin organisation

Business environment is said to an external and internal forces like customer expectations, suppliers, government activities, employees, technology, innovation and demand and supply, social trends and market trend which influences operations and functions of business organisation (Vetter 2019).

Business culture shapes behaviour of business organisation behaviur

Business culture is illustrated as norms, values and traditional behaviour of a group that has an impact on the strategic direction of business organisation. In other words, culture of organisation is related to behaviour, ethics, values, vision, beliefs, habits, working style and etiquettes which helps to accept the challenges. Business culture is important factor that shape the behaviour of Aston Martin by recruiting, building and retaining first class team which helps to operate the business activities and complete task effectively by accepting challenges. The corporate culture of Aston Martin is very effective as it helps to retain employees and celebrating diversity by seeking out, bringing and providing training to employees that is admittedly quite which helps to accept the challenges easily. Moreover, management of such organisation prescribes learning curves that helps new staff to learn the ropes and increase organisational productivity (Fascia, 2018).

Economic environment and its factors that shapes the behaviour of Aston Martin

Economic environment is related to economic factor that affect organisation behaviour and consumer behaviour by stating how it operates and can be more successful. For organisation it is important that to focus on profitable factors which can helps to increase the organisational productivity and profitability (Lin, and et. al., 2018).

Economic policies

Economic policies is consider as course of action that involves decisions made by government related to spending and taxation, shape organisation behaviour. As different types of regulations and trade policies are formulated by UK government, followed by Aston Martin in order to run a business by manufacturing and supplying the sports cars. The management of such organisation focus on spending of people and taxation policies that helps to operate a business effectively that is impacting positively. On the other side, in absence of economic policies and government regulation it may be difficult for organisation to operate and run its business in competitive market and sale its products. Therefore, economic policies has impacted positively on Aston Martin operation that suggest where is need to make invest and how can get revenues.

Economic system

Economic system is another element of economic factor that means how a society and organisation organise available resources, services and goods across the geographic region or nation under government regulations. With the helps of economic system Aston Martin enable to distribute resources and trade goods and services. In other words, it control the production of sports cars, labour, capital, entrepreneurs and physical resources that helps to operate business effectively and manage all business functions. This is influencing factors that affects the operation of respective organisation positive and increase the profitability (Hansen, 2018).

Economic condition

In addition to, economic condition refers as macroeconomic variables and trends in a country that impacted on Aston Martin operations such as management focus on changing trend, unemployment rate, inflation, fiscal and monetary policies which arises in business activities. Aston Martin is large size organisation that requires number of employees to work there so it recruits a large number of employees which helps to reduce the unemployment rate and increases organisational productivity. Moreover, the population of UK is increasing that is creating demand of sports cars that help Aston Martin to improve the sale and profitability of company.

Non economic environment and its factors that shapes the behaviour of Aston Martin

Non economic environment is said to external environment that involves political system, government policies, legal framework, social system, demographic factors, technological development and natural environment that are uncontrollable in business (Zhang, 2018).

Political system

The political system of UK is stable which has impacted on Aston Martin positively as it operate its business easily and sale its product in large number without any boundations. At the same time, it might affect negatively when there is change in government and its tax rates which can limits the trade of products and services.

Social environment

Social environment has taken the place in Aston Martin a it products and services which are provided by selected organisation are according to demand and desire that attracts customers and increases sale. Hence, social and political factors are shaping the behaviour in selected organisation (Yin and Quazi, 2018).

Demographic environment

Non economic environment also involves demographic environment that means specific target which is used by organisation to execute its business and run it effectively. Aston Martin uses demographic environment to identify target market for its specific sports cars that helps to increase the sale and market image. For instance, management are mainly targeting to high profile people between the age group of 25 to 50 years. By targeting and using demographic environment it can increase the sale and productivity of business corporations (Arnold, Beauchamp and Bowie, 2019).

Technological factor

For running and operating a business successfully it is important for organisation to adopt innovation and bring new technology that can attract customers as well as help to maintain the operation effectively. It helps to shape the behaviour of organisation for instance, Aston Martin that is luxury sports cars maker providing different models of cars to customers. Management of such organisation conduct market and bring new technology to manufacture cars which helps to produce new products and services. This helps to increase organisational producing and shapes organisational behaviour positively (Wielki, 2018). 

Legal factor

This means rules and regulations which are governed by governmental authority to execute and operate business effectively. Aston Martin is following all legal frameworks which are related to organisation and its operation such as minimum wages, anti discrimination act, health and safety act, data protection act, equality, consumer protection act etc. It helps to increase the production and profitability by retaining customers effectively. On the same time, it can affect negative in case of not following legislations which might limits the productivity and increases employee turnover situation. Therefore, this factor shape the organisational behaviour.

Natural environment shapes the behaviour of business organisation

Natural environment is related to living and non living things that occurs naturally and influences behaviour of organisation. Ecological and geographical are those factors which helps organisation to increase operational activity of Aston Martin by focusing on soil, vegetation etc. By considering such factor organisation set their standard and get involves in business activities that helps to execute business operations effectively. Moreover, Climate and weather condition are natural resources that arises in businesses and impacted the behaviour 0of Aston Martin. For instance, the demand of sports cars and other services can be reduce due to changes in climate condition. This means changes in climate affects the needs and wants of people that highly affected the operation of selected organisation. This is important for organisation to focus on climate and provide kind of products and services that help to manage the business activities.

Topographical factors

 Topographical factors are those factors which involves height, direction of slope, steepness of the slope and structure of corporation that influences growth and development of business by bringing variations and changes. In context to Aston Martin, hierarchy structure is followed by organisation where employers and employees are allow to communicate easily and coordinate effectively. Such structure helps management of chosen organisation to establish clear authority for work and department. In this authority, it allocate resources, reward and punish employees which helps to operate a business. The disadvantages of such structure is centralize power and authority at highest level that create difficulties to make decision on day to day operations. Therefore, this factor can impacts negative on behaviour of corporation and reduces productivity (Bernstein and Szuster, 2018).

Location aspects

Location is highly important for organisation because such factor greatly in to how initial customers can find a organisation and how a existing customers visits mostly. As customers are important for all organisation who contribute in success of organisation by purchasing good and services. Moreover, this [provide feedback to company which increases market image and profitability. Aston Martin is taking advantages of such factor by opening number of car stores in UK and other nation which helps customers to buy products easily and retain existing customers. This increases sale of sports cars and satisfying customers. Hence, location aspects is important factor in business environment which uses to operate a business by selecting a appropriate location and place where customers can visit easily and make decision to buy the products. A part from this, Aston Martin has online stores where customers has option to put their query and get answer, influences organisational behaviour (Ryan and Garrett, 2018).

PESTLE and SWOT analysis with examples

SWOT Analysis: It represent both internal and external analysis which is done by company in order to gain competitive advantage over other rivalries that deal in similar type of industry. The manager of Aston Martin constantly upgrade its strength and overcome existing weaknesses so that they can either exploit the opportunity or mitigate threat to systematically maintain the operations of luxury sports car (Woiwode and Woiwode, 2019).


  • The company has effectively maintained its global image within Automobile sector due to which it gets the advantage of high recognition value which helps in setting the unique image of brand. It is relatively tough for existing as well as new rivalry to affect the position of firm.
  • Being luxury sports car the company usually charges premium prices for its offerings due to which it gains the high profitability margin. Along with that Aston Martin has effectively maintain the large customer base of loyal customer to whom they serve significantly.

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  • Aston Martin encompasses limited range and choices in their sports cars which restrict the choices of prospects. Although they serve supreme level of quality but most of the time customer looks for the wide product line or alternatives to make best possible choice.
  • As Aston Margin only targets only to the premium range of customer which furthure restricts their market. Like the other competitors of company probably have high ration of customer. Thus, the company need to accommodate the need of their customer and expand market significantly.


  • Aston Martin is using new technology and innovation in its products as well and supply chain that helps to capture high market share and increases number of customers.
  • The expansion of market in context to Aston Martin is available in several countries that helps to maintain the selling activity and profitability.


  • The threat for Aston Martin is increases in petroleum prices which increases products prices.
  • There is high competition for Aston Martin that can reduce the organisational productivity and selling activity.

PESTLE analysis – This is a concept which is used by organisation in marketing principles to analyse which factor can impacts on operation and profitability. In other words, a tool used by enterprise to track the environment which help in operating and planning to launch new product and services. In Aston Martin, PESTLE analysis is done by management that are as defined:

Political factor – This element state the extent to which government may influence the economy. In UK, tax policies, fiscal policy and trade tariffs are levied by governmental authority which has impacted on Aston Martin positively. In case of changes in tax and duty it become challenging situation to operate its business in competitive en

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