This content analyses the business and economic environment by examining macroeconomic, microeconomic, and external factors. It applies STEPPLE analysis, demand and supply concepts, and evaluates UK market competitiveness and fiscal shocks.
The business and economic environment involves the recognition of both the external factors, like the macroeconomic and microeconomic factors. These factors influence business operations and decision making through economic policy, market conditions and consumer behavior. The key components of the business and economic environment include economic factors such as macroeconomic factors and microeconomic factors. The other factors of the business and economic environment involve the political & legal environment, social & cultural environment, technological environment, competitive environment and global environment. The assignment mainly involves the analysis of the business environment through STEPPLE analysis. The assignment also involves the analysis of the microeconomic factors of the selected company through the demand and supply curve, determinants of the supply of the goods. Finally, a discussion regarding the competitiveness of the UK market and examples of random shocks affecting the UK fiscal policy.
10 Years | PhD
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In the assignment, the selected industry is the Manufacturing industry, specially in respect to SIC Code 29 UK public limited company, the selected company is Aston Martin Global Holdings Plc. The selection of the industry and the public sector organization is undertaken due to in-depth analysis of the various external factors and the global microeconomic and macroeconomic factors.
The manufacturing industry involves the production of goods through the use of labor, machinery, and other systems. The major sectors in the manufacturing industry involve automotive, electronics, consumer goods, and industrial products. The global manufacturing industry is the cornerstone of economic activity, which is projected to reach $ 20.76 trillion by 2031(Statista.com, 2024). This industry is driven by technological advancement, digital transformation, and increased demand for sustainable products with a CAGR of 4.9%. China is the leading manufacturer on a global basis. The manufacturing industry is an important part of the UK economy, with a contribution of £217 billion in output and employing 2.6 million people, with the contribution of 45% of total exports (parliament.uk, 2025). The UK is the 12th largest manufacturing nation in the world, with North West England topping manufacturing areas at the regional level.
The selected business organization is Aston Martin Lagonda Global Holdings PLC, which is involved in designing, creating, and exporting cars, which are sold in around 50 countries around the world. The company is an automotive company involved in manufacturing with the vision to be the world's most desirable ultra-luxury British performance brand in the automobile sectors (astonmartin.com, 2025). The company Aston Martin Lagonda’s net income was reduced to 41.3% in 2023 compared to 2022. The market cap of the company is valued at $618.58 M in 2025. The revenue growth showed a decline of 3% in 2023 compared to 2022 (Yahoo.com, 2025). Similarly, the net profit margin in 2023 compared to 2022 showed a 46.2% reduction (globaldata.com, 2024). Aston Martin 2025 has launched the new Aston Martin Vanquish and Vantage Roadster.
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Social factor analysis
Aston Martin's business environment is mainly affected by factors like the aging population and consumer preferences. In this respect, the aging population have shown a growing preference for high-quality products, leading to increase in demand for cars. However, with the benefit, Aston Martin is challenged with the ageing consumers less receptive to new technology (managementjournal.in, 2022). The growing awareness of climate change has resulted in people choosing sustainable lifestyles. In this regard, Aston Martin is embracing electrification through “the Racing Green” sustainability strategy (astonmartin.com, 2021). Aston Martin has effectively included diversity with the objective of 25% leadership roles to be filled by women in five years.
Technological factor analysis
The technological advancement is in the UK, especially in areas like battery technology and digital transformation, impacting Aston Martin. The electrification strategy has resulted in Aston Martin's collaboration with Birdshot, a UK-based lithium-ion battery cell technology company (astonmartin.com, 2022). In this regard, Aston Martin has followed an electrification roadmap to launch the first EV vehicles in 2025 with the aim of the new model line of electrified powertrain options by 2026 (astonmartin.com, 2023). In this regard, the electrification program of Aston Martin received funding from the Advanced Propulsion Center (APC).
Political factor analysis
The main political factor which have impacted the supply of automobile parts through air transportation, resulting in increased cost. This has resulted in a delay of delivery and an effect on operations smoothness. The company, in respect of policy position, legislation, and regulation with its impact on stakeholders, has developed the Corporate Political Engagement statement outlining the approach for interacting with stakeholders. The other issue has been the supply disruption of demand in China, impacting the production (morningstar.co.uk, 2024). This is indicated through the criticism of Aston Martin for the Leave campaign's failure to plan for Brexit in 2016.
Legal factor analysis
The legal factors, like the rate of taxation, have led to increases in high taxation rates which resulting in automobile manufacturing organizations falling into high tax brackets. The issue of the high tax rate has resulted in a decrease in the entrepreneur reliefs and a rise in the corporate tax and reduction of the dividend allowance of Aston Martin, resulting in contributing to a high tax bracket, impacting the operation of the company (euronews.com, 2024). The other issue of legal factors regarding the increased contribution to employee welfare is the National Insurance contribution and minimum wages.
The businesses in the UK are increasingly required to demonstrate social responsibility through addressing environmental concerns, supporting local communities, and ensuring ethical labor practices. In this respect, Aston Martin has effectively adopted ethical practices. The ethical governance in the UK has resulted in the importance of transparency in financial reporting and decision-making. These factors for Aston Martin are due to a high emphasis on information detailing to customers.
The interest rates for the product have soared between 2022 and 2023, peaking at 2.82 percent in 2024. The average interest rate of instant access deposits showed that access to deposits started after the second half of 2024. The issue of the economic factors has shown that the 2016 Brexit has indicated increases in import costs affecting the price of the product (astonmartin.com, 2022). The changing economic fluctuation has resulted in over $1 billion in losses and 5% of the workforce.
In this consideration, microeconomic factors of the demand, such as income levels and preferences of the consumers, overall price elasticity of the demand, directly affect Aston Martin. Customer preference shifts, such as electricity to hybrid vehicles, are also significant parts of Aston Martin that have directly changed their perceptions of the business.
Listing the determinants of the supply of the business 100
Production cost: The cost of raw material, labor, and manufacturing heavily influences the supply. This has been indicated in the rising cost of the premium material reduced in a situation of adjustment accordingly.
Technology and Innovation: The analysis of the graph has shown that the advanced production techniques and automation by Aston Martin increased efficiency. This allows the company to supply vehicles at a lower cost.
Prices of related goods: In this situation, Aston Martin produces complementary products or substitute products, and the price change can affect the supply of luxury cars.
The cause of the supply rise
Cause of the supply fall
The various factors of competitiveness of the UK market and future implications are mentioned below:
Global Trade Relations
The UK trade agreement and the relationship with various key partners like the EU and the US have a huge impact on market competitiveness. Thus, the factors of tariff changes and supply chain disruption can influence business operations.
Labor market dynamics
The UK market, with the availability of skilled labor and policy supporting the workforce, has resulted in the maintenance of the competitiveness of Aston Martin. In the future, the issue of labor shortage will significantly impact Aston Martin's operations.
Global economic crises such as the financial crisis have been noticed in the year of 2008, which began in the UK and led to the economy in a downfall by 6%. According to the statistical report, recession has also been noticed after the COVID pandemic. Apart from that, Geopolitical tensions such as the Russian-Ukrainian war, the US-China trade war, and energy price shocks have also affected the market of Aston Martin. Explanations of the fiscal policy and contractions of the fiscal policy also affect the Aston market, and the UK economy is dependent on those factors.
Conclusion
In the above analysis, Aston Lagonda Global Holding Plc operates within a dynamic environment with a changing landscape of the manufacturing industry. The analysis showed that the shifting customer preference towards sustainable luxury vehicles posed both opportunities and challenges. The macroeconomic factors, such as consumer income and preference, have directly affected the demand for Aston Martin vehicles, while the supply determinants, like production cost and technology advancement, have shaped operational capabilities. Various random shocks like geopolitical tension and economic crisis negatively affect the vulnerability of the industry, thus requiring robust financial policy to curtail the uncertainties.
Reference
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