External Environment : The Strategic Management Model Essay

2678 WordsFeb 27, 201511 Pages
External Environment A firm’s external environment consists of all the conditions and forces that affect its strategic options and define its competitive situation. The strategic management model shows the external environment as three interactive segments: the remote, industry, and operating environments. In case of Barratt PLC, as a construction and developer company, they have numeric external factors that can influence their business and strategy. If we perform the PESTEL analysis tool, we can have a better view about how the external factors are influencing the business organizations. Here PESTEL stands for “Political, Economical, Social, Technological, Environmental and Legal” All the business organizations are bound to follow and comply with government regulations. It is no different for Barratt PLC as well. To boost up the economy government took certain measures which influence the decision makers of a company to set up their business strategy. As a part to recover the economic condition of UK, in April 2013, the Government introduced “Help to buy” to improve mortgage finance. This “Help to buy” have two different schemes. One is for acquiring/building new homes (Equity Loan) in England and another is for all home purchases (Mortgage Guarantee) in England. This Help to buy (Equity Loan) has a major impact in the UK housing market. Almost 85 percent of the purchasers of new house used this Equity loan in UK year to 30 June 2014. So from this information, we can
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