Pestle Analysis Essay

With reference to organisations or industries that you know, to what extent do you think that recent changes in the UK economy will have inevitably damaged the long-term profits of businesses that operate in this country? (40 marks)

tax changes, new laws and government policy changes. Managers should not just rely on the PESTLE analysis, it is a tool, a snapshot in time, which will assist in understanding the current factors, it will not determine a direct path in the direction they need to follow to progress the company considerably. When in fact managers most need to judge, into what factors are most likely to change and also which have the greatest impact to them, so in the case of Centre Parc’s they need to consider mostly economical and sociological. A way of achieving the relevance of each factor to the company is to rank or score the factors, so there is a clear understanding of which are of most importance and vice versa. As Centre Parc’s has many different villages, this means that it includes many divisions and also brands (Starbucks, and Zilli restaurants), so managers need to concentrate on one specific area within each village.

Each of these stakeholders is affected by the action of business because each group has an interest in the type of decision that the business managers takes. To conduct the analysis of Asda external environment, pestle analysis will be used.

Evaluating information on events occurring outside the organization and identifying trends is environmental scanning. Trends are determined through the forces of social, economic, technological, competitive and regulatory sources. In some of my research on this subject, I found reference to the term PESTLE analysis which involves six different environments for assessment: political, economic, social, technological, legal and environment.

“PESTLE analysis will help to capture understanding about aspects of the context by using the prompts political, economic, sociological, technological, legal and environmental. It is a technique that facilitates a wide scan of the context and actual or potential factors that would affect objectives if left unmanaged.” (Webster-Murray, R. 2010. pg.88)

Nissan UK is able to use inflation in the prices of their goods, this is because they are then able to make sure that they are taking advantage of this type of opportunity their organisation, this is going to allow their company to make a profit at the time of a recession.

As economic growth increases moderately in 2014, the rate of inflation is expected to remain below 2 percent. The price of goods in the country will continue to be restricted by global competition and use of production capacities that are relatively low as compared to historical averages. In addition, the inflation rate will remain below 2 percent because of decrease in energy prices and small increase in the prices of food. Nonetheless, while energy prices continue to reduce this year, the percentage of the decrease will be less while food prices may regain normal rate of growth.

Macro environment comprises external forces that organisation cannot directly control, instead organisation need to manage their macro environment in a way that benefits them ("The Macro Environment & Pest Analysis", 2016). The PESTLE analysis is the most widely recognized approach for considering the external business environment (Gupta, 2013). PESTLE analysis stands for Political, Economic, Social, and Technological, Legal and environmental analysis and describe a framework of macro environmental factors utilized as a part of the environmental scanning component of strategic management. Generally, all the PESTLE factors might not important for all types of industry its depends up industry nature or size. This PESTLE analysis is based on Accor Hotels in Australia which is a famous and globally recognise hospitality brand.

Macro environment is crucial to the development of a company. All the external factors can have huge positive or negative influences on Travis Perkins plc, therefore a better understanding of the environment of the company is of supreme significance (Peng & Nunes, 2007). Among all the analysis tools, PEST analysis is one of the most effective tools to analyze the external environment of a company (Riley, 2012). This part will demonstrate PESTLE analysis of Travis Perkins plc below. The result of PESTLE analysis can be demonstrated in the following table 1.

This would in turn effect Famous Brands negativley as Famous Brands will now have to pay a higher tax on sugary products in order to buy them forcing them to raise the costs of their end products sold to consumers meaning that the end products that consumers are now buying are going to be more expensive and taking away a competitive advantage from Famous Brands as they now have higher product prices making it easier for competitors to compete against

The PESTLE analysis can be used to assess the strategic relevance of the six principal components of the macro-environmental: political, economic, social, technological, environmental, and legal forces. It can be used as a tool by companies to better understand of the macro- environment they are operating in.

Inflation; ‘a situation in which prices rise in order to keep up with increased production costs… result[ing] [in] the purchasing power of money fall[ing]’ (Collin:101) is quickly becoming a problem for the government of the United Kingdom in these post-recession years. The economic recovery, essential to the wellbeing of the British economy, may be in jeopardy as inflation continues to rise, reducing the purchasing power of the public. This, in turn, reduces demand for goods and services, and could potentially plummet the UK back into recession. This essay discusses the causes of inflation, policy options available to the UK government and the Bank of England (the central bank of the UK responsible for monetary policy), and the effects

Gallagher Construction and Development are based in north London. They are a property development and refurbishment company. They have been in the construction industry for about twenty five years. They have a workforce of twenty directly employed and about fifty self employed workers at the moment.

External analysis of general environment will be done using PESTEL which refers to how the political, economic, social, technological, environmental and legal environment affects an organization. Below will be a diagram of PESTEL, followed by a brief explanation of each factor and their examples.

The PESTEL analysis consists the analysis of Political, Economical, Social, Technological, Legal, Legal and Environmental forces of a particular industry of a country.