pestle analysis

  • Created by: 18muire
  • Created on: 09-10-19 12:07

political

  • polticial environment refers to government actions and policies which affect the operations of a company or business.
  • these actions maybe local, national or international,businesses play close attention to see how they will be affected.
  • why do they matter?
    • polticial decisions affect the economic environment.
    • influence a country's socialcultural enviornment.
    • politicians can influence the rate of emergenceand the accapetanec of new technology.
    • they change the sretagies of businessesand functional decision making.
  • local level- made by councils, usually involves planning permission.
  • national level- the government, usually education, health ect.
  • international-international communities, trading.
  • political stability- governments are elected for 5 years and before elections governments will publish their plans and when elected they will express what they intend to do. Helping businesses to plan how and what they are going to produce.
  • Polticial decisions and uncertainity  if we leave the EU and have a transition period of 2 years is an example of poltical unstability. impacting decision making of many firms and investment.
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info about EU leaving

Migration- less people are coming into and leaving our country.

Jobs- maybe more available if non UK citizens have to migrate. better opportunities for UK citizens.

Exchange Rates- will increase but tarriffs will be added.

Inflation- If there is more money but it looses its value which impacts the UK economy.

Economic Growth- likley to not grow however new opportunities may arise with other countries.

Consumer sales- decrease becuase of less disposable income that people will have.

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the impact of changes in the political environment

Enterprise the government can influence the amount of new start up businesses by creating greater support through grants, loans, preferential tax and national insurance arrangements.

Regulators ensure that the strategic decisions of business are in the public interests and not exploiting the consumer. Effective regulators will encourage high competition which will lead to low pricing and better benefits for the consumers.

Infrastructure, improved infrastructure allows faster and more efficent transport and communication links. givernment willing to invest in infrastructure will hope to attract firms to particular regions of a country. 

Environment, policies on green taxes and increased regulation on areas such as waste management increase the costs of a business. government can influence decision making on environmental issues by offering incentives to businesses such as grants.

Trade, international tradecan affect the amount of overseas firms that wish to invest in the UK. 

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the impact of changes in the political environment

Trade continued, The EU and type of trade deal that we decide on will affect the strategic and tactical decision making of many non-EU  businesses thata currently loacte in Britain.

Economy government policies and objectives- monetary, fiscal, supply side. creating abusiness climate, encouraging new businesses through grants, preventing monopolies or uncompetitive practices through teh competition and markets authority. providing services through the public sector and taxation on businesses and consumers.

Affects on Business, will not affect them all in the same way, large businesses like apple that operate overseas are less likely to be impacted by the changes.

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The Legal Environment

Legal Factors- businesses have to operate within the legal framework of the law as failure to do so may lead to fines and a bad reputation.

  • competition law, 3 main types of anti-competitive behaviour
    • merges that result in a dominant position.
    • abuses of a dominant position.
    • anti-competitive agreements such as cartels or price fixing.
  • competition act outlaws practices that restict competition.
  • the enterprise act regulates mefrger activity to prevent monopolies from occuring.
  • in the UK, competition rules are enforced by the competition and markets authority (CMA)
  • in order to safeguard the interests of the community, government may ban or limit the production of certain goods and services. eg selling drugs 
  • goods which harm the environment are also totally banned or strictly controlled.
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consumer protection and contract law

CP consumer protection 

  • laws have been passed to protect the interestd of the consumerbefore and after purchasig the good or service from businesses exploiting them.
  • the consumer rights act 2015 replaced these different laws with one over arching piece of legislation.

CL contract law 

  • a contract is a legal agreement between two parties for the operation of a service in return for a rewrad.
  • businesses form contrcats with many parties, consumers, supplers, employees ect.

EL employment law 

  • aims to ensure that employees and potential employees are treated failry by the consumer.
  • the national minimum wage is designed to protect low paid workers.
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health and safety and environment laws

health and safety

  • businesses have to provide a safe and healthy environment  for their employees, customers and visitors.
  • the law places a duty on all businesses to carry out risk assesments and training realted to those risks.

Environment laws

  • includes land, air and sea
  • eviron,ent agnecy is the regulatory body with responsibilty of protecting the environment.
  • the laws cover a wide range of issues such as noise pollution to climate change may of these are EU based
  • meeting environmental standrads imposes extra costs on businesses.
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implications for businesses

  • costs are incurred as businesses have to comply with legislation.
  • however there are also benefits of not only complying with the minimum requirements set out in the laws but by going beyond them.
  • enhanced reputation
  • improves staff morale
  • improves customer loyalty
  • less industrial action.
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business and the social environment

the way in which changes in society affect the activities of business. eg population, family, lifestyles and housing.

how does change impact businesses?

  • changes in society are a key driver of change in markets.
  • market segments are often based on social groups (e.g. income,age, gender)
  • the size, structure, and growth of segments are closely related to changing social trends.
  • businesses have to understand the nature and significance of social trends for demand and future labour markets.

Population 

  • major changes in the UK population include; net immigration, diverse racial + religious distribution, ageing population and a growing birth rate.
  • UK populationis ageing.
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social environment pt 2

  • more services may have to be created for elderly people as people are li9ving longer and less babies are being born.
  • less focus on children.

Migration

  • net migration has been the main source of growth since 1998.
  • overall migration levels have remained broadly stable since 2016. EU net migration has decreased since 2015. Non-EU net migration has remained stable over the last year.
  • business implications, costs + wage rises would be stopped.
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swot

opportunities 

  • new business start ups.
  • housing markets growth.

Threats

  • brexit
  • population structure 
  • employees
  • customers
  • demand for resources

demographic change can either be seen as an opportunity or a threat depending on how thw business responds.

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households

  • households can be one person or a group living together.
  • younger people are living with aprents longer.
  • family sizes are decreasing
  • 2021 estimates that 355 of households willl be single.
  • 2018 more than half of those living alone were 65+

implications for bsuinesses

  • greater demand for smlaler housing and electrial appliances, water.
  • less demand for family holidays.
  • flexible workforce as they dont have families to go home to.
  • sizing/offer implications for supermarks e.g. bogof looses effect as its too much.
  • care industry may grow.
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lifestyle

Lifestyle is the way that we live and how we comsume goods and services. e.g

  • chnage in media consumption
  • decline in newspaper reading
  • growth in digital television channels.
  • changing shopping habits
  • using of e-commerce.
  • social networking.
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