Business Environment PESTLE Analysis & Market Trends Case Study

Task 1 - Business Environment in the UK: Impact on Companies

Introduction

• British business and HSBC Private play vital roles in providing diverse banking services to people of the UK
• As opined by Estevão and Lopes (2022), a better business environment plays a vital role in creating better growth and installation for the company.

This slide has provided an overview of and implications of the business environment that helps to develop the public sector and organisation. Moreover, this slide has also provided importance to the British Business and HSBC bank's role in developing and analyzing the environment of business that helps many UK companies to enhance their market position. A good business environment helps to reduce poverty with the help of introducing new jobs.

Scope and definitions of the environment of business

• The major objective of the business environment is to develop local and global market dimensions
• External factors impact the performance of a company and also help in the operational process that helps to enhance the environment of the business (Alkaraan et al., 2022).

This slide has examined the definition and scope of business environment as environment business can have positive and negative impacts on the growth of business. Moreover, the business environment also includes economic, social, technological, environmental, and legal aspects that help in developing better decision-making for local and national consumers. Knowledge of market trends helps to comprehend societal expectations helps to mitigate major challenges and allows the company to grab future opportunities.

Pestel definition

• Pestle analysis is a strategic management tool that helps calculate the performance of the company
• As opined by Kordana and S?y? (2020), Pestle analysis helps to discuss future details and also helps to provide better actions.

Pestle analysis helps to examine the environmental, technological, economic, political, legal, and technological aspects of a country. Moreover, many organizations use pestle analysis as a strategic management tool to predict macro-environmental aspects that help organizations develop their operations and decision-making processes. Moreover, each letter of PESTLE stands for a specific variable that helps to examine how an organisation performs in a diverse business environment.

Pestle application

• Environmental factors help to discuss the impact of environmental considerations
• Economic factors help to discuss the economic landscape of a country and also help to analyze such as economic growth and inflation rates

Pestle analysis is used for various reasons as many companies use pestle analysis for understanding specific markets. Besides, the company also uses pestle analysis for understanding major risks in a specific business environment as pestle analysis helps a company to understand the dynamics of a country.

Implementation of Pestle in business Banks of British

The UK is one of the biggest economies in the world and is growing at a rapid speed that could help the British Business Bank to develop its market position. Besides that, the UK also scores high in economic freedom. Besides, that country has also adopted new AI technology that is helping diverse companies in the country. However, the UK's environmental condition is changing and has impacted the lives of many people in the country.

Apply Pestle in HSBC private bank

The UK is one major country that provides equality and freedom to its workers in the country. Besides that, the UK also has good insurance policies for their employees that could help HSBC Bank to enhance the lives of their employees. Moreover, in recent years, the quality of air and water has been detected, which has impacted many people in the country.

Task 2 - Analyzing Business Challenges and Market Growth in the UK

Introduction

This report has shed light on diverse public and private operations across parts of the UK. Along with that, this study has also examined the impact of anti-competitive practices that have impacted the business environment of the UK. Moreover, this report has also discussed the importance of government in developing laws, policies, and rules that play a vital role in developing the growth of diverse companies in the UK as the government is one of the most influential prospects that help to develop a climate of business. Moreover, the government also plays an important role in wide-ranging effects and methods that help in organizing a company. Moreover, Tesco is one of the biggest retailing companies in the UK that aims to provide a better recycling process that can help in developing the future and help to provide better consumer experiences. On that account, this study has examined the role of legal structure as better legal structure helps to develop business structure.

Examination of diverse structures of legal and their Advantages and disadvantages of diverse structures of legal

Diverse types of legal structure

Sole Proprietorship

Sole Proprietorship is one of the business structures that is owned by a person and run by an entire enterprise. Moreover, the business operation plays a critical role in developing the operation of a company such as debts and liabilities, and is also helpful in owner responsibility (Januarita, 2021). Moreover in Sole Proprietorship, the owners are regarded for business as they are not different entities of legal.

Corporation

The corporation is an independent body of legal structure that is distinct by its owners and stockholders. Along with that, corporation rights and obligations are the same for every individual. As per the view of Schooley (2020), corporations provide better liability protection.

Advantages and disadvantages of structures

Advantages and Disadvantages of sole proprietorship

• Sole Proprietorship takes less time to set up compared to diverse structures of business (Januarita, 2021). Moreover in the UK, most small businesses use Sole Proprietorship legal structure.
• However Sole Proprietorship structure also creates major challenges for small companies in the UK to obtain cash when they need it. Along with that it also creates financing problems for larger business firms in the UK.

Advantages and Disadvantages of Corporation

• As opined by Schooley (2020), a corporation's legal structure provides better tax benefits.
• However, the corporation's legal structure is a costly process that creates problems for a company to keep up with corporation laws and regulations such as meeting shareholders and providing yearly reports.

The major difference between private and public ownership

Private ownership refers to the ownership of a private individual or by an organisation rather than by a public or state body. Private ownership helps people and organizations to all utilization by sole authority and also profit that has been decided by who owns what (Lowry, 2022). Moreover, public ownership owns all control of institutions, resources, and assets is referred to as public ownership (Lowry, 2022). Moreover, public ownership also provides incentives that help workers to increase their loyalty towards the company.

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Difference between private and public ownership

Private ownership is owned by the manager, founders, and other private investors. Moreover, the private ownership model is also managed by a private person or private company. Besides that, it is the major purpose of private ownership to make money for the company owners. On the other hand, public companies are owned by the public as the public has purchased stocks of the company. On that account, the public form and company are owned by a diverse public and various groups of shareholders with the help of the stock exchange.

Financing process identification

Private enterprises are a mix of various funding as per their situation and requirements. A Venture capital company helps to provide better equity of private which helps in the better investment of return of company ownership. Individual investors support the contribution of funds for small enterprises and startups in return for stock (Saut Maruli Tua Pandiangan et al., 2022). Such investments provide better incentives to their workers for the success of the firm.

Examining UK policy of competition and framework of legislative and their anti-competitive practices

Market structure is one of the major aspects of business as it helps control monopoly in business. A monopoly happens when a manufacturer or services provide control of a whole specific market. Besides that monopoly also happens when products fail in close substitute and a company has big control over product supply and their price. As opined by Davis and Orhangazi (2020), monopoly companies charge higher prices that help limit output and also help reduce the welfare of consumers. Monopolies are not so common in real-world circumstances. On the other hand oligopoly and competition of monopolies are commonly seen.

As depicted by Statista.com (2023), in 2022 sales of retailer products will reach over 495.71 billion pounds. On that account retailers' sales have peaked in the UK in 2022 compared to 2021. As opined by Statista.com (2023), in 2022 sales of retailer products have seen an increment of 35 million British pounds. This graph shows that the UK retailer market is stable which could help Tesco company to develop its marketplace as Tesco is one of the biggest retail companies in the UK.

In 2023 Tesco supermarket chain reached over 7.75 billion dollars (Statista.com, 2023b). On that account, a stable retail market could help the Tesco company to maintain its growth as in recent times the brand value of Tesco has seen major problems. As opined by Statista.com (2023b), Tesco's market value was 9.91 million dollars in 2022.

Examining the Competition Policy of the UK

CMA is the main agency of the UK that helps in developing competition laws. Moreover, the role of CMA is vital for developing the business environment of the UK retailing industry. As CMA helps to develop better competition and also plays a vital role in reducing anti-competitive behaviour which helps in developing better business conditions that help increase the revenue of companies. As opined by Gov.uk (2019), CMA helps both businesses and people and also plays a vital role in developing a competitive market and also helps in tackling unfair practices. Moreover, CMA also helps to develop markets for consumers that also helps to develop the business and economy of the UK (Gov.uk, 2020).

Analysis of market and competition and review of practices of business and their impact on consumer

CMA is a regulatory entity of the UK that helps provide better fair practices for fair competition and also controls anti-competitive practices in the UK market. As opined by Butler (2023), Tesco is a major retail company in the UK that has not explained the unit prices of club cards that have been explained by CMA. On that account, CMA has examined Tesco's prices of club cards which has helped to develop better corporate practices in the market. Besides that, CMA has also played a critical role in developing the market structure of the UK which has helped reduce major obstacles in the retail sector of the UK for fair competition. Along with Tesco CMA has also investigated other retailer companies such as Asda to maintain fairness of competition. CMA may investigate ASDA, Boohoo, and George company eco-friendly sustainable claims of their fashion products (Gov.uk, 2023). On that account, the influence of CMA is high as CMA's major mission is to provide better consumer services. Besides that, CAN also plays a vital role in managing diverse products and their prices and also forces retailer companies to provide better product quality in the UK.

Understanding of objectives and fiscal monetary policy of the government

The main objectives of the micro economy are to develop economic growth and also help in better employment, stability, and price control for achieving balance payments (Chugunov et al., 2021). Moreover, Fiscal policy also measures government taxation and expenditure to exert an impact on aggregating demands (Chugunov et al., 2021). Thus Tesco company has transformed its ideas to adapt important requirements for better market growth. As per the view of Businessinsider.com (2020), Tesco company has seen a 48% jump in the first quarter of online sales. Thus Tesco has increased its online selling capacity which has helped the company to maintain its growth in the UK. As stated by Businessinsider.com (2020), Tesco's online sales have reached 1.3 million per week from 600,000 in 2020. On that account, Tesco company has achieved a million online sales in the UK per week. However, CMA's monetary policy can help Tesco to develop its interest rates.

Understanding of globalization and its impact on business, competition, and economy

The role of globalization is crucial for the economic development of the world as it allows many companies to hire new talents across parts of the world that can help to develop UK retailers and Tesco. As per the view of Nugroho et al. (2021), Economic Globalisation helps in increasing the interdependence of the world economy. Besides that, EG also plays a vital role in developing the scale of cross-border trade in goods and other services and helps to increase international capital (Nugroho et al., 2021). On that account, the impact of globalization is huge on business development, the economy, and competition. Moreover, Globalization has also helped Tesco to excel in their market position across parts of the world which has helped Tesco company to enhance its revenue growth.

As shown by Richter (2020), Global trade percentage has reached 59.5% in 2018 compared to 60.9% in 2008. Moreover, the relocation of industrial operations has caused lower production expenses that have increased unemployment in diverse areas of the UK (Richter, 2020). On that account, Global trade volume has decreased in recent years which has impacted business.

Conclusion

On that account, this study has examined diverse elements of organizational structures. Besides that, this study has also discussed the advantages and disadvantages of the legal structure of the UK. Along with that, this report has also shed light on the role of CMA in the UK. Moreover, this paper has also analyzed the impact of globalization on UK retailer companies and economic development. Furthermore, major differences between public and private ownership have also been discussed in this study.

References of Task 1

• Gov.uk., (2023). Equality Act 2010: guidance. Available from https://www.gov.uk/guidance/equality-act-2010-guidance#:~:text=The%20 Equality%20Act%202010%20 legally,strengthening%20protection%20 in%20some%20 situations. Accessed on 11.12.2023
• Elliott., (2022). UK payroll numbers fall as the unemployment rate rises to 3.9%. Available from https://www.theguardian.com/business/2023/may/16/uk-payroll-fall-unemployment-rate-rises#:~:text=The%20official%20figures%20showed%20employment,to%203.9%25%20from%203.8%25. Accessed on 11.12.2023
• Rousell, J. (2022). Where Does the UK Rank in the Internet Speed Test? [online] Full Fibre Broadband. Available at: https://fibreheroes.co.uk/blog/uk-internet-speeds/#:~:text=According%20to%20the%20 Worldwide%20 broadband.Accessed on 11.12.2023
• Alkaraan, F., Albitar, K., Hussainey, K. and Venkatesh, V. (2022). Corporate transformation toward Industry 4.0 and financial performance: The influence of environmental, social, and governance (ESG). Technological Forecasting and Social Change, [online] 175, p.121423. doi:https://doi.org/10.1016/j.techfore.2021.121423.
• Estevão, J., Lopes, J.D. and Penela, D. (2022). The importance of the business environment for the informal economy: Evidence from the Doing Business ranking. Technological Forecasting and Social Change, [online] 174, p.121288. doi:https://doi.org/10.1016/j.techfore.2021.121288.
• Kordana, S. and S?y?, D. (2020). An Analysis of Important Issues Impacting the Development of Stormwater Management Systems in Poland. Science of The Total Environment, [online] 727, p.138711. doi:https://doi.org/10.1016/j.scitotenv.2020.138711.
• O’Neill, A. (2023). United Kingdom - Gross Domestic Product (GDP) Growth Rate 2024 | Statista. [online] Statista. Available at: https://www.statista.com/statistics/263613/gross-domestic-product-gdp-growth-rate-in-the-united-kingdom/ [Accessed 11 Dec. 2023].
• Worldometers.info (2023). U.K. Population (2019) - Worldometers. [online] Worldometers. Available at: https://www.worldometers.info/world-population/uk-population/ [Accessed 11 Dec. 2023].

References of Task 2

• Businessinsider.com (2020). British grocery chain Tesco saw online sales jump 48% in the three months to May. It has been the ‘port of call’ for many UK customers during the pandemic, one analyst said. [online] Business Insider. Available at: https://www.businessinsider.in/retail/news/british-grocery-chain-tesco-saw-online-sales-jump-48-in-the-three-months-to-may-it-has-been-the-port-of-call-for-many-uk-customers-during-the-pandemic-one-analyst-said-/articleshow/76648756.cms [Accessed 11 Dec. 2023].
• Butler, S. (2023). Which? reports Tesco to CMA over the pricing of Clubcard offers. The Guardian. [online] 8 Jun. Available at: https://www.theguardian.com/business/2023/jun/09/which-reports-tesco-to-cma-over-pricing-of-clubcard-offers [Accessed 11 Dec. 2023].
• Chugunov, I., Pasichnyi, M., Koroviy, V., Kaneva, T. and Nikitishin, A. (2021). Fiscal and Monetary Policy of Economic Development. European Journal of Sustainable Development, [online] 10(1), p.42. doi:https://doi.org/10.14207/ejsd.2021.v10n1p42.
• Davis, L. and Orhangazi, Ö. (2020). Competition and monopoly in the U.S. economy: What do the industrial concentration data show? Competition & Change, [online] 25(1), pp.3–30. doi:https://doi.org/10.1177/1024529420934011.
• Gov.uk (2019). Competition and Markets Authority. [online] GOV.UK. Available at: https://www.gov.uk/government/organisations/competition-and-markets-authority [Accessed 11 Dec. 2023].
• Gov.uk (2020). About the CMA blog - Competition and Markets Authority. [online] competitionandmarkets.blog.gov.uk. Available at: https://competitionandmarkets.blog.gov.uk/about/ [Accessed 11 Dec. 2023].
• Gov.uk (2023). Competition and Markets Authority Annual Plan 2023/24. [online] Available at: https://assets.publishing.service.gov.uk/media/64240e7e60a35e00120cb06f/A_CMA_ANNUAL_PLAN_2023-2024_.pdf [Accessed 11 Dec. 2023].
• Januarita, R. (2021). The Newly Sole Proprietorship as Limited Liability Company in Recent Indonesian Company Law. MIMBAR : Jurnal Sosial dan Pembangunan, [online] 37(1). doi:https://doi.org/10.29313/mimbar.v37i1.7771.
• Nugroho, A.D., Bhagat, P.R., Magda, R. and Lakner, Z. (2021). The impacts of economic globalization on agricultural value added in developing countries. PLOS ONE, [online] 16(11), p.e0260043. doi:https://doi.org/10.1371/journal.pone.0260043.
• Richter, F. (2020). Infographic: Has Globalization Passed Its Peak? [online] Statista Infographics. Available at: https://www.statista.com/chart/21821/global-trade-volume-as-a-percentage-of-gdp/ [Accessed 11 Dec. 2023].
• Schooley, S. (2020). Advantages and Disadvantages of a Corporation - Business News Daily. [online] www.businessnewsdaily.com. Available at: https://www.businessnewsdaily.com/15805-corporation-advantages-and-disadvantages.html [Accessed 11 Dec. 2023].
• Statista.com (2023a). Retail Sales Value in Great Britain 2005-2021 | Statista. [online] Statista. Available at: https://www.statista.com/statistics/287912/retail-total-annual-sales-value-great-britain/ [Accessed 11 Dec. 2023].
• Statista.com (2023b). Tesco brand value 2023. [online] Statista. Available at: https://www.statista.com/statistics/1337228/tesco-brand-value/#:~:text=In%202023%2C%20Tesco%20%2D%20a%20supermarket [Accessed 11 Dec. 2023].
• Saut Maruli Tua Pandiangan, Fida Oktafiana, Santi Rohdearni Panjaitan and Mutiara Shifa (2022). Analysis of Public Ownership and Management Ownership on the Implementation of the Triple Bottom Line in the Plantation Sector Listed on the Indonesia Stock Exchange. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), [online] 5(1), pp.349–3497. Available at: http://eprints.unm.ac.id/29704/.
• Lowry, M.B. (2022). The Blurring Lines between Private and Public Ownership. SSRN Electronic Journal. doi:https://doi.org/10.2139/ssrn.4200794.