Contemporary Developments in Business and Management: A PESTLE Analysis and Porter Five Forces Model of BBC

This paper discusses the external business environment factors of BBC, including a PESTLE analysis and Porter Five Forces Model. It also explores corporate social responsibility and sustainability, and evaluates the effectiveness of the organization's response.

Contemporary Developments in Business and Management

BBC
Executive Summary
In this paper the discussion will be made on the BBC Company which is one of the largest
broadcasting companies. In the first phase of the report the introduction will be made of the
company. Also, it has been seen that company should focus on analyzing the business
environment so that growth can be attained. So, in the next phase of the report the discussion will
be made on the external factors by considering PESTLE ANALYSIS AND PORTER FIVE
FORCE MODEL. These tools will provide in-depth analysis of the factors which are impacting
the overall activities of the company in the highly competitive market. In the next phase the
theme which will be selected is “Corporate social responsibility and sustainability” and on this
theme the discussion will be made in relation to the BBC Company. The last part will be
concluding part in which the overall summary will be given.
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Table of Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................1
TASK 1............................................................................................................................................2
2.1 Pestle analysis of BBC...........................................................................................................2
2.2 Porter five forces model of BBC............................................................................................5
2.3 Organizational position and responses...................................................................................6
3.0 Task 2.........................................................................................................................................7
3.1 Analysis..................................................................................................................................7
Corporate social responsibility and sustainability.......................................................................7
Critical evaluation........................................................................................................................9
Effectiveness of the organization response..................................................................................9
Areas of improvement................................................................................................................10
Conclusion.....................................................................................................................................10
Appendix........................................................................................................................................11
References......................................................................................................................................13
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Introduction
In this paper the discussion will be made on the BBC Company. It has been evaluated that BBC
Company is known as one of the largest British broadband company. Headquarter of the
company is in Westminster, London. The company is known as one of the oldest national
company of broadcasting and it was established on 18 October, 1922 in London. The
chairperson of the company is David Clementi. The company focused on broadcasting on
television, radio and internet and also it sells its programs to the other companies in the field of
broadcasting (BBC, 2018C).
The mission of the company is to “enrich the lives of the people with the programs and services
that informs, educate and entertain them. The vision of BBC is “To be one of the best creative
companies on the global platform”. It has been observed that BBC serves its customers across
the UK through BBC Scotland, BBC wales, BBC Northen Ireland, BBC English regions, BBC
North. BBC is financed by the license fees which are given by the UK householdS (BBC,
2018C). So, in this paper the overall discussion will be made on the external business
environment factors of BBC.
TASK 1
2.1 Pestle analysis of BBC
It has been analyzed that Pestle analysis is considered as one of the external factor in context to
the overall activities of the company. PESTLE ANALYSIS is considered as one of the important
tool which should be considered by the company so that the external factors which are affecting
the growth can be analyzed. It has been noted that PESTLE ANALYSIS can help to identify the
changes in relation to the factors like political, economic, social, technological, environmental
and legal.
 Political effect
It can be noted that BBC is considered as independent and self-regulated company. The overall
company’s public sector responsibilities, functions and financial activities are managed by Royal
Charter. The Royal Charter is managed by the respective government in every 10 years. The
government has also taken into consideration the “Review of Royal Charter” as a method of
application related to control over the broadcast content. So, it has been analyzed that Thatcher
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government implemented a program in which the focus was given on absolute privatization of
the BBC in 1986. This proposal was given by the regime of “Liberalization, the competition in
the market and media convergence”. Also, in 1990’s it was also managed by the independent
producers who contribute towards the overall broadcast output in the ratio of 25% (Bressey,
2016). The government of John major also supported the overall retention of the function for the
company entry in the highly competitive market. Also, it has been noted that the chairman of the
company ensures that the company is managing the entire operation in the public interest. But it
has been noted that the interest of the advertisers were not showcased of justified in relation to
the overall actions of the shareholders. Therefore, the political policies influence the company as
the control is of the government in relation to the overall amount of the license fee given by the
households (Avery, 2016). The company has to face the government pressure as it has been
analyzed that license related to broadcasting has never considered as the problem for infinity and
also due to this the conflicts takes place. So, the overall rules set by the government effect the
overall operations of BBC.
 Economic factor
In 1980, it has been analyzed that in the British market there was drastic change and also in the
trends of the economy. The changes were seen in the organizational structure like there was a
change from the “centralization” to decentralization” in relation of mitigating the bureaucracy
which was a normal practice in those days. The overall reformation in the organization structure
was considered as one of the radical change in context to the management of economy and also
at that time the public sector was dominated. To secure the overall activities of the company, It
has been decided by the management of BBC to consider the organizational cultural change with
the objective of giving response to the shift which took place in environment and political
framework. Decentralization of BBC was also considered as one of the pivotal factor in relation
to managing the activities where cultural change was essential to attain the decentralized
structure. It has also been evaluated that BBC does not manage the entire activities on the
commercial grounds. The national and nonprofit companies are funded by the license fee of 3.5
Billion a year (Burns, 2016).
Also, due to the cost cults in the overall spending of the government, the company accepted to
maintain the license fee at the current amount for the recent years and stated that “A budget
reduction in the real framework is of 16%”. So, according to this the high income of the
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company is guaranteed and by making comparison with the other economies, it has been stated
that only Germany invested a large share of GDP into the broadcasting sector (Kousha and
Thelwall, 2017). So, it has been seen that due to the changes the overall effect has been analyzed
in the overall operating cost of the BBC Company in the highly competitive market.
 Socio cultural factor
In this context, it has been seen that BBC focused on introducing the channels for the children of
the age 12, but it is considered as one off the challenging task for the company to attract more
teenagers as it has been noted that the overall percentage of the young people who watch public
service programs has been reduced as it is impacting the overall growth of the company in the
highly competitive market. Also, the change has been seen on the behavior of the consumers in
relation to the use of new media. It has been analyzed that the internet is known as one of the
major source for the people in the daily life. By being engage on the social media sites like
Facebook, the company has been affected but BBC is focusing on reacting to this change so that
growth can be maintained in the highly competitive market (Belair-Gagnon, 2015).
 Technological factor
By considering the technological environment it can be said that there is change in the
technological aspects and also in the behavior of the customers. Due to the enhancement the
overall internet coverage on the global platform, the BBC has increased the overall coverage of
the website and now it has been viewed by more than 25 Million individuals on the weekly basis.
By considering the new technologies, in the internal process of the company it has been noted
that the company is attaining profits from the reduction in the overall distribution costs which
has been seen due to the advanced journalism opportunities with the internet. Now, due to proper
access of the internet, it can be easy to identify the news and stories that are important to be
researched. The process has been simplified and also it has enhanced the growth of the BBC
Company in the highly competitive market (Marton and Mariátegui, 2015).
In 1980, the change has been observed due to the shift in the technology. The internet has been
used for American defense technology to communicate through messages so that it maintained
the overall process of communication. In 1990, it has been observed that John Brit was the
director of the BBC Company and he focused on implementing the overall operations on the
online platform. So, in this case the impact has been seen on the overall activities as the
company was highly bureaucratic and therefore there was a fight for the resources. Brit also
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played an important role in offering leadership that brought cultural change (MacKenzie, 2017).
So, it can be stated that with the latest technologies the effect has been analyzed on the overall
growth of the company and also it has boosted the goodwill among the customers.
 Environmental factor
In context to the environmental factor, it has been evaluated that the change in the technological
and political factor has influenced the cultural change in which the company considered
“Globalization of infotainment industries”. This simply states that there is dependence of
companies on the alliances and also on the flexible form of digital production. Under the
leadership of Brit, it has been noted that the environmental factors were managed by the
company through the program funding. The decision has also liberated the producers of TV and
in this context the focus was given on the enhancement of the accountability in the jobs. The
changes in context to the environmental factors emphasized on the concept of “Marketization”
and also it focused on internal market and on the system of new trading. The internal market
was created by minimizing the subsidiaries and reconstruction of the organizational structure. It
has been noted that company also focused on new trading system which was formed by the
bidding programs in relation to the entire resources of the production. The programs also
emphasized on the agreed strategies which focused on managing the overall program of
commissioning (Van Dijck and Poell, 2015).
 Legal factor
It has been analyzed that one of the major issue in relation to BBC is dependence on the
government. The overall license fee is decided by the government and the company emphasizes
more on that factor. Also, it has been noted that the broadcasting permission is given by the
government and without the permission of the government the company is not allowed to
broadcast the news. The royal charter is in effect from January 2007 and it will be renewed in
2017 (Silvery, 2016).
2.2 Porter five forces model of BBC
 Competitive rivalries – High
It has been noted that the competitive rivalries of BBC is high. The competitors of the company
are American News channels like ABC, FOXX NEWS and Sky News as it has been seen that it
nationally compete against the competitors like CNN, ITV,BSKYB. From the overall analysis it
has been stated that BBC is still one of the largest company in the news sector with the market
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share of 40% in UK (BBC, 2018D). The competitors are also emphasizing on the strategies like
diversification and expansion of the overall distribution capabilities so that it can be easy to give
tough competition to the BBC Company (McLean, 2018).
 Threats of new entrants- low
In the new sector, the new entrants related with the new channels on TV and Radio. One of the
entry barriers for the company in this sector is related with high cost of investment as
establishment cost and brand awareness are high. There are also strict regulations created by the
government which are important to be followed like the license fee is high which is not easy for
every company to afford it. The next entry barrier is related with time as in this sector, the time is
required to earn trust and also enhance the brand loyalty so that it has been stated that BBC is
from long time in the market and attained the large market share.
 Bargaining power of Suppliers – Medium
In this the bargaining power of the suppliers is medium as the suppliers depend on the number
and volume of purchases which are made by the company. In the new sector, the suppliers are
concerned with both national and international platform. If the suppliers like Brad Pitt and Jay –
z are there then the bargaining power will be sufficient and if the supplier is local then the power
will be low (Mitchell and Stewart, 2017). So, the bargaining power of the BBC Company is
medium as they have popular and local suppliers with them.
 Bargaining power of the buyers – High
It can be said that due to intense rivalries and availability of the various sources, the buyers have
the wide range to select from. The news which is given by BBC can also be available in low cost
by the other substitutes. The paid channels also offer the cheapest package so that large market
share can be grabbed. So, BBC is free as there are many channels on national and international
platform who are offering same services at low price (Oldham, 2017). The company cannot force
the people to watch the news on their channel, so the bargaining power of the customers is high.
 Threat of substitutes – high
The major substitutions of the news sector are magazines, newspaper and social websites. It can
be analyzed that the news which is offered by the BBC Company can be easily substituted at the
low price. So that cost to switch is low but the major threat is from the social sites like blogs and
website in which the customers can also post the pictures and videos (Santiago and Kumiko,
2018). So, the threat is high for BBC as the other sources are providing the data in low cost.
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2.3 Organizational position and responses
To broadcast the digital services of BBC, the resources have to be managed according to the
latest technology and in this the major support was of the managers and producers who assisted
in supporting the investments in context to the TV and radio program that were made at that
time. Also with this the enhancement took place in the overall digital services in which the
company considered the process of Business reengineering (BPR). The process considered by
the BBC Company reduced the overall cost of the operations and also supported the agenda
related to decentralization of the company. Through this process, the impact has been seen on the
overall allocation of the resources and due to this the company attained growth in the
competitive market. The company is one of the largest companies in the news sector (Wring,
Mortimore and Atkinson, 2016). So, it can be stated that due to effective leadership the
company attained the large market share and also it has enhanced profits of the company.
3.0 Task 2
3.1 Analysis
Corporate social responsibility and sustainability
The selected theme is “Corporate social responsibility and sustainability”. It has been analyzed
that in the news sector, it is important for the company to focus on these factors so that it can be
easy to boost the market share in the highly competitive market. These factors have a major
influence on the policies and decision making in the news sector, as the main emphasis is on the
customers. In the BBC Company, the emphasis is on the factor related to corporate social
responsibility and sustainability. It has been observed that the purchasing decisions in BBC
Company are also based on showcasing the overall fairness in selecting the suppliers and not
only on earning money. The company emphasizes on boosting all the factors of diversity which
minimizes the potential effect on the environment. The main aim of the company is to attain the
highest standards of social, ethical and employment practices.
Also, proper code of ethical policy is considered which encourage its suppliers to consider the
similar principles. The policies of the company are designed by emphasizing on the factor
concerned with corporate social responsibility and sustainability. It has been observed that Policy
Statement of the company is related with ensuring the high standard of the ethical and
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environmental trade practice and in this the focus is given on the factors related to the provision
of the safe working environment and also on the safeguarding the rights of the employees in
relation to the entire supply chain. The company buy products and services on the global
platform but they focus on the code of ethical policy and they expect that they supplier to be
committed to the ongoing practices so that it can be easy to bring improvisation in the overall
environmental practices. In BBC to attain the highest standards in context to social, ethical and
employment practice the company focuses on boosting its suppliers to consider the set principles
so that business relations can be maintained. It has been noted that the political gains are related
with BBC company and it has affected continues process of the public funds. At that time to
reduce the bureaucracy, decentralization was considered as one of important aspect that helps to
focus on the social welfare. The British public has the knowledge of the bureaucratic structure
of the organization and also the analysts have doubts that the public funds will not be continued
in relation to the company who mainly depend on that aspect. Post bureaucratic company also
stated that BBC Company will give evidence that they are considered as the eligible recipient of
the overall public funds. The company always maintained its image in the market as one of the
effective broadcasting company with large market share. Also it has been evaluated that in UK
the emphasis is mainly on the digital revolution and it focuses on enhancing the overall quality of
living by connecting with Britain. The company also emphasizes that people can attain the
benefit from the cultural and social aspects and it does not exclude anyone just because of the
financial circumstances (BBC, 2018A).
The company is committed towards promoting the equality of opportunity and diversity. The
approach of the company in relation to products and services is to enhance the business relations
with the suppliers who are supporting and applying the basic principles of the company. The
company requests their suppliers to provide a written statement of the policies so that they can
implement it in an effective manner. In context to social and ethical responsibility it has been
analyzed that the basic principles and standards are considered by the BBC Company so that
their corporate social responsibility can be maintained. The ethical policy is implemented by the
company in which the focus is given on employment of appropriate workers. In this it has been
analyzed that in production of the services, there is no use of force labor and also involuntary
prison. The employees of the company will be not required to give deposits or identity papers.
The employees will be free to leave the company by giving notice. The next policy is related
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with no child or under age labor will be used. The company can only appoint the people who
meet the legal working age under the national law. The employees who are under the age of 18
will not be allowed to work. The working environment which will be provided by the company
will emphasize on safe and hygiene environment. In this the suppliers can establish an active
health and safety committee in which the employees can represent and can have active
engagement in the health and safety matters (BBC, 2018).
Also, in the policy the company stated that it is important for the suppliers to consider the local
environmental regulations. So, for this the company notifies the employees by giving notice in
writing from time to time. Also, it is important for the suppliers to focus on creating the
awareness in context to the environmental matters and to be committed towards maintaining the
overall standards of the environment. To improve the environmental standards the focus will be
given on the factors like reduction in the waste, enhancement in the process of recycling, control
on the pollution and also creating awareness to use the products which are environmental
friendly. It has been noted that BBC is also considering the programs related to environmental
awareness which it has been seen that the focus is on securing the environment. The head office
of BBC is assisted by the rainwater harvesting system and water saving toilets. The permission is
not given by the company to use the disposable cups in the offices as they have centralized
recycling point for waste. The company emphasizes on various other factors related to energy
saving lightening and also the use of the fair trade products. The company emphasizes on
maintaining and securing the environment with the motive of offering fair and ethical services to
the customers and also cultural diversity is one of the essential factor on which the company
emphasizes more.
Corporate Citizenship of BBC
The corporate citizenship rights and responsibility emphasized on protecting the individuals from
the harm and abuse that take place in relation to government, public bodies and other groups. It
is the duty to protect the discrimination by the government and employers so that it can be easy
to avail the equal opportunities. BBC worked with many local communities. It has been
examined that in Birmingham, Radio they delivered a workshop in which the focus is to
empower the young people. In this program there are more than 2000 young people who are
engaged in enhancing their practical skills which also enhanced their talent and skills. The
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company also partnered with the local companies and youth groups so that it can be easy to
enhance the talent of the young individuals. Also, BBC school report is a project which was
launched to engage the teenagers to learn new skills (BBCf, 2018).
Critical evaluation
The company also emphasized on the sustainable procurement strategy in which the focus is
given on bringing improvising in the overall efficiency in relation to the public money. It has
been observed that EC and UK government have been working on the policies and provisions so
that it can be easy to boost the publicly funded companies so that they can address the impact of
sustainability on the purchases made by the customers. So, the UK government introduced the
sustainable procurement national action plan that focuses on minimizing the waste and also it
secures the biodiversity (BBCd,2018).
CSR TRIPPLE BOTTOM LINE
 PEOPLE: It has been observed that company has six people across the BBC share. The
expectations are represented and they guide the day to day decisions. In 2014, the
corporate responsibility of the company created the doorway program. This initiative
impacted the charities and communities groups to submit their applications to work with
the BBC volunteers.
 Planet: the company continuously looks forward to serve the customers and they give
positive response to their employees, suppliers and partners. Also, in this year the
company won Outsourcing buyer of the year award. The greener broadcasting is one of
the approaches of environmental sustainability.
 Profits: The Company worked with more than 65 local partners and they emphasized on
helping the community filming to run the workshops on the safe social media. Through
this it can be easy for the company to grow and maintain the market share (BBCf, 2018).
Sustainability development that is BBC Intergenerational Fairness
It has been observed that BBC focused on the sustainable strategy in which the three areas are
considered which helps to be more environmental responsible business. In 2007 the company cut
down its building CO2 emission by 24%. Also, the company focused on working as the part of
BAFTA ALBERT CONSORTIUM. With the help of this it can be easy for the company focus
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on the environmental friendly production. BBC inspires the staff to behave in a responsible
manner towards the environment so they introduced new training programs which are developed
for the people who are working in the broadcast industry. It offers proper knowledge to the staff
in context to the low carbon economy. To maintain the sustainability, BBC also emphasized on
large scale production in the pioneer electric cars that saves the overall fuel costs and it consist of
eight tons of carbon dioxide emissions (BBCf, 2018).
Effectiveness of the organization response
It has been examined that by considering focusing on the concept corporate social responsibility
and sustainability it has been seen that company attained success in the highly competitive
market and also the large market share has been grabbed. The company spends almost 1.4
Billion per annum on the overall purchase of the goods and services. BBC emphasized on the
green issues and also they emphasized on implementing the measures to minimize the carbon
emissions and also the waste and recycling targets.
It has been observed that BBC focused on carrying out the audit of the present sustainable
procurement provision within the contracts. Through this the outcome attained by the company is
related with effective measure of the overall performance within the existing contracts and also
in the processing of monitoring them. This has enhanced the brand image of the company in the
competitive market. So, by considering the policies and by taking effective decision in relation to
corporate social responsibility and sustainability the company attained the large market share and
maintained the overall services in the competitive market. So, it can be stated that the overall
policies implemented by the company emphasized on maintaining the overall environment and
welfare of the suppliers (BBC, 2018B).
Areas of improvement
It is necessary for BBC to focus on bring improvisation in some areas so that growth can be
attained easily. The first factor on which the company should emphasize is related with training
and development. It is necessary for the company to give on the job training to the employees so
that they can get to know about the work and also in the news sector it is important for the
employees to be efficient towards work, so it can be done only be proper training. So, it can be
stated that one of the area in which the company should emphasize is related to training and
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development and it can be done by implementing effective policies and framework in the
workplace.
The next area of improvement is related with broadcasting of the news. It is important for the
company to focus on conveying the information without having a biased perceptive as it doesn’t
work with the certain audience. The company should focus on conveying the data with the
positive framework which does not affect the audience in a negative manner.
Conclusion
So, by analyzing the entire paper it can be concluded that there are various external factors which
impacted the overall operations of the company in the highly competitive market. The change in
culture, rules and policies implemented by the government and high competition level in the
market are the factors which effected the growth. To reduce the negative impact it is important or
the company to focus on maintaining the services so that it can be easy to attain the large market
share. Also, the company focused on corporate social responsibility and sustainability which also
boosted the market share. Due to this factor considered by the company it has been easy for the
company to maintain the image in the market. But there are some areas on which the company
should emphasize for improvement. Like the company should focus on training and development
of the employees so that they can get accurate knowledge of the activities and also on the way of
broadcasting news should be appealing. So, it can be stated that these aspects should be
considered by the company to attain the large market share in the competitive market.
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Appendix
Appendix 1
Figure 1
Source: Research methodology, 2018.
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Appendix 2
Market share of BBC
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Source: BBCe, 2018
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