Business Environment: Factors, Analysis, and Interrelationship

This presentation explores the macro environment factors and their impact on business performance. It discusses the SWOT analysis of London EV Ltd and the interrelationship between strengths, weaknesses, and external factors. It also examines the influence of political, economic, social, technological, legal, and environmental factors on the business environment. The presentation references Hamilton, L. and Webster, P. (2018). The international business environment.

Business Environment

Cover Content
• Introduction
• Macro environment factors along with their positive and negative impact
• SWOT Analysis
• Interrelationship between strength and weaknesses along with external factors
• Conclusion
• References

Introduction
Business organization includes both internal and external environment which
influences the whole performance of the entity. Some of the elements such as
customers, current trends, technology, suppliers, environment condition and so on
are the part of organization. In reference to the present report, the base organization
is chosen as London EV Ltd. The head office of the company is located in UK and
is established in 2013. The main aim of the organization is to improve the business
of the manufacturing car among UK.

Macro environment Factors with their positive & negative
aspects
Micro factors- It refers to the element which influences the whole decisions
making process, strategies and performance of a business organization. It
includes some factors which are competitors, staff members, supporting
services and many more. These are the factors which assist business
organization in order to accomplish their goals.
Macro environmental factors- Such factors have negative as well as positive
aspects where companies do not have any kind of control. For examining the
influence of such factors it is essential to know the trends available at the
marketplace.

Cont.…
For examining macro environmental factors, management team of the company adopt
PESTLE analysis which are going to be discussed as follows:
Political: It refers to the factor which includes governmental interferences and highly affect
the business operations. In reference to London EV Company, it has been said that they
want to operate its business functions in UK. The political stability is good as well as the
government assist in minimizing the impact of environment on the business organisations.
Positive: It assist business entity in order to form strategies as well as policies and eliminate
the issues which arise due to politics.
Negative: The organization is facing ample number of hurdles when they need to following
rules formulated by UK government.

Cont.…
Economical: In reference to London EV Limited, it has been identified that
economic situation of UK reduces when BREXIT takes place. Therefore,
buying power of the customers get influenced in a negative manner.

Cont.…
Social: Modifications in the social elements requires to change the
strategies so that they can perform their functions in an effective manner.
Positive: The individual of the society prefer modifications according to
the changing environment which enhance the sales of vehicles of the
organization.
Negative: Regular modifications in the market trends as well as social
trends might affect the whole functionality of the company.

Cont.…
Technological: In relation to London EV Limited, individual of UK invest
money in new, unique and innovative things available at the marketplace.
Positive: Up gradation of technology helps in attracting large number of people
towards London EV company.
Negative: It refers to the most expensive manufacturing procedure which raises
the overall cost of London EV company Limited.

Cont.…
Legal: Higher authority of London EV company, follow all the legal
policies and strategies associated with the expansion of business organization.
Which helps them in gaining positive response at the new marketplace.
Positive: it increases the standard as well as good will of the company.
Negative: Modifications in the legal provisions due to BREXIT highly
influence the overall performance of the company.

Cont.…
Environmental: Management team of London EV Company adopt
environmental friendly raw materials while manufacture car in order to
enhance the condition of the whole environment.
Positive: The products of the company consume low fuel which highly
attracts large number of audiences at the marketplace.
Negative: If the organization did not adopt the laws then they need to give
high penalties which influences the overall revenue of company.

SWOT Analysis
SWOT analysis is a framework that is used by company in order gain an insight
about the weaknesses and strength of company. In addition to this, it also
assist in identifying opportunities as well as Threat that has influence on
performance of organisation (Luiz, Ganson and Wennmann, 2019). The
SWOT analysis is given below in relation to the London EV company:

Cont..
Strength Weaknesses
 The company offer high quality product in
market that assist in building loyal
customer and retain them for longer time
frame.
 The company has high market share as it
involve in distribution and sales of car
parts, taxi designing, automobile structure
designing and many more.
 One of the major weakness is London EV is
still not able to reach globally so it is required
to invest on marketing activities that occur
cost to company and decline profit margins.
 London EV is not having advanced
technology and due to this their process is not
updated as compare to its competitors.

Cont..
Opportunities Threats
 The company have the opportunity to
expand its business activities globally that
leads to increase in profit and market
share as well.
 London EV has the opportunity to produce
innovative car as it is determine that
people of UK is prefer to buy products
which is new and innovative at market
place. This will help company to increase
 One of the major threat is competitors such as
Land Rover, McLaren and many that impact
on their performance level.
 The management team of company is not
able to develop effective strategies due to
which company is not able to attain
competitive advantage at marketplace.

Interrelatedness between strength & weaknesses with the
external factors.
It is important for an organisation to identify internal and external factors along with their influence on
performance of company. This will help company to grab the opportunities and decline the level of risk
that leads to attainment of success and growth. The interrelation between external factors and strength &
weakness is discussed below:

Cont.…
Political impact-
Strength: The UK government is politically stable and support organizations to
enhance their business activities globally (Hamilton and Webster, 2018). It
will help London EV to take advantage of it and enhance their profitability
level.
Weakness: Due to Brexit, the political condition of UK slow down and impact
highly on the manufacturing industries. In addition to this, it affect on car
manufacturing companies as the tax charges is increase by the government.

Cont.…
Economical impact-
• Strengths : The income level of people living in UK is high that leads to
increase in sales of London EV. In addition to this, it help company to gain
higher profit and increase their market share.
• Weaknesses : There is a possibility of decline in sales of London EV due to
recession that has negatively influence on productivity of company.

Cont.…
Social impact
• Strengths : There is increase in disposable income of people in UK and they
prefer to buy luxurious goods in order to increase their status in society. This
impact positively on sales and profit of London EV.
Weaknesses : There is changes take place in the taste and preferences of customers
and effect on the selling of organisation (Kozubikova, 2019). It is important for
managers of London EV to analyse customer requirements and market trends in
order to maintain its sales and gain success at marketplace.

Cont.…
• Technological impact
• • Strengths : The demand of Electric cars is increases as people prefer to use
innovative and new products coming in market. It has positive influence on the
market share and profit of London EV.
• • Weaknesses : Technology is changing rapidly and therefore it is important
for companies to use new and advanced technology in order to sustain in market.
it occur high cost to company due to which the profit margin of London EV may
declined.

Cont.…
Legal impact-
• Strengths : By adopting all the legal policies it has been identified that
company creates a strong image at the marketplace which increases their
sales.
• Weaknesses : The legal provisions of every nation is quite different so
companies requires to modify them according to the changing situations. This
requires time, cost as well as effort.

Cont.…
Environmental impact-
• Strengths : With the help of eco friendly raw materials, management team of the
organization creates positive image which enhance their whole performance.
• Weaknesses: UK government is quite strict and charges penalties when these laws
are not followed by the managers of company.

Conclusion
From the above study, it is determined that it is important for an organisation to
analyse both external as well internal factors affect on their performance and
productivity level. PESTLE analysis is used by company in order to gain an
insight about the impact of uncontrollable factors that is macro environmental
factors on the performance and activities of company.

REFERENCES
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University Press.
Kozubikova, L., and et, al., 2019. THE IMPACT OF POLITICAL FACTORS'PERCEPTION ON
SUITABILITY OF INTERNATIONAL BUSINESS ENVIRONMENT: THE CASE OF STARTUPS.
Economics & Sociology, 12(1), pp.61-366.
Lu, Y., Wang, H. and Xu, X., 2019. ManuService ontology: A product data model for service-oriented
business interactions in a cloud manufacturing environment. Journal of Intelligent Manufacturing,
30(1), pp.317-334.

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