Business Environment

This presentation discusses the impact of external and internal factors on the overall goals and objectives of a company in the business environment. It explores the PESTLE framework and SWOT analysis to measure threats and opportunities. The presentation focuses on London EV Company Ltd as a case study.

Business Environment

Cover Content
•Introduction

Introduction
The external as well as internal that affects the overall objective and performance of an organization is termed
as Business organization. Factors like current trends, environment condition, customers, suppliers, technology
and many more factors is the part of Business organization. It assists company in identifying business
opportunities and optimally utilizes its resources (Botha, Kourie and Snyman, 2014). In this current report,
London EV Company Ltd is chosen as a base company. The company head office in UK and founded in year
2013. The objective of company is to enhance its business of car manufacturing within UK that is in other cities
of UK.

Macro environment Factors with their positive & negative
aspects
• Micro factors- These factors impacts the overall decisions, strategies as well as performance level of
an organization. It affects the business of individuals with the change that takes place in external
environment whether it is alteration in strategies, capacities, resources and many more.
• Macro environmental factors- These factors have both negative and positive aspects on which an
organisation does not have any control. In order to analyse the impact of these factors it is important
to understand trends which is prevailing in market.

Cont.…
I
In order to analyse macro environmental factors, the manager
of the company uses PESTLE analysis framework. It is a
technique that attains organisation to know the affect of

Cont.…
• Economical: The economic conditions, buyer’s willingness, market trends affect the overall business
performance of accompany. With reference to London EV Company Limited, the economic conditions
of UK have gone down when BREXIT takes place in the economy. The purchasing power is adversely
affected of the people of UK.
• Positive: Rising in the economic conditions of United Kingdom will directly impacts on the sales of the
company as the buying power of customer’s s increases.
• Negative: If economic condition is not improved then the money as well as time which is spent in
manufacturing of cars is going on waste. Thus, the sales of London EV Company Limited decline
adversely.

Cont.…
• Social: The culture, customs, norms, beliefs, opinions ad values of a society directly affect the
performance of an organisation. Change in these social factors alters the strategies of a company. It is
important for company to consider all social factors while expanding its function on other countries.
• Positive: The people of society prefer to change their as per the new trends. This increases the sale of
emission vehicles of company.
• Negative: change in market trends and social trends of the people of society might force people to shift
towards another substitute.

Cont.…
• Technological: Nowadays, people prefer to use advance and upgrade technology. Companies need to
adopt innovative technologies so that they can gain success in the market and raise their market
position. In context to London EV company Limited, the people of UK like to invest on those things
which is new and innovative in market (Cairncross, 2014).
• Positive: Adoption of new technology by the people of UK positively affect in sale and profitability of
London EV company.
• Negative: It is expensive for company to use modern technology in manufacturing process which
increases the cost of London EV company Limited. With this, the revenue of company declines.

Cont.…
• Legal: Every country has different legislations which companies need to follow in order to abide by the
law. In context to London EV company, the upper level authorities follow all the laws which is related
to expansion of business so that they cannot face any hurdles while implementing its operations. With
this, Legal policies is also considered by the company.
• Positive: The positive effect of legal factors on company is it raise the standard of company and also
considers passenger safety.
• Negative: Change in the Laws of UK government due to BREXIT might affect and change existing
polices of company. This will take time as well as cost of the company.

Cont.…
• Environmental: It includes change in weather, climate, atmosphere and so on. Change in these factors
impacts the efficiency of an organisation
• Positive: The vehicles of company have low utilization of fuel or low emission which attracts many
audiences to purchase its car. Therefore, the sales level of company increases.
• Negative: If the company did not follow all the laws of environment then they are imposing with heavy
penalties which affect the revenue level of company. The government of UK is very strict and charge
heavy penalties from the company

SWOT analysis and its interrelationship with external factors.
• Internal analysis plays an crucial role as it helps company to know their weaknesses and strength so that
they can improve their strategies and achieve objectives on time. With this, it also helps to identify
opportunities & Threats that affects from the external market. This framework is important to analyse
so that organisation can compete in market with effective plans as well as strategies. The SWOT
analysis is described with relation to London EV Company Limited:
• Strength: The company facilitates in many services such as Taxi designing, designing structure of
body, Distribution & sales of car parts and many more. Therefore, the market of the company is high

Cont.…
• Weakness: The company presence in market is less as it needs to invest heavily on the marketing
activities of the organisation. In order to do expansion, there is a requirement of heavy investment
as it may be financial loss also if company does not get success in the market.
• Opportunities: London EV Company Ltd has the opportunity to expand it market globally and
earns high market share.
• Threats: Competitors such as McLaren, Land Rover, Bentley and Daimler is the most leading

Interrelatedness between strength & weaknesses with the
external factors.
It is essential for every company to analyse internal & external factors that affect its performance as well
as efficiency. It assists in identifying opportunities so that company can grab them and gain success. In
addition to this, these factors help company to overcome with the threats and reduce the level of risk.
There is interrelation among external & internal factors which is mentioned below:

Cont.…
• Political impact-
• Strength: The government of United Kingdom support companies to expand their business globally.
With this, they can help and provide them market to expand operations. The barriers of company are
minimized and it turns an opportunity for company as their risk is reduced.
• Weakness: Entry of BREXIT affects the political conditions of the economy which also effect the
business of manufacturing industry. The political barriers also impacts adversely on car industries such
as tax regulations.

Cont.…
• Economical impact-
• Strengths : The economic conditions of UK is good that helps company to increase its profit margin.
With this, the buying power is high of people of UK which assist ain increasing sale.
• Weaknesses : Due to recession the sales of leading companies decline. Therefore, there is a possibility
that sales of London EV Company Limited declines. In addition to this, the productivity of employees
also decreases.

Cont.…
• Social impact
• Strengths : There is a enhancement in disposable earning of population of UK, spending of people is
increases and they prefer to buy luxurious cars which further increases their status in society. With this,
the sale of car manufacturing company London EV is increases which in turn raise profitability.
• Weaknesses : Change in the customer requirements directly impact on the selling of company. As the
company did not analyse their customer needs in current scenario when planning for expansion on other
cities of United Kingdom.

Cont.…
• Technological impact
• Strengths : People prefer to use innovative technologies which has increases the demand of electric
cars in UK. Therefore, the sales of London EV raises in the market..
• Weaknesses : Change in technologies rapidly force car manufacturing companies to change their
process of car manufacturing. Due to this, the company needs high investment and the profit declines.
The competitors may use new technologies or being new idea in the market before London EV
company adopt

Cont.…
• Legal impact-
• Strengths : By Following all the legislations the company builds a strong brand image which further
increases its sales and position in market. London EV company is adopts all laws of the country.
• Weaknesses : The laws & policies of every country is different so that companies need to alter them.
As takes time and money of the company.

Cont.…
• Environmental impact-
• Strengths : By using sustainable energy and environmental friendly raw materials in car
manufacturing, the company makes positive image in the mind of customers and increase their overall
performance.
• Weaknesses: The government of UK is strict as it imposes high penalties when all the laws which is
related to the protection of environment is not followed by company.

Conclusion
On the basis of above stated PPT, it has been analysed that external and internal factors affect the overall
goals and objectives of the company. PESTLE framework assist companies to measure threats &
opportunities and thus help to expand their operations effectively. In addition to this, it reduces the level of
risk as the large amount is invest by company in manufacturing of cars and in set up of new business. Most
of the companies use SWOT analysis to gain knowledge about weaknesses and strength so that they can
increase their market share and reputation

REFERENCES
• Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business
environment: Knowledge management and knowledge management technology. Elsevier.
• Hillary, R., 2017. Small and medium-sized enterprises and the environment: business imperatives.
Routledge.
• Niemann-Struweg, I., 2014. An integrated communication implementation model for the post-2000
business environment. Public Relations Review.40(2). pp.184-192.

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