Business Environment: Factors, SWOT Analysis, SMART Objectives and Recommendations

This report discusses the macro environment factors and their impact on business operations, SWOT analysis and its interrelationship with external factors, SMART objectives and recommendations for London EV Company Ltd.

Business
Environment

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.Macro environment Factors with their positive & negative aspects in business operations.3
2. SWOT analysis and its interrelationship with external factors..........................................5
3. SMART objective and Recommendations for a company.................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

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. The report covers the external factors that affect the profitability as well as
productivity of an organization. With this, SWOT analysis framework is going to use to analyze
threats, strength and weaknesses so that improvements can be done rapidly. Later, it covers
SMART objective of the chosen organization that helps them to improve in their services and
gain competitive edge at marketplace.
TASK 1
1.Macro environment Factors with their positive & negative aspects in business operations.
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.
It consist of elements such as employees, supporting services, competitors and so on. These
factors help companies to attain the overall objective and goals(Hillary, 2017).
Internal factors- Those factors which impact the environment and culture of the
organisation. Internal factors directly affect on the activities & operations of a company.
Changing in these factors directly lead to change in structure and strategies of a company. The
main internal factor that helps an organisation to attain objective is Employee. The overall sales
and profitability of a company depends on skills and talent of an employee.
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.
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

external factors on the activities of organisation. Below is the description of these factors in
relation to London EV Company limited:
Political: Those factors on which government interferences is taking place and impacts
on the functions of a company. It involves political stability, tax rates, policies, tariffs and many
more. In context to London EV Company Limited, the company is operating in UK and want to
expand in other locations of UK. The political stability of United Kingdom is good and the
government is helping businesses to reduce the effect environment on organisations. In addition
to this, the company has to follow all the policies which is related to production of Emission
vehicles on the country (Niemann-Struweg, 2014).
Positive: The political factors help companies to form effective strategies and reduce the level of
issues which rise from politics.
Negative: The Company is facing lot of hurdles while following all the rules & regulations of
UK government.
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.
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.

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.
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.
Environmental: It includes change in weather, climate, atmosphere and so on. Change in
these factors impacts the efficiency of an organisation. In context to London EV Company, the
company uses environmental friendly goods while manufacture car so that they can contribute
and improve the environment condition of the country.
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(Sodeyfi, 2016).
2. 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. London EV Company Limited provides quality goods to its
customers as it helps company to build loyal customers for linger time and raise
sales(Ketata, Sofka and Grimp, 2015).
 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. The people of UK like to invest in modern
technologies as they have the chance to attract people with their innovative cars and
increase sales & profitability. United Kingdom renowned as 2nd largest car manufacturer
country in the world as company have the advantage to attract large audiences from other
country also and thus raises profitability.
Threats: Competitors such as McLaren, Land Rover, Bentley and Daimler is the most leading
companies in UK and the biggest threat for the company. The strategies of these competitors are
different and unique through which customer attract towards their brands. The amount that
company invest in expansion may go on waste if the managers did not build effective strategies
and gain market position(Sinay, 2014).
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:
Effect of macro and environmental factors on company:

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(Fernández-Olmos and Ramírez-Alesón, 2017).
 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.
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.
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.
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(Shi and Wu, 2017).
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.
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.
3. SMART objective and Recommendations for a company.
SMART Objective:
In the present context of London EV Company Limited, it has been said that company is
doing its business functions in an effective manner within the marketplace. It has been identified
that the company chosen in this report is a car manufacturing company which requires regular
basis innovation for maintaining their sustainability for a long period of time at the
marketplace(de Loë and Patterson, 2018). Along with this, In order to gain more profitability at
the competitive market, management team need to develop some strategies and policies so that
they will be able to gain positive outcomes. Some of the most essential SMART Objective is as
follows:
 Management team of London EV Company Limited decides to expand its market share
by 12% within next 2 year.
 Furthermore it is also decided by the managers to produce innovative products and
services so that they can enhance their profitability by 20% within next 1 year.
 In addition to this, one more objective of the company is that they decide to reduce usage
of chemicals while manufacturing products which help them in securing the overall
environment of the country.
In order to fulfil all these objectives, management team need to develop plans and strategies
according to the changing situations so that they will be able to beat the competition and
accomplish all there goals and objectives within given time frame. For this there are some

recommendations given to the managers while doing their business functions at international
marketplace(Li, 2019).
All these recommendations are given to the managers after examining all the internal as well as
external factors which have influence over the profitability and performance of the company.
Some of these recommendations might help businesses in order to satisfy their needs and wants
of consumer available at the marketplace.
 First and the most essential recommendation given to the management team of London
EV Company Limited is that before launching new product at international market,
examination of market area is required by them so that positive outcome will be
produced. With the help of examining all the external factors, managers will be able to
produce goods which satisfy the needs and wants of consumer.
 On the other hand, it has also been suggested to the managers that they should perform all
the operations in an ethical manner and adopt all the legal as well as governmental
regulations in an appropriate manner. This will help them in retaining their employees for
a long period as well as attracting new customers towards the company.
 At last, while doing business expansion it is necessary for the management team of
London EV Company Limited to provide training and development session to their
existing staff members so that they will produce high quality products according to the
requirements and demands of customers. Therefore, it will assist them in grabbing
attention of large number of people towards the company.
CONCLUSION
From the above study it has been concluded 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. The
employee’s plays vital role in survival and success of the company as the productivity and sales
of company depend on the skills of workforce. SMART objectives are developed by the
company to expand their operations and attain objectives within stipulated time.

REFERENCES
Books&Journals
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business conditions. Journal of Economic & Management Perspectives.10(2). pp.146-150.
Ketata, I., Sofka, W. and Grimpe, C., 2015. The role of internal capabilities and firms'
environment for sustainable innovation: evidence for G ermany. R&d Management. 45(1).
pp.60-75.
Sinay, J., 2014. Safety management in a competitive Business Environment. CRC Press.
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Shi, X. and Wu, Y., 2017. The effect of internal and external factors on innovative behaviour of
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de Loë, R. C. and Patterson, J .J., 2018. Boundary judgments in water governance: diagnosing
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