Prudential Plc Assignment - PESTEL Analysis

The assignment provides a comprehensive analysis of Prudential Plc, including its hierarchical structure, shareholder-board director relationships, and PESTEL analysis. The PESTEL framework is used to examine the potential impact of political, economic, social, technological, environmental, and legal factors on the company's business. The report concludes that these macro factors can have both positive and negative effects on Prudential Plc's expansion and growth.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1 ...........................................................................................................................................1
A Overview of the company ......................................................................................................1
Organisation structure ................................................................................................................1
B How the company govern .......................................................................................................2
Stakeholder .................................................................................................................................2
PART 2 ...........................................................................................................................................3
Importance of PESTLE analyses ...............................................................................................3
PART 3 ...........................................................................................................................................3
PESTLE analyses of Prudential plc ...........................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES ...............................................................................................................................7

INTRODUCTION
Business environment is the sum total of all the external and internal factor which influences the
business to the large extent so the business has to keep in mind before conducting the business .
Also in the study it has explained the company prudential plc which id the leading company in
tbe us in terms of insurance and has explained the hierarchical structure and the relationship
between stakeholders and board of director. Further it has explained the importance of PESTEL
in prudential plc and external factor affect the company and its negative and positive impact on
the company.
PART 1
A Overview of the company
Prudential plc is a British multinational life assurance and financial services company and its
headquarter is in London, United kingdom. Prudentail plc is the public limited company .
Prudential plc was founded in London in may 1848. The main motive was to provide loan to the
working people and professional. Prudential plc has 26 million customers and also it is the
leading company in United Kingdom in terms of insurance. It also has primary listing on the
London stock exchange and is a constituent of the FTSE 100 Indexes in 1978. Further it acquired
the American insurer Jackson national life in 1986. In 2004 , it launched a new
subsidiary ,Pruhealth , a joint venture. In 2013 it announce to purchase of Ghana 's Express life
company also in 2014 , Prudential launched two corporate responsibility to support education. In
march 2018 Prudential announced that it would be demerge M&G Prudential from the group.
Organisation structure
Prudential plc follows Tall organisation structure as it is very effective organisational structure.
In which it has level of management . Tall organisational structure help to take decision very
easily and it improves coordination and communication between the manager and the employees
. Tall organisation structure increases the involvement of employees in the organisation(Davis,
K., 2014) . As prudential plc is the leading company in the united kingdom so by the help of Tall
structure the employees of the company are motivated and hence it works in the direction to
achieve goals.
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Prudential manage nationally by its headquarter that is located in London and from its
headquarter prudential is managing its subsidiaries. Prudential is managing and operating in
three different unit that is M&G Prudential which is created from merger of prudential uk &
Europe and M&G investment which offer pension, corporate pension schemes etc. the second
one is Prudential corporation Asia which is bases in Hong Kong and the third one is Jackson
National Life insurance bases in Michigan, United states.
B How the company govern
Prudential plc is a public sector company and also it is leading cpmpany in uk . It is manage and
governed by the board of directors and thus it is hierarchical structure . As it follow tall structure
because there are number of employees in the company so direct contact between the manager
and the employees can not be possible so it follows tall structure and also it improves the
coordination and communication between the employers and employees .
No. of board of directors – 15
Chairman – Paul Manduca
CEO – Micheal A. Wells
Executive directors – Michael Falcon , John Foley ,Mike Wells , Mark fitzpatrick CA
Non – Executive directors – Philip Remnant CBE fCA , Sir Howard Davies , Anthony
nightingale CMG SBS JP .
Stakeholder
Stakeholder is the member which have interest in the company and can either affect and affected
by the business. The role of stakeholders differ between the businesses that is rules and
regulation (Howard, S. K., and et.al ., 2015).
Relationship between board of director and shareholders – If board of director take the decision
which is not in favour of the shareholders them shareholders will not invest there money in the
company and if board of director increases the share price then shareholder will not purchase the
share of the company.
Relationship between board of director and employees – if board of director make strict rules and
regulation which are not in favour of the employees then the employee may leave the
organisation .
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Relationship between board of director and the customers – if the board of direct decides to
increase the prices of the product and services then customers might switch to new brand as the
prices they can't afford .
PART 2
Importance of PESTLE analyses
PESTLE analyses plays a great role in the business that is it help Prudential plc to grow and
extend the business. It helps the business for expansion of products and services and operating its
business in new location. It also determine the step that Prudential plc should follow for
conducting the business . PESTLE analyses help to analyse the need and want of the customers.
PESTLE analyses is key of making strategy planning which help the business to work in
effective direction . If the business wants to achieve its desire goal it important to analyses its
business external factor and then work accordingly. It helps organisation to identifying
significant changes in political, legal, social, technology, economical and environment to run
business in the smooth way. PESTLE analyses help to study the legal aspect of the business and
different policies which are enforced by the government and run the business accordingly.
PART 3
PESTLE analyses of Prudential plc
Political factor
Political factor plays a major role in the business in determining the factor that can
impact on Prudential plc in term of long term profitability in some country. As prudential is
operating in the insurance in more than twelve countries and also has taken many political risk
and deal with the policies and rules and regulation of different countries. Prudential plc has
closely analyses the political factor so that to achieve success in such dynamic life insurance.
The factor which affect are tax guidelines, political stability, employment laws and different type
of policies. Political factor have both positive and negative impact on the business.
Positive – The positive factor of political factor is that if the policies are favour to the business
then it will give the business to achieve the goals in the right direction. If the guideline of the
taxes and safety are in favour of the prudential plc then it will give positive impact to the
prudential plc(LEYVA and et.al., 2018.)
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Negative – There are many negative impact of political factor if the trade policies and pattern are
not in favour of the business then it will give a negative impact .
Economic factor
Economic factor is another factor which affect the business to the large extent and also
effect the growth and performance of the prudential plc . These include many factors such as tac
rate , fiscal policy , interest rate, inflation, foreign direct investment etc. these all factor plays a
major role in affecting the business. These factor may have direct and indirect effect a company
since it affect the purchasing power of the consumer ans also it changes the demand and supply
model in the economy (Davis, K., 2014).
Positive impact -There are various positive impact of economical factor on the prudential plc if
the economy condition are good in favour then the GDP of the country also increases and thus it
impacts on the purchasing power of the buyer and it will increase the customers of prudential plc
to buy different policies. And also prudential plc have favourable currency movement and this
translated into positive for prudential plc .
Negative impact – there are many negative impact of economic factor which affect the economy
if the rate of unemployment is increases then it will cause the negative impact upon prudential
plc as the number of policy buyer will decrease and also company suffer loss . The second
impact is that if the inflation rate is increases then it directly affects the growth and sales of
prudential plc(Davis, K., 2014. )
Social factor
Social factor also impact the business culture to the large extent. Prudential plc will
understand the customers of a given market and accordingly has to design the life insurance
industry. Social factor include attitude , preferences, culture, belief, education level and class
structure. These all factor plays a great role to affect the business so a clear study is to be done
for the need and want of the customers(Jones, T. M., Wicks, A. C. and Freeman, 2017).
Negative impact – The first negative impact is that customers are more having interest in saving
and post retirement demand as customer are less interest in taking insurance and also they are
less aware of insurance because of their educational qualification.
Positive factor – Nowadays people are more educated and they know the value plc insurance so
prudential plc will enjoy these advantage and also people are facing many types of medical
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problem so they are more concisions about there life so they are more attracted towards the
insurance.
Technological factor
Technological is fast disrupting various industries across the board. There are many
changes in the technology and innovation can affect the business to the great extent. Over the last
5 years the technology industry is growing very fast. A firm should do the technological
analyses. It includes changes in the digital marketing and also changes in the research and
development. Technological factor have both negative and positive impact which are explained
below-
Negative impact – the first negative impact is that technology impact on product offering as
technology is changing day by day so it causes the product offering of prudential plc. And also
the competitor of prudential plc are using advance technology which give pressure on company.
And also the slow speed will cause more delay in the work and which directly impact the
profitability of the Prudential plc(Barik and Kumar, 2018).
Positive impact – there are many positive impact of the technology factor as it offer online
marketing so prudential plc will promote its policies through online as online marketing of the
prudential plc is very strong. And also the launch of PRUcare mobile app has help the company
and customers that they can solve there problem on that app and also company can promote its
products.
Legal factor
Legal factor plays a major role in the business. As the firm should carefully evaluate and
do proper study on the legal factor before entering into the market. There are many legal factors
such as employment law, discrimination law, data protection law, health and safety law, anti trust
law in life insurance and overall in the country and the last consumer protection law. There are
positive and negative impact of legal factor such as -
Positive impact – If the rules and regulation are in favour of the prudential plc then it will cause
the positive impact . Prudential plc need to aware and have proper study of all the rules and
regulation and work accordingly so that it help prudential in expanding its business.
Negative impact – legal factor also impact negatively on the business as new regulatory
development in us also affect the earning of the customers and thus effect the sales of the
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business. The second negative impact is that the regulatory approval delay the decision making
and also it cause the growth and expansion of the prudential plc .
Environment factor
The last one is environment factor which becoming famous day by day. Every country
have different environment laws and liability law. US has Texas and Florida have different
liability clauses in case of disaster .
Positive impact – prudential plc strived to be an environment friendly brand and attract the
customer to the large extent with the various approaches. Also, prudential plc is fulfilling the
corporate social responsibility by giving education to other people and providing scholarships
Negative impact – Environment factor may causes negative impact because reduction of
greenhouse gas emission also cause the negative effect. Business is also nit concentrating on
environment approaches that might give a challenge to the company.
CONCLUSION
From the above study it is concluded that the structure of the Prudential plc and the management
structure and further it has explained the relationship between the shareholder and board of
directors and also it has highlighted the importance of pestel that analysing pestel it helps the
business it expansion and growth and also generate profit. Further it has concluded that various
macro factor impact the working of the business such as political factor, economic factor, social
factor, technological factor, environment factor and legal factor. In these report it has explained
the hierarchical structure.
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REFERENCES
Barik, B. and Kumar, S., 2018. Macro Environment of Indian Life Insurance Business: A
PESTLE Analysis. Bimaquest..18(3).
LEYVA, M., and et.al., 2018. A framework for PEST analysis based on fuzzy decision
maps. Revista ESPACIOS.39(16).
VÁZQUEZ, M.L., and et.al., 2018. A framework for PEST analysis based on fuzzy decision
maps. Espacios.39. p.13.
Geneva Association, 2014. The Social and Economic Value of Insurance. The Geneva
Reports. 4(1). pp.165-204.
Howard, S. K., and et.al ., 2015. Technology practices: Confirmatory factor analysis and
exploration of teachers' technology integration in subject areas. Computers & Education.
90. pp.24-35.
Chou, Y. C., Chuang, H.H.C. and Shao, B. B., 2014. The impacts of information technology on
total factor productivity: A look at externalities and innovations. International Journal of
Production Economics. 158. pp.290-299.
Jones, T. M., Wicks, A. C. and Freeman, R. E., 2017. Stakeholder theory: The state of the
art. The Blackwell guide to business ethics.pp.17-37.
Davis, K., 2014. Different stakeholder groups and their perceptions of project
success. International journal of project management.32(2).pp.189-201.
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