Impact of PESTEL Factors on Business

The assignment explores how different PESTEL factors affect Cadbury's business operations. It identifies positive and negative impacts of these factors on the company and proposes strategies to mitigate any adverse effects. The analysis covers various aspects, including technological advancements, legal compliance, environmental concerns, and more.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Overview of chosen organization................................................................................................1
TASK 3............................................................................................................................................1
Environment Analysis of Cadbury Company..............................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Overview of chosen organization
Cadbury is a multinational company which is leading in confectionery industry after
Mars. It is 2nd largest confectionery company in the world. It was established in year 1824 by
John Cadbury. Its headquarters is in London, England, United Kingdom (UK). Currently Irene
Rosenfeld is the chairman and Dirk Van de Put is the chief executive officer of the company. It
has given employment to more than 72000 employees. It serves its products at worldwide. Its
parent company is Mondelez International company (Remer, 2015).
This report will identify, discuss and evaluate the various environmental factors which
impact the business.
TASK 3
Environment Analysis of Cadbury Company
Meaning of Business Environment Analysis
Business Environment refers to the internal and external environment in which company
operates its business activities. These internal and external environment impact each other and
also they both are interrelated to each other. For the analysis of the internal and external
environment and their impact on the business, company choose strategic tool. This strategic tool
is known as business environment analysis. It is also known as Pestle analysis. It is a tool
through which company can identify and evaluate the ever changing elements of business
environment which impact the organization and their activities (Kolios and Read, 2013).
Business environment or Pestle analysis consists of six factors which are as follows -
P – Political Factors
E – Economic Factors
S – Social Factors
T – Technological Factors
L – Legal Factors
E – Environmental Factors
Environment Analysis of Cadbury Company
Environment analysis of Cadbury company are as follows -
Political Factors
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Political factors are those factors which are related to the various government policies
related to the business. It includes trade restriction policy, government policy, political stability,
foreign trade policy, tax policy and monetary policy etc.
Positive Impact – Government impose new policy regarding amounts of sugar in the products
which lead company to reduce the sugar amount which increase the demand for Cadbury sugar
free products.
Negative Impact – Government of many nation changes in their tax policy which impact the
company's payment and investments decisions which lead to negative impact of company's
profitability.
To reduce the negative impact of political factors, Cadbury should know about the
political systems, political parties and their views of multinational companies.
Economic Factors
Performance of economy and economic conditions of the nation comes under these
factors. Example of these factors are such as inflation rates, exchange rates, demand & supply
pattern and interest rates etc.
Positive Impact – There are various nations in which Cadbury expands and operates its business
successfully due to positive economic conditions.
Negative Impact – Economic crisis at global level impact the sales and profitability of the
company.
To reduce the negative impact of economic factors, Company should evaluate its
financial analysis and oversee the overall impact of global conditions on the financial conditions
of the company (Cadle, Paul and Turner, 2014).
Social Factors
There are some factors which is related to the societies' values, cultures, religions, race,
lifestyles and perception etc. which impact the company. These factors are known as Social
factors. Example of social factors are Cultural trends, demographics, population, lifestyles etc.
Positive Impact – Due to Cadbury's products, the consumption of alcohol reduces which helps
societies to live healthy life.
Negative Impact – Due to increase the obsession of chocolates in children and adults, Cadbury
has to face a lot of backlashes from all over the world.
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To reduce the negative impact of social factors, Cadbury should focus and respect the
cultures, religions and values of societies (Paul, Yeates and Cadle, 2014).
Technological Factors
Technological factors are directly related to the company because company is highly
depend on the technologies. By the use of these technologies, company is able to do mass
production. Thus, change in technological factors impact the business.
Positive Impact – Due to technological advancement in manufacturing, Cadbury is able to give
their chocolates products a different shapes which helps company to attract more customers at
worldwide.
Negative Impact – Online presence of Cadbury is not up to mark as compared to its
competitors.
To reduce the negative impact of technological factors, Cadbury should upgrade its
technologies with time to time.
Legal Factors
Those factors which is related to all the legislations (whether it is employment or
commercial) which is imposed on company are come under the legal factors. Example of legal
factors are Equality Act, Contract Act, Company Act, Health and safety at workplace etc. Act
etc.
Positive Impact – Company is serving its products at worldwide which lead company to follow
so many rules, regulations and laws which strengthen the brand image of the Cadbury because
Company follows every legislations with sincerely.
Negative Impact - There are various nations in which company is operating its business. In all
these nations, company has to follow various environmental, manufacturing, employment and
commercial law which lead company to bear a lot of costs.
To reduce the negative impact of legal factors, Cadbury should understand and follow the
related laws.
Environmental Factors
All those factors such as weather, climate and environmental offsets etc. are come under
the environmental factors which is related to the environment and impact the industry (Ho,
2014).
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Positive Impact – Cadbury is slowly using eco friendly packaging. The package of cadbury is
now becoming recyclable which reduce the wastage of materials.
Negative Impact – Cadbury is using plastics for their packaging which impact the environment
by emission of carbon dioxide.
To reduce the negative impact of environmental factors, Cadbury should focus on their
corporate social responsibility activities.
CONCLUSION
From the above study, it has been summarized that there are various factors which impact
the business positively and negatively. Through business analysis, company can analysis and
evaluate the extent though which these factors impact the business and try to reduce the negative
impact of factors on the business. Thus, Business analysis is a most important and useful tool for
the company in today's dynamic environment.
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REFERENCES
Books and Journals
Remer, L., 2015. Cadbury Report (UK) and Corporate Social Responsibility (CSR).
Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European
academic research. 2(5). pp.6478-6492.
Paul, D., Yeates, D. and Cadle, J. eds., 2014. Business analysis. BCS, The Chartered Institute for
IT.
Cadle, J., Paul, D. and Turner, P., 2014. Business analysis techniques. Chartered Institute for IT.
Kolios, A. and Read, G., 2013. A political, economic, social, technology, legal and
environmental (PESTLE) approach for risk identification of the tidal industry in the United
Kingdom. Energies. 6(10). pp.5023-5045.
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