Business Environment: Key Issues, PESTLE Analysis, Impact on Business, Challenges and Reflection

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
Key issues affecting the automobile sector.................................................................................1
Implication of PESTLE analysis.................................................................................................4
TASK 3............................................................................................................................................5
Impact of issues on business ......................................................................................................5
TASK 4............................................................................................................................................6
Challenges and Reflection .........................................................................................................6
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment is a combination of internal and extremal factors which directly
impact over organisational decision making process as well as its productivity ratio. However,
understanding the environment within which an organisation operate its business function is
importance and significant. in order to accomplish the desired goal or objective in an effective
manner. Moreover, business environment enable an establishment to identify its potentiality or
capability so that they can grab all available opportunity in order to face all sort of challenges an
threats in an trenchant way (Aithal, 2017). This report is based on automobile sector which is
one of the highly growing sector within UK market as it mainly deals in designing, development,
manufacturing , marketing and selling of motor vehicles. In this study, it involves identifying
issues which effect automobile sector, application of PESTLE analysis in order to examining the
business environment. Finally, determining the effect of issues on organisation and develop
reflection for improving the overall firm's performance.
TASK 1
Key issues affecting the automobile sector
Automobile industry comprises large number of companies and organization who are
involved in the process of manufacturing, designing, developing, marketing motor vehicles,
motorcycle. As per recent study of current marketplace, it has been identified that automobile
division is one of the world's important economic sector in terms of revenue. Hence, present
world is wholly grounded over the concept of globalization which impose positive and negative
impact over companies and industries. However, it render enormous opportunity to enhance the
market and at the same time it brings different challenges which directly influence enterprise
decision making. Hence, in relation to UK automobile industry, it has the most productive
automotive labor market within the EU catering to strong domestic and export demand. Along
with this, it has regarded that automobile division plays a significant role in the enrichment of
UK as it generate more than £82 billion turnover and adding £18.6 billion value to the UK
economy (UK Automotive, 2019). However, due to the intense level of competition and rivalries
among companies, it make UK automobile sector more challenging and competitive that
influence its productivity ratio. Henceforth, there are some key issues which effect UK
automobile sector are explained below:

Changes in demography: The aspect of demography encompasses size, structure,
population, age, gender, income level and so on which has huge influence over company's profit
margin. Hence, customer demand and preference varies as per the fluctuation in their income
level which impact greatly over automobile industry's productivity and sales performance.
However, when population income increases it directly reflect in the growth of company's sales
and vice versa. However, UK automotive division are benefited from stable government which
help them to maintain their volume of sales and brand value among competitors. Therefore,
automotive sector of UK takes an initiative to determine the condition of population lifestyle and
demand so that they can take corrective course of action in order to capture the attraction of wide
range of population towards brand.
Illustration 1: Contributions of the motor industry to the UK economy from 2009 to 2018(in
billion GBP)