Importance of PESTEL Analysis for Hilton Food Group Plc

This document discusses the importance of conducting a PESTEL analysis for an organization, specifically focusing on Hilton Food Group Plc. It examines the governance and structure of the company, and evaluates the external environment using the PESTEL framework. The analysis covers political, economic, social, technological, environmental, and legal factors that influence the company.

Business
Environment

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INTRODUCTION
Business Environment is a combination of several internal as well as external factors like
staff, consumer desire, taste and preferences, supply & demand, customers, traders, stockholders,
government bodies etc (Cepel and et.al., 2019). These factors influence the operation of the
organisation and the manner in which the organisation functions intentionally or unintentionally.
The amount of these factors affects the atmosphere and the condition of companies or corporate
entities. Hilton Food Group plc is selected for the better understanding of business environment
concepts. This company deals in food packaging business and listed in London Stock Exchange.
This assessment based on the PESTEL analysis that why it is important for the organization and
how it helps the organization to identify key driven factor which shows potential opportunities
and threats.
MAIN BODY
TASK 1
Examine how your chosen company is governed and structured
Overview of selected organization:
The Hilton Food Group plc was founded in 1994 to manage a beef and lamb central meat
packing facilities in Huntingdon. This was the target of even an initial public offering in May
2007 that priced the company at about £105 million. The company also purchased Seachill, a
provider of frozen and chilled salmon, in November 2017 (Chukhray and Mrykhina, 2018). The
company has six plants and sells its goods in supermarkets in 14 countries across Europe. Hilton
Food Group plc has a joint venture in Australia with Woolworths Chain, a retailer, to conduct
meat processing operations for its shops, and a partnership in Portugal with Sonae Modelo
Continente, another retailer, supply packaged meat for its retail outlets.
Describe the organizational structure:
In Hilton Food Group plc, there are total seven directors in the board and from it, three
are executive directors and remaining four is non-executive directors. Philip John Heffer is the
Chief Executive Officer (CEO) of Hilton Food Group plc and Robert Watson is the Chairperson
of the company. CEO and Chairperson of the Hilton Food Group plc both were appointed in
2018 in the organization. Philip John Heffer who is CEO of the company also the part of board
member as executive director and Chairperson also the member of executive director board.
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Remaining executive director name is Nigel Majewski and the non-executive directors names are
John Graham Worby, Christine Cross, Angus James Porter, Dr. and Rebecca Ann Shelley. They
all are appointed and elected in 2016, 2016, 2018 and 2020 respectively.
The organisational structure is a process that describes how several tasks are oriented to
achieving the objectives of the firm. These tasks can cover the laws, roles and responsibilities. It
is also defines how knowledge flows between the levels of the business. Below mention
organizational structure of Hilton Food Group Plc provide better understanding regarding flow of
communication they have to share information from top to bottom level.
Figure 1Organizational Structure, 2019.
Directors agree that Hilton Food Group Ltd is well positioned to expand on its good
customer engagement by engaging in new projects, either by product growth or product design in
existing market and by collaborating with consumers in their overseas plans to expand. The
Directors claim that the launch of Hilton 's activities in Ireland is a perfect example of how
Hilton 's experience in central meat packaging can be shared with current customers in various
territories. The Directors agree that Hilton is well placed to keep growing its operations
including its current customer base of big global food retailers. Hilton works very closely with
all its consumers to build and broaden the range of items it provides (Gaganis, Pasiouras and
Voulgari, 2019). The versatile supply and distribution chain of the company makes it reasonably
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easy to introduce new production lines, taking full advantage of consumer-led developments
including the rise of barbecue items.
Over the period to December 2014, Hilton Food Group Plc have continually spent in all
aspects of their sector, from raw resources procurement, packaging materials layout, improved
processing and storage quality, and an upgrade of their IT facilities. Over the course of this time,
capital expenditure amounted to nearly GBP 200 million. Hilton operates these services at the
excellent technological level allows for successful operations that enable high volumetric usage,
ensures that Hilton intends to support quality and maintain cost competitiveness. Hilton
continues cost-reduction programmes around the Group , resulting in savings exchanged between
Hilton and its customers, enhancing customer loyalty and boosting benefit of higher quantities.
TASK 2
Evaluate the importance of carrying out PESTEL analysis for an organisation
A PESTEL model is a methodology or technique used by organisations to evaluate and
track macro-environmental such as external marketing factors which affect the company
(Importance of using PESTEL analysis, 2020). It is also very beneficial to carry a PESTEL
analysis before starting their own business or if wanted to expand their existing business. It
provides the strong indication of the impact of the attribute on their business, based on the sector
that they decide to set up a business in which currently operating. With the help of PESTEL
analysis, company able to identify the legal or political norm that they should comply within
organization.
The importance of PESTLE research includes the cost-effective, offering deeper insides of
industry, awareness to risks, and a policy for exploiting opportunities. Researchers are going to
get more details about each. Importance of carrying out PESTEL analysis in context of the
organization is discussed below:
 Cost effectiveness: The first and only cost for PESTLE analysis is time period. Although
additional programmes can assist to coordinate input and feedback, PESTLE analysis can
be done with a simple reaction or notepad or pen (Hamilton and Webster, 2018). The
PESTLE analysis is indeed simple. The number of work they need, how often time and
how often they do PESTLE analysis for the business is possible. But the expense of any
degree of study is not subject to variability. Best of all, anybody can do a PESTLE
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analysis. Whereas a team can deliver better results, a person can still conduct this
research effectively.
 Deeper understanding: In the absence of PESTLE analysis, the environments
factors that influence the company could go ignored. For example, when creating a
product model, protection and consumer regulations can be ignored. Even though, it may
not be informed of a technological difficulties that people consider in rural areas
compared to consumers in highly populated regions. Or, even if the item is performing
well with its current environment, exporting to another side of the globe might be a big
failure. PESTLE analysis is essential to initiate with a variety of particular and unique
factors that could have an impact on the performance of the new product. It encourages
the development of planning in order to obtain a deeper understanding of business
planning.
 Alternate development: Though PESTLE, anyone can used to evaluate companies in a
wider sense, it can also be used for particular goods, marketing campaigns and customer
relationships. Especially when used in new technologies within the business, PESTLE
analysis may raise insight into potential risks (Khajeheian, Friedrichsen and Mödinger,
2018). Whether it was an established competitor, an emerging competitor, or inside the
own goods. The PESTLE analysis offers an opportunity for enterprises to analyse
behaviour in depth and to develop a plan to minimize and all changes in profit or damage.
Now without this model, the organisation would have been hit by it being an unwelcome
threat. For example, if they learn there will be a 15% increase in population in a certain
region, it could be great for business. But if the population of elderly people is growing
or company target demographic people age between 20 to 30, this could be a chance to
achieve a new audience for a product.
TASK 3
Use the PESTEL framework to analyse the external environment of your chosen company
List of PESTEL factors that influence the environment of selected company:
Political factors Economic factor
 Political stability
 Changing policy
 Economic development
 Inflation rate
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 Protest / pressure group and
government system
 Bureaucracy and corruption
 Taxation
 Employment rate
 Exchange rate
 Labour market
 Financial market efficiency
Social factor Technology factor
 Demographic trend
 Equity and power distance
 Gender roles
 Societal norms and distribution
 Online shopping
 Social media marketing
 Technological innovation
 Impact on cost structure
 Shorter product lifecycle
Environmental factors Legal factor
 Recycling and waste management
 Renewable technology
 Weather and climate change
 Eco-friendly products
 Employee protection law
 Consumer protection law
 Intellectual property rights
Implementation of PESTEL factors in context of Hilton Food Group Plc:
Political: High political stability provides a better and approachable business climate
with consistent movements in consumer growth (Luiz, Ganson and Wennmann, 2019). Conflicts
and uncertainty in the worldwide political atmosphere will affect the entire development of
industry and limit the growth potential available to Hilton Food Group Plc. Periodic changes in
government policy are harmful to business success by rising environmental instability. Hilton
Food Group Plc need to evaluate the pressure in organizations, social/environmental activists and
workers' unions should carefully examine the demonstrations as they play an essential role in the
policy-making process. Near cooperation with such organizations may improve the ability of the
Hilton Food Group Plc. to work with stakeholders and accomplished long term business
objectives. Bureaucracy and corruption have a negative impact on the corporate climate.
Operations in different nations with the highest degree of corruption and poor law enforcement
allows the market climate increasingly volatile for Hilton Food Group Plc. Entry into countries
with high levels of taxes would have a significant impact on the profit margin of Hilton Food
Group Plc. High taxes attract foreign trade and discourage exports. They will enter low-tax
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economies and gain benefit from high income which can be spent in research & development
efforts.
Economic: The overall growth of a nation has a immediate effect on organisational
efficiency. Rising economies give Hilton Plc. wide-ranging opportunities for growth. It is crucial
to understand the life-cycle phase of the industry. The growth of GDP rate would assess the
capacity of company to implement its long-term growth initiatives. High GDP also demonstrates
the willingness of customers to spend more on goods offered. Rising unemployment reflects the
availability of surplus labour at relatively lower wages. Able to operate in such a market will
lower Hilton's production costs. Demand and availability of labour decide the wage level and
supply of skilled labour (Martins and Nienaber, 2018). Hilton Food Group Plc needs to
investigation and estimate labour market dynamics in order to appreciate how it can recruit
skilled workforce and exploit their abilities to boost business efficiency. Hilton's global
expansion strategy is driven by financial market efficiency, as working in highly competitive
financial markets contributes to increased liquidity opportunities.
Social: Alterations in demographic dynamics such as ageing demographics, migration
patterns and socio-economic factors are of vital importance to multinational business such as the
Hilton Food Group Plc. It is necessary for firms to understand the overall attitudes and behaviour
towards immigration as they can affect the willingness of companies to bring foreign managers
to host country. The gap of power within every society demonstrates recognition of inequality
and wealth inequality. Hilton Food Plc, must change its business management activities when
approaching markets with high and low power distances. Marketing and human resource
techniques in a conventional, patriarchal system with distinct gender roles would vary from
people from low gender stereotypes (Kokodey, Gnezdova and Lomachenko, 2018). Social class
inequity observation is also essential for the Hilton Food Group Plc. Company will be forced to
sell luxury goods at premium rates to a market where high-end market is relatively limited in
size. Similarly, social class-based segmentation of the market may be unsuccessful where social
class inequity is low. Increased use of mobile phones and social media platforms must be
addressed when designing appropriate marketing strategies.
Technological: The use of social networking sites has become popular in a contemporary
business. Hilton Plc will leverage the advantages provided by social media marketing to boost
financial performance. Technological developments can be used to launch the innovative social
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media strategies for creating online platforms. Hilton Plc should seriously reconsider the on-
going technical advances to remain ahead of the market. A close eye must be held on evaluating
the 5 G and assessing its ability to produce better business results through improved user
interface, fast productivity and increasing access (Newman and et.al., 2020). Research activities
are considerable significance in an world marked by creative disruption. In this climate,
company must invest in innovative technology to increase profits and re-invest profits for
potential emerging technologies. The introduction of emerging technology has reduced the
lifecycle of new product growth. New items are manufactured rapidly, and supply chain
members have also obtained more strength.
Environmental: Implementing effective waste management practises in organisational units
which are situated in or close metropolitan area is extremely important for Hilton Plc. Many
countries have established stricter regulations to protect their metropolitan canters through
proper waste management. Some countries are providing incentives to promote investment in
green energies. Hilton Food Plc. will benefit from this and invest in green energy to ensure
that long-term sustainability. This investment would also improve stakeholder trust and loyalty
the consumer base leading to enhanced brand awareness. Extreme weather conditions will raise
operational costs and push Hilton Food Plc. to allow the supply chain more versatile. Such shifts
can also affect customer purchasing habits, forcing the company to revise its advertising and
service strategy. There is a strong movement towards using environmentally friendly goods.
Hilton Food Group Plc. should enjoy the opportunity to introduce green business practises to win
the stakeholder's confidence.
Legal: Hilton Food Plc. must follow the staff / labour safety and security legislation as some
nations have stringent regulations to ensure safety at work. The ethical and legal duty of the
Hilton Food Group Plc. is to have a safe working atmosphere for employees (Vo and et.al.,
2020). Similarly, anti-discrimination legislation such as equal opportunities for jobs must also be
extensively examined when designing human resource policies as unfair suits against employers
that damage the corporate reputation and impact the ability of companies to recruit and retain
talent. Data security is becoming an extremely important issue to user privacy and security
issues. Hilton Food Plc. is important to study data security legislation in order to protect
consumer data. The Company must weigh these factors in order to be in compliance with
consumer protection legislation.
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CONCLUSION
In conclusion, the PESTEL approach is an excellent business method that requires a
thorough study of the macro-environmental or external factors that form the business
environment. From political to environmental considerations, each factor includes a number of
variables that affect the strategic decision making process of business such as the Hilton Food
Group Plc. In addition, for the better decision making procedures organization formulate a
proper board which include some executives or non-executive directors who perform their
responsibilities towards organization by making effective decisions.
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REFERENCES
Books & Journals
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