Business Environment: Analysis, PESTLE, Porter's Five Forces

This project analyzes the benefits and limitations of environmental analysis, applies PESTLE analysis and Porter's Five Force strategy, and determines stakeholder management for Newham University Hospital and Next Plc.

Business
Environment

EXECUTIVE SUMMARY
This project is based upon two companies that are Newham University Hospital as
being an acute general hospital situated in Plaistow at London Borough of Newham. The
Next Plc which is British multinational clothing, footwear and home products retailer
headquartered in Enderby, Leicester. This project describes the business environment by
analysing the benefits and limitations of environmental analysis. Additionally, it applies
PESTLE analysis through political, economical, social, technological, legal and
environmental factors. It further describes Porter’s Five Force strategy with their
recommendations for an organisation. This project further determines the stakeholder
management with its advantage and disadvantages for the organisation to sustain in global
market.

Table of Contents
EXECUTIVE SUMMARY........................................................................................................2
INTRODUCTION......................................................................................................................4
SECTION 1................................................................................................................................4
SECTION 2................................................................................................................................6
1. Apply PESTLE Analysis....................................................................................................6
2. Explain Porter’s Five Force Strategy of organisation........................................................8
SECTION 3..............................................................................................................................10
3. Recommendations from PESTLE Analysis.....................................................................10
4. Suggestions from Porter’s Five Force Strategy................................................................10
SECTION 4..............................................................................................................................10
CONCLUSION........................................................................................................................11
REFERENCES.........................................................................................................................12

INTRODUCTION
The business environment is described as the process through which managers of
company analyse their internal and external strategies by identifying strength and weakness.
The two organisations selected for this project are Newham University Hospital as being an
acute general hospital situated in Plaistow at London Borough of Newham (Joyce and
Paquin, 2016). The Next Plc which is British multinational clothing, footwear and home
products retailer headquartered in Enderby, Leicester. This project describes the business
environment by analysing the benefits and limitations of environmental analysis.
Additionally, it applies PESTLE analysis and Porter’s Five Force strategy with their
recommendations for an organisation. This project further determines the stakeholder
management with its advantage and disadvantages for company.
SECTION 1
Newham University Hospital:- This refers as being an acute general hospital
situated in Plaistow at London Borough of Newham. It is a Barts National Health Service
Trust with 340 beds facilities for patients in hospital. This hospital was opened by the Queen
as Newham General Hospital on 14th December, 1983.
Next Plc:- It is a British multinational clothing, footwear and home products retailer
headquartered in Enderby, Leicester. This is a public limited company with its ISIN as
GB0032089863. The Chairperson of industry is Michael Roney and Chief Executive Officer
is Simon Wolfson. It consists of 43,970 numbers of employees within the organisation and
has its website at www.next.co.uk.

Business Environment:- This is defined as the intrinsic and extrinsic surroundings of
business which develops competitive strategies for company that leads to compete with
rivalries for sustaining in global market. The main purpose for managers of Newham Hospital
is to develop good atmosphere for children. This external environment is also categorised into
micro and macro factors. Managers of Next majorly analyse the business environment for
identifying natural disasters and various external factor that might negative its stability in
global market. The micro includes competitors, public and marketing intermediaries. The
macro involves political, economical, social, technological, legal and environmental. It
further supplies high quality services, modern and vibrant environment for mothers-to-be.
The Newham Company focus on analysing their environmental factors as to develop
competitive strategies for increasing their capabilities as to minimise the controllable and
uncontrollable risk.
Environmental Analysis:- It is a strategic tool that identify internal and external
elements of business environment which affects its operations either positively or negatively.
Managers of Newham focus on their environmental analyse for determining various micro
and macro factors that impacts the stability or instability of business (Kortmann and Piller
2016). The managers of Next implement this environmental analysis as to examine the
internal and external factors that might create strength and weakness for company.
 Benefits:- The benefits of environmental analysis is to develop future plan for
company by identifying its opportunities and threats for assessing and managing risk.
Managers of Newham are beneficial with environmental analysis s they formulate
strategies and plans of actions for minimising their uncontrollable risk through taking
precautionary steps. The company aims to ascertain benefits from its business
environment by developing good atmosphere for its patients as to treat them with
effectively. Its main objective is to provide medical facilities by building good health
of its clients that leads customers to survive their lifestyle effectively. The Next retail
sector managers are advantageous with environmental analysis as it leads to
determine the current and future statistics of company for taking precautionary steps
in minimising uncontrollable risk.
 Limitations:- The limitations of environmental analysis is to monitor and control the
actions of workers for identifying errors that are to be minimised for sustaining in
global market. It mostly takes long duration for company to manage and run their
business with efficiency. Managers of Newham analyse their innovative idea is able

to meet the requirements of customers and lacks in building customer relationship
management. The Newham Company is adversely affected as there are limited
sources in hospital such as beds availability, technical equipments, etc., that affects
the stability of business for not been able to treat clients actively. Managers of Next
Retail face limitations as they are not able to analyse their intrinsic weakness and
extrinsic threats that affect the stability of business. The company delays in
accomplishment of goals and objectives by competing with rivalries through
developing competitive strategies.
SECTION 2
1. Apply PESTLE Analysis
PESTLE Analysis:- This analysis is defined as the process through which managers
of an organisation are highly aware of their competitive strategies being adopted by rivalries.
Managers of Newham University Hospital implement this PESTLE Analysis as to improve
their strength by developing its higher strategies for reducing the impact of weakness and
threats over business (Lewandowski 2016). Managers of Next implement this PESTLE
Analysis as to ascertain various determinants that directly or indirectly impact the business
operations in global market.
 Political:- The managers of Newham are favourably affected as they follow rules and
regulations imposed by political leaders. The government of United Kingdom is stable
that result in formulating same legislations which does not lead company to change its
decision-making procedure. The company is positively impacted as managers have to
follow their organized strategic decision-making procedure and implement actions in
accordance to it for achieving goals and objectives. The Next Plc is mostly operating
its business in retail sector as being situated at more than 12 countries selling its
products and services by developing good customer relationship management.
 Economical:- The managers of Newham are unfavourably affected as they face
challenge of inflation rate which tends to increase the price of money and decrease its
value. This adversely affects the buying position of its customers and that result in
high expense for its buyers which lead them to postpone their buying decision. The 1
dollar is equal to 75.16 Indian rupees. The company develops strategy to reduce its
price for enlarging its customers that result in high quality services. The Newham
Hospital is negatively impacted as the customers prefer to adopt services at least cost
that are costly at inflation which leads patients to save unwanted expense. Managers
of Next emphasize leaders to focus on the infrastructure quality in Retail industry as
to develop its competitive strategies for sustaining in perfect competition market.
 Social:- Managers of Newham are favourably affected as the society members are
benefited from company through providing them job opportunities that increase their
survival for society members. It develops good atmosphere for company and develops
trust and social welfare which builds support and loyalty. The Newham Company is
positively impacted as the members in society are advantageous by being conscious
about their healthcare and tends to take precautionary check-ups from hospital. It

leads to develop customer support and loyalty that creates opportunity for growth and
stability of hospital. The Next Company develops good relations with its society
members as selling them qualitative products and services at least cost effective prices
that result in building corporate social responsibility.
 Technological:- This factor of external macro-environment positively impact in
stability of business by adopting new technology for generating innovating idea in
planning. It affects the stability of business by completing the target at less duration
and providing high quality services which result in high satisfaction of customers.
This technology is useful in applying various techniques through implementing
equipments for providing health care facilities to patients. Managers of Newham
further analyse the change in taste and preference of customers as well as the drive in
growth of lifestyle of public (Monroe, Rikala and Somervuori, 2015). The Newham
Company is positively impacted as it mainly focus on adopting various technologies
that leads company to sustain in global market by achieving success efficiently with
less time consumption. The managers of Next implement new technologies and
softwares as to manufacture their qualitative products that is capable in meeting the
requirements of its customers. It creates opportunity for growth and stability of
business as to sustain in global market. This enhances company to provide qualitative
services for its target market as to supply products through direct and indirect channel
of distribution. It includes manufacturers, agents, wholesalers, retailers and customers.
 Legal:- This legal factor of external environment includes consumer protection
rights, employment legislations, labour and environmental laws, etc. The managers of
Newham are unfavourably affected as they are bound to pay minimum wages to their
employees who are not performing their actions with high level of efforts. It further
focuses on providing services with equal pay act, fair hour and wages, etc. The
Newham Company focus on analysing existing and new legislations imposed by
government of United Kingdom and are they being followed by company or not.
Managers of Next Plc focus on analysing the legal and lawful obligations of political
leaders as to implement various laws in order to remain stable. These rules and
regulations are anti-trust law in retail industry, discrimination law, consumer
protection rights, employment and health and safety law.
 Environmental:- The managers of Newham are favourably affected as they properly
manage and run their business by being aware of restricting environmental pollution.
It further aims to effectively utilise the waste disposal by recycling it repeatedly that
restrict cost of product. This environmental factor positively impact business as the
good atmosphere of company usually attracts workers to perform their high level of
actions for sustaining it in global market. It is most important for managers of Next in
identifying the weather and climate of business environment that might affect the
business operations. It further takes precautionary steps to deal with natural disasters
as to minimise the uncontrollable risk. The Next Company further emphasize on
recycling its waste disposal material in an effective manner that result in minimising
the cost of products for attracting large number of customers. It also result in
developing good atmosphere for its workers as to complete their task with eagerness
in calm and beautiful environment.

The managers of Newham University Hospital focus on the external macro factors for
analysing the competitive strategies adopted by its rivalries for sustaining in global market.
The main purpose of company is to determine the forthcoming legislations imposed by
government of United Kingdom that may negatively impact its stability. It further leads to
examine the change in taste and preference of their target market that may result in
decreasing its sale and profits (Ortiz‐de‐Mandojana and Bansal, 2016). Managers of Next Plc
analyse the external macro environmental factor as to determine their positive and negative
impacts of elements over business strategies. Next Company implements PESTLE analysis
for identifying the forthcoming legislations imposed by United Kingdom government such as
anti-trust law in retail industry, discrimination law, consumer protection rights, health and
safety law. This results in evaluating the internal strength and external opportunities over
intrinsic weakness and extrinsic threats.
2. Explain Porter’s Five Force Strategy of organisation
Porter’s Five Force Strategy:- It is a framework mostly adopted by managers of
company for analysing competition of business. This strategy is essential for an organisation
to determine the stability or instability of company within perfect competition market in order
to analyse its competitive strategies. Managers of Newham University Hospital implement
this as to segment the economy for understanding the level of competition within various
industries that enhance company’s long term profitability ratios. The Newham Company
further analyse the implications of Porter’s Five Forces strategy as to analyse their
competitors in perfect competition market with their competitive strategies. The managers of
Next Plc adopt Porter’s Five Force strategy for identifying the innovative idea that has to be
developed by company for sustaining in global market by competing with its rivalries.
 Competition in the industry:- The managers of Newham identify their competitors
in global market that tends to enlarge customers by providing various facilities at low
cost. It is unfavourable for company as managers of Newham further develops various
strategies for attracting and developing loyalty of its buyers. It is beneficial as it leads
to analyse competitors and determine their strategies for taking precautionary steps.
The Newham Company determine the strategies adopted its rivalries that are General
Hospital, Salford Medical Centre, Derby Hospitals NHS Foundation Trust, etc. Next
Plc managers emphasize on developing strategic decision-making procedure as to
develop innovative idea for achieving its goals and objectives efficiently. It further
focus on building good team morale by motivating its workers through monetary and

non-monetary as to compete with rivalries that are John Lewis, Debenhams, Dunelm,
M&S, Sofology and ZARA.
 Potential of new entrants:- Managers of Newham highly face challenge of new
entrants in global market by entering with strategic decision marking procedure for
producing new product. It develops high competition for company that might create
threat for organisation and delay in goal achievement. It is advantageous for company
in identifying the strategy implemented and to take actions for reducing its threats.
Managers of Next Plc determine the new strategies adopted by new entrants such as
product differentiation, cost leadership, quality management, etc., that tends to attract
customers for purchasing their products. The main aim for managers of Next is to
design specialised marketing plan for developing new product with its differentiated
structure and shape that enhance in generating market value.
 Power of suppliers:- The managers of Newham have various supplying strategies by
considering customer as King for identifying change in their taste and preference. It
further manufactures new products as to fulfil the desire of its customers by providing
them high level of satisfaction. The main of company is to facilitate service at low
price for enlarging its buyers. It is profitable by maintaining least cost that result in
enlarging customers for maximising sale and profits. The Next Company further
emphasize on its managers as to sell products through implementing various supply
chain management procedure that leads to sell products and services at least price
which result in high sale and profits. It creates opportunity for company in developing
good customer relationship by supplying qualitative products at low cost for meeting
their requirements. This provides high level of satisfaction to its customers at which
they are ready to pay high prices.
 Power of buyers:- Managers of Newham are bound to develop qualitative products
and services at least-cost effective price which provides high level of satisfaction to
its buyers. It is most important for organisation as to fulfil the requirement of buyers
that result in achieving goals and objectives efficiently (Sharafizad and Coetzer,
2016). It is helpful by developing customer relationship management that result in
high support and loyalty of company. The Next Company focus on their buyers
demand by analysing the change in taste and preference for manufacturing the
products as per their requirements in order to increase sales and profits.
 Threats of substitute products:- The managers of Newham also face challenge from
its substitutes as those companies develops same products and services which tends to
diversify customers for high quality management. The Newham Company aims to
analyse the procedure of its substitutes companies for attracting customers that
decrease its sales and low profit-margins. The Next Company determine competitive
strategy adopted by its substitutes for manufacturing similar products by identifying
quantity and quality of their commodities. It further develops various strategies as to
compete with them for maximising revenue and profitability ratios.

The managers of Newham University Hospital face rivalries with its competitors such
as Newcastle General Hospital, Salford Medical Centre, Derby Hospitals NHS Foundation
Trust, etc. The implication for using Porter’s Five Force strategy that leads to examine the
various factors which positively or negatively impacts the stability of business. The managers
of Next Company challenges with its competitors for being stable in global market are John
Lewis, Debenhams, Dunelm, M&S, Sofology and ZARA. The Next Company implement this
Port’s Five Force strategy for determining its competitor strategies and develop its plan for
sustaining in global market by fulfilling the needs and wants of potential customers. The
consumers can easily switch to other competitors where they prefer good quality services at
least cost.
SECTION 3
3. Recommendations from PESTLE Analysis
The managers of Newham University Hospital are recommended as to be conscious
and aware of the strategies being adopted by their rivalries. The company is further requested
to develop its strategic decision-making procedure of planning with innovative idea by
analysing and researching on the needs and wants of customers. The PESTLE Analysis
describes that managers of Newham are favourable with political, social, technological and
environmental as it positively impact on business stability. The economic and legal factor
negatively impact business operations as managers are bound to pay minimum wages for
unproductive labours (Standing and Mattsson, 2018). The managers of Next Company are
recommended to determine the external factors of business environment that may affect the
stability of business as it favourably or unfavourably impact the operational activities.
4. Suggestions from Porter’s Five Force Strategy
The managers of Newham University Hospital are suggested as to implement the five
generic strategies for sustaining in global market. It is essential for the company as to
determine various factors that impact its stability in perfect competition market. The
company must analyse its competitors by identifying their strategies and take precautionary
steps for minimising their uncontrollable risk. New entrants create risk for stability of
company as they have the ability for attracting large number of buyers by manufacturing
specialised products. The suppliers have power to sell their qualitative services at high price

for supplying quality management products. The customers have power as to decrease the
price of commodity by being aware of actual price in international market. Next Company is
suggested as to analyse their competitors and determine their specialised strategies which
cannot be copied easily. It is essential for company to develop good relations with customers
that result in increasing their support and loyalty.
SECTION 4
Stakeholder Management:- This is defined as the process through which managers
organise, monitor and improve relationship with their stakeholders. The managers of
Newham University Hospital emphasize on stakeholder management as to analyse their
needs and expectations, planning and implementation as well as various tasks to engage
them. Manages of Next Company focuses on stakeholder management in meeting the
estimated and actual budget by minimising its unnecessary expenses. The stakeholders are
further categorised into two parts such as internal and external. The internal stakeholders
include entities within business such as employees, managers, board of directors,
entrepreneurs, investors, etc. The external stakeholders involve consumers, regulators,
investors and suppliers.
 Advantage:- Managers of Newham University Hospital are advantageous as they
develop more valuable engagement by building good relations that tends to
accomplish goals and objectives efficiently. The managers of Next Plc are beneficial
in managing and running their business effectively by supplying qualitative products
and services for developing trust and faith among its target market. It further develops
the better understanding of needs and concerns for its customers by manufacturing
products and services to meet their requirements. It results in enlarging customers that
leads high support and loyalty of its end-users.
 Disadvantage:- The managers of Newham University Hospital are disadvantageous
as the large number of people are not performing their task effectively. It further lacks
in developing good relations among each other by not developing discipline nature
which tends to result in conflicts, jealousy, partiality, etc. Managers of Next Plc are
disadvantageous as they are not able to motivate its workers to give their high level of
efforts because of lack in motivation that delay in accomplishment of success
efficiently. The managers mostly face challenge for low team morale as the workers
are not motivated that delay in goal accomplishment (Yi, 2014). It further lacks in
sustaining global market by not increasing its competitive strategies for competing
with rivalries.
CONCLUSION
From the above discussion it have been concluded that business environment plays
major roles for company is analysing the elements that creates opportunity and threats for its
stability. This project describes the business environment by analysing the benefits and

limitations of environmental analysis. Apartly, it applies PESTLE analysis and Porter’s Five
Force Strategy with their recommendations for an organisation. This project further
determines the stakeholder management with its advantage and disadvantages for company.

REFERENCES
Books and journal
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Kortmann, S. and Piller, F., 2016. Open business models and closed-loop value chains:
Redefining the firm-consumer relationship. California Management Review. 58(3).
pp. 88-108.
Lewandowski, M., 2016. Designing the business models for circular economy—Towards the
conceptual framework. Sustainability. 8(1). p. 43.
Monroe, K. B., Rikala, V. M. and Somervuori, O., 2015. Examining the application of
behavioral price research in business-to-business markets. Industrial Marketing
Management. 47. pp. 17-25.
Ortiz‐de‐Mandojana, N. and Bansal, P., 2016. The long‐term benefits of organizational
resilience through sustainable business practices. Strategic Management
Journal. 37(8). pp. 1615-1631.
Sharafizad, J. and Coetzer, A., 2016. Women business owners’ start-up motivations and
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Standing, C. and Mattsson, J., 2018. “Fake it until you make it”: business model
conceptualization in digital entrepreneurship. Journal of Strategic Marketing. 26(5).
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Yi, H., 2014. Green businesses in a clean energy economy: Analyzing drivers of green
business growth in US states. Energy. 68. pp. 922-929.