Importance of PESTEL Analysis for Business Organization

This document discusses the importance of PESTEL analysis for a business organization, using Plus500 Plc as a case study. It provides an overview of the company, its governance structure, and the factors that influence its business environment. The document also includes a practical example of each factor of the PESTEL analysis.

Business
Environment

EXECUTIVE SUMMERY
Business is an action of designing, creating, producing, selling and delivering goods and
services of a company. In a company these all are business activities which are operating by the
management to run the business of a firm. Business environment is the atmosphere where a
company perform its actions and activities. Plus500 Plc Plc is a international financial company
which offer trading services to its potential customers. There are various factor which affect the
business environment of the company. To determine these factors the management of the
company can induct PESTEL analysis. It help in providing deep information about those
components which influence the firm.

Table of Contents
EXECUTIVE SUMMERY..............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
TASK 1............................................................................................................................................4
(a) Overview of the company......................................................................................................4
(b) Brief discussion of how the company is governed................................................................5
TASK 2............................................................................................................................................6
(a) Importance of PESTEL analysis for a business organisation................................................6
TASK 3............................................................................................................................................7
(a) PESTEL analysis which influence the environment of the company....................................7
(b) Relevant practical examples of the factors of PESTEL analysis..........................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................10

INTRODUCTION
Business refers to the process of selling good and services and trading products in global
market. It can be an activity of producing goods and services as consumers needs and demands
or provide them with the motive of satisfying their desires (Prajogo, 2016). Business
environment refers to the combination of internal and external components of the organisation
which affect the operational condition and situation of the firm. This assignment is based on
Plus500 Plc which is a multinational financial company. This organisation provide online
trading services in contracts for difference , across more than 2000 securities and various asset
classes. This document will discuss about organisational structure of the company and
management of it. Further, will explain about the PESTEL analysis of the company and its
importance.
MAIN BODY
TASK 1
(a) Overview of the company
Plus500 Plc is a public organisation and an online CFDs platform which provides trading
facilities on shares, forex, commodities and indices. It is an international financial company
which provide online trading services to its target audiences (Plus500 Plc. 2018). This company
was founded in 2008 by Alon Gonen, Gal Haber, Elad Ben Izhak, Omer Elazari, Shlomi
Weizmann and Shimon Sofer. This firm headquartered in Israel an d has subsidiarie4s in UK,
Cyprus, Australia, Singapore and Bulgaria. There 1074 employees are working within this firm
and they make their contribution in operating the business of the company (Plus500's
Competitors, Revenue, Number of Employees, Funding and Acquisitions. 2019). This
organisation operate its business in 50 nations and in over 31 languages with the help of multiple
operating systems like Windows, smartphones, IOS, Andriod and Windows Phone, tablets,
Android and Surface, Web browsers etc.
This company operate its business at national and intentional level with the help of
various operating systems. The management of this company build a strong foundation which it
is well positioned in the market to offer future development. For surviving in market, this firm
continuously adopt its new consumers and retain its active target audiences (Deasy and et. al.,

2016). The administration of this company also make excogitation in its marketing initiatives to
spread targeted merchandising origins and produce highly efficient marketing campaigns with
the purpose of analysing and controlling national and international consumers acquisition.
Plus500 Plc consistent concentrate on creation, best in class user experience and breadth of
offering are the key elements of exploding activity so that consumers can insight desirables like
high profile, new listed equities.
Business objectives
 The objective of Plus500 Plc to maintain its leadership in innovation, grow its customers
base in established marketplace.
 To extend its market leadership and strengthen and expand its geographical reach in to
new regions.
(b) Brief discussion of how the company is governed
Board of director indicates to team and group of individuals which are elected by a
corporation's shareholders to represent the shareholders interests and ensure that the
organisation's administration acts on their behalf (Belás and et. al., 2015). The head of the board
of director is the chairperson of the board. In Plus500 Plc Penelope Judd is the board of director
and chairwoman of this company and Asaf Elimelech is the CEO of this firm.
There are 2 executive and 3 non-executive director of the company who assist in running
the business operations of the company in effective and efficient manner and they are elected and
appointed in 2016. This company follow Hierarchical organisational structure in which each and
every entity in the company, anticipate one is assistant to a single other entity. In context of this
company, it is a way to structure a company by utilising various level of authority and a vertical
link or chain of command among superior and subordinate levels of the company. High level
authority have the power of make control on lower levels of hierarchy.
Relationship between Board of directors and stakeholders
There are effective relations among directors and stakeholders. Stakeholders refers to an
independent entity, party and person who can be affect or effecte4d by the company's activities,
operation, aims, objectives and plans or policies. In Plus500 Plc, there can be various
stakeholders of the firm they can be creditors, directors, employees, shareholders, customers,
government, suppliers and others. The relation between stakeholders and director are as
following:

Shareholders- It mention to a person, company and institute which owns at least one
share of a public and private company. In Plus500 Plc, shareholder refers to those person, firm
and institute who own the share of the firm to make their partnership in the company and they
have effective relation with Board of Directors. They will majorly want to know that of the firm
is devising a profit in order to be assured that they can get back on their investment (Bah and
Fang, 2015). The abstraction between board of director and stakeholder can be more ceremonial
with specific grandness on the content of the yearly report and statements to the press and stock
market.
Employees- Employees refers to those individual who are making their contribution and
participation in the growth and development of the company so that it can Tatiana its set
objectives of the firm in given time period. In Plus500 Plc, they maintain good relation with
board of directors of the company and they make interaction on things like what they must do
and they can perform their actions in appropriate manner (Epifanova and et. al., 2015). By
sharing their issues, taking guidance and getting solution to directors, they can resolve problems
such as contacts, health and safety and others which help in maintaining effective relation.
Customers- They are those people and person who help in running the operations and
activities of the firm. In Plus500 Plc, it indicates to those people who buy and purchase services
of the company and help the firm to accomplish its set objectives and aims. Board of director
build effective relation with customers by offering and creating quality services according to
their needs and demands or offer them relevant prices so that they can provide satisfaction to
their needs and demands.
TASK 2
(a) Importance of PESTEL analysis for a business organisation
PESTEL analysis is an tool and technique which is used by the marketer to monitor the
impact of external and macro factors on business of the company. In context of Plus500 Plc Plc,
it can be a framework through which the management of the company can analyse the impact of
external factor like political, economical, social, technological, environmental and legal.
Importance of PESTEL analysis in context of Plus500 Plc is defined as beneath:
Deeper understanding- It provide deep and detailed information about those factors that
affect business and business environment of the company. Without this analysis, environment

which directly and indirectly effect the business can go unnoticed. This framework assist in
looking or analysing several components which could make impact upon the success of the
organisation. It is essential because it promote the improvement of strategical thought process for
a sound apprehension of strategical planning.
Alertness development- This analysis is crucial because with the help of it, the
management of the company can monitor the organisation in broad sense in terms of marketing
plan and customer relationship (Virglerová, Dobeš and Vojtovič, 2016). It is important for
Plus500 Plc Plc because it can be help in maximize the consciousness of expected issues and
threats in term of existent rivals, upcoming competitors and others.
Exploit opportunities- Opportunities are external and by utilising this analysis the
administration of a company can monitor the external environments so that they can get
opportunities for the growth and development of firm (Saleem, 2015). In Plus500 Plc, the
management of the company can gain various growth opportunities regarding its business. For
instant, by using technology in promotion like new social media channel web advertisement,
they can raise the awareness about their services.
It is important for the business of Plus500 Plc because it provide information about
consumers needs and demands. It is essential fro the strategic management of the company and
monitoring the elements that affect organisational business concern.
TASK 3
(a) PESTEL analysis which influence the environment of the company
PESTEL analysis
It is a structure and tool which is used by the management of the company to monitor the
macro factors of a company which externally affec6t the business environment, operation and
activities. This analysis can be used by the management of Plus500 Plc to analyse the effect of
external factor on the business of the firm. PESTEL analysis of this respective company is as
following:
Political- This factor consist political policy and stability like trade, fiscal, taxation, trade
restrictions and others. Plus500 Plc operate its business internationally so these factors can affect
the business of the company. For instant, political stability can influence the business of the

company. Respective company operate its business worldwide so change in government or
national authorities policies affect the business of the company.
Economical- This factor define the performance of the economy worldwide and
nationally. It consider economic development, exchange rates, inflation rates, interest rate and
others. For example, due to operating its business globally, this factor is also affect the business
of the company (Kozubíková, Homolka and Kristalas, 2017) . If a nation suffer high rate of
inflation then it affect Plus500 Plc negatively because due to inflation the firm is also decrease
the prices of its services and product which influence the company.
Social- This factor include culture, trend, values, beliefs, taste & preferences, growth,
needs, income and others. The behaviour of individuals are change quickly and they demand
different kind of products and services to satisfied their needs (Hillary, 2017). For example,
Increased rate of immigration affect the business of Plus500 Plc because if the company operate
its business in UK and it switch its business from that place then it affect in term of unskilled
labour, low productivity etc. On the other hand, if there skilled and productive workers within
the firm then it can help in fulfilling the need of the consumers.
Technological- It refer to innovation and technology which may impact the operations of
the industry and market positively and negatively. In current era, organisations are using
technology in its business at high level. So that they can fulfil their customer's needs. For
example, in Plus500 Plc, if the management of the company use automation technology in its
business then it can favourably affect the business of the firm. Because the firm can use it in
analysing the needs of customer and the workforce which is used by the administration for
market analysis and it can be use in other activities. This help in providing correct information
and maximizing productivity of the firm.
Environmental- This factor include climate, weather, recycling procedures, carbon
footprint, waste disposal and others or they affect business of the company favourably and
unfavourably. For example, in Plus500 Plc, the customers and government both focus on the
safety of environment so they concentrate on use technology like mobile applications so that they
can reduce or minimise paper work which help in securing environment. It create favourable
impact upon organisation because the management of the company work to environment and
attract potential customers by fulfilling their demands.

Legal- It consider laws, regulations and legislations which are formulated by the national
authorities of different nations so that organisations can operate and run their business in
effective and appropriate manner. For example, if the company will not properly follow equality
and discrimination law or make discrimination on the basis of pay and other activities then it
affect the firm negatively.
(b) Relevant practical examples of the factors of PESTEL analysis
PESTEL analysis is a important business tool which is used by the company to observe,
measure, coordinate and lead macro environment components which can create impact on the
business in present and future (Khan and Quaddus, 2015). There are various factors of this
analysis which affect the business of Plus500 Plc, some of them are defined with relevant
examples, they are mentioned as beneath:
Political factor- This factor consider political elements, like tax policies, fiscal policies,
trade tariffs, government, political stability and others, of a country which affect the business of a
company. For example, in UK, the government characterised new regulatory capital rules which
affect the business of Plus500 Plc in UK (Lee, 2017). This company operate its business
worldwide so it is affected by the change in government rules and regulation due to change in
government. In UK, EU and others the national authorities make change in their legislation
which influence respective organisation.
Technological factor – This factor mention to make creation in technology which create
its impact upon the business of a firm positively or negatively. It include advance technology,
automation, research and development or others. In Plus500 Plc, technological innovation can
create favourable impact. The management of the company adopt digital and mobile technology
to make improvement in its business actions. By providing mobile capabilities they can provide
information their potential customer about their services, fraud prevention, cyber risk and others.
It will help the company as a promotional tool because with the help of it they can get updates
regarding new products, innovation and others.
Legal factor – This component consist the laws and legislations which are framed by the
administration of the company for the effective running of the company. In Plus500 Plc, this
factor affect the company when national authorities of a nation make change due to change in
economic, political and social condition and situation. For example, In UK, due to change in

government, changes are occur in various manner (Moroni, Arruda and Araujo, 2015). They can
affect the business of a firm in different way and manner.
CONCLUSION
As per the above information, it can be summarised that business is an important aspect
for for running the actions and operations of a company. Business is an activity of producing,
selling, delivering goods and services to the customers. The company manufacture products and
services according to customers needs and demands so that they can fulfil their desires by
creating services as per their requirement. Business environment refers to that place and area or
industry where a company operate its business activities and operations. There are various factor
that affect the business of the company in this environment like, political, government, social,
technical, competitors and others. To analyse these factors the management of the company can
use PESTEL analysis which is a tool that utilised by the management of the firm to identify
external factors. This analysis is essential for the company because with the help of it they can
collect deep information about market and that factor which create influence. It is crucial to
identify consumers needs and creating strategic planning.

REFERENCES
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Epifanova, T. V and et. al., 2015. Modernization of institutional environment of entrepreneurship
in Russia for development of innovation initiative in small business structures.
Hillary, R., 2017. Small and medium-sized enterprises and the environment: business
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economic performance of informal microenterprises: content analysis and partial least
square approach. International Journal of Sociology and Social Policy. 35(3/4). pp.273-
288.
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Online
Plus500 Plc Plc. 2019. [Online]. Available Through:
<https://pitchbook.com/profiles/company/98155- 09>.
Importance of PESTLE Analysis. 2019. [Online]. Available Through:
<https://pestleanalysis.com/what-is-business-case-analysis/amp/>.
Plus500's Competitors, Revenue, Number of Employees, Funding and Acquisitions. 2019.
[Online]. Available Through: <https://www.owler.com/company/plus500>.
Plus500 Plc. 2018. [Online]. Available Through: <https://commodity.com/brokers/plus500-
review/>.