Importance of PESTLE Analysis in Business Organisation

This document discusses the importance of PESTLE analysis in a business organisation. It explains how PESTLE analysis is a cost-effective tool that helps in identifying opportunities, mitigating risks, and understanding the external environment. The document also examines the use of PESTLE framework to analyze the external environment of Rightmove PLC, the UK's largest online property portal and real estate company.

Business Environment

EXECUTIVE SUMMARY
Business environment signifies the external and internal environment of business which
may or may not be in control of organisation but they can affect long term growth, profits and
survival of business. Thus business environment should be healthy and prosperous to obtain
profitability and productivity for the organisation. Rightmove PLC is UK's largest online
property portal and real estate company with purpose to build great team and to make a happy
place to work for the employees. Rightmove PLC is working with one aim to make property
search and home moving simpler and easier in UK. The aim of report is to study PESTLE
analysis and its importance in business organisation. PESTLE analysis is the way to analyse
current external(macro) environment factors and there impact on the business functions and
performance. PESTLE analysis help the business to maximize the opportunities and mitigate the
threats. Moreover the objective of the report is to conduct the PESTLE analysis of Rightmove
PLC and also describe the organisation structure of the Rightmove PLC. The report outlines the
Political, social, technological, economic, legal and environmental factors of UK and there
impact and influence on the Rightmove PLC. It is analysed that the PESTLE analysis is most
cost effective analytic tool and also useful to business in identifying risk, opportunities and helps
to understand the business environment more deeply. It enhance the critical and strategic
planning skills of the marketer of business. Further, from the Rightmove PESTLE analysis it is
find that company is skilled in innovating and garbing the opportunities created by the
technological factor to accomplish the purpose of company. Company's legal and environmental
factor depicts the code of corporate governance in the Rightmove. Hence the PESTLE analysis
of the Rightmove is beneficial to the firm in exploiting the opportunities existing the market of
UK and to eliminate the risk factors arising due to political and economic instability.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Task 1. Examine the structure of the company, its management and how it is governed..........1
Task 2. Evaluate the importance of PESTEL analysis for a business organisation....................3
TASK3. Examine the use of PESTEL framework to analyse the external environment of
Rightmove PLC...........................................................................................................................6
CONCLUSION................................................................................................................................8
References:.......................................................................................................................................9

INTRODUCTION
Business environment in the contemporary world is dynamic, uncertain, comparative,
complex and multi- faceted. Business environment comprises of two environment, internal and
external environment. Internal environment consist of employees, vision and mission, culture,
management, values and human resource (Halbert and Ingulli, 2020). Whereas external
environment is further divided into two factors macro and micro environment which consist of
technology, supply and demand, competitors, customers, political, legal, market rends etc. Thus,
these factors of business environment influence the profitability, productivity and growth of the
organisation. The report outlines the organisation structure of the 'Rightmove PLC'- UK's largest
real estate online portal company situated in London. Report also describes the importance of
PESTLE analysis in the organisation. PESTLE analysis is the tool used by the organisation to
analyse the macro business environment which assist in recognising threats and weakness related
to those factors in the organisations profitability and functioning (Ju and Wang, 2018). Further
the PESTLE analysis of Rightmove PLC is conducted to analyse the external factors affecting
company's growth and decision making.
MAIN BODY
Task 1. Examine the structure of the company, its management and how it is governed.
Company Overview
Rightmove PLC is largest property portal of UK with a aim to empower the decision
making of UK's public in the real estate. Rightmove PLC is the simple and well-informed
property search website named as www.rightmove.co.uk. Rightmove PLC holds the UK's largest
property market place is number online portal of real estate in the UK headquartered at London.
Rightmove was established by four uppermost real estate businesspersons of UK: Halifax,
Countrywide, Connell's and Royal and Sun Alliance in year 2000. Customers of Rightmove PLC
are estate agents, rental agents and new homes developers. The business model of Rightmove
PLC is focused on getting benefits from the network effect which has three basis efficiency,
empowering and simplicity. Stocks and shares of the Rightmove PLC displayed in the London
stock exchange in 2006. The business strategy of Rightmove concentrate on organic growth of
firm in the real estate market of UK.
Organisation structure
1

Organisation structure is the system crafted on the basis of rules, roles and
responsibilities of individuals working in the organisation (Shtal and et. al., 2018). Organisation
structure helps in directing and determining the flow of information within the firm. There are
various organisation structures such as functional , hierarchical, divisional, flat etc. among
which Rightmove PLC has a functional organisational structure which helps the employees to
focus on their role and responsibilities. Rightmove structure is diversified in three committees:
Audit committee, Remuneration committee and Nomination committee. Committees are
authorized to legal organisational chart to execute its responsibility. Rightmove PLC has the UK
corporate governance code of conduct in which it works in framework of government policies,
initiatives and procedures.
Board of directors
The board is accountable for the long term success of the firm to benefit shareholder's
and also taking care of the customer's it serves. Rightmove PLC has eight directors out of which
two are the executive directors that are chief executive officer and chief financial officer and
other six are the non executive directors.
CEO and Chairperson
Peter Brooks- Johnson, Chief Executive Officer(Executive Director)
Peter Brooks is the CEO of the Rightmove PLC and was elected and appointed in May
2017. Before which Peter served 4 years as a Chief operating officer of Rightmove PLC. Peter is
part of Rightmove PLC from over 15 years , earlier peter was the consultant at the Accenture and
Berkeley Partnership. Peter has long time experience in Rightmove and has sharp knowledge,
skills and strategies in property and digital marketing which is beneficial to organisation to
operate smoothly. CEO has a role to manage at the day to day activities of the Rightmove like
operational and financial activities, corporate decisions and leading executive directors team.
Andrew Fisher, chairperson(Non Executive Director)
The Ex- chairperson Scott Forbes was retired after the lending its service to Rightmove
for 14 years. After which the new chairperson of the Rightmove PLC is Andrew Fisher elected
and appointed in the January 2020. Andrew is also the board member at Marks and Spencer plc
as a non executive director. Andrew is highly experienced and has history in enlarging the digital
and media enterprise with its incredible strategies for growth and sustainability. As a appointed
chairperson of the Rightmove PLC he has responsibility to conduct effective meetings and
2

inspire the healthy and positive relationship between the board members. He also needs to make
sure that the stakeholders and board of directors are in good terms of communication. Andrew is
responsible for efficient leading and governance of the directors on the board.
Jacqueline de Rojas CBE, Senior Independent Director(Non-executive Officer)
The senior independent director who is recognised for the technical skills, experience and
knowledge in coding, software and technology based domains. Jacqueline was appointed and
elected on 30 December 2016 in Rightmove PLC. She has role to advise the chairperson during
difficult situations or any decision making. Chairperson's whole year feedback is also conducted
by the senior independent director.
Alison Dolan, Chief Financial Officer(Executive Officer)
Alison is newly elected CFO of Rightmove PLC appointed on 7 September 2020. Alison
looks at all the financial activities of the Rightmove PLC and coordinate with the CEO as the
member of executive director team. The role is to communicate effectively with the stakeholders
of the firm and to manage the financial issues.
Non-executive Officer
Other than chairperson and senior independent director there are four more non executive
directors, Andrew Findlay, Lorna Tilblian, Rakhi Goss-Custard and Amit Tiwari of Rightmove
PLC. The responsibility of these officers is to create healthy competition among the directors and
to ensure that competitive strategies and other measures are implemented by the board to avoid
risk.
Sandra Odell, Company Secretory
The company's secretory Sandra Odell was elected and appointed by the directors of
board on 1 November 2016. As a secretory the primary role of the Sandra is to aware the board
about the corporate governance issues and also ensure that the all the crucial information by the
CEO and the chairperson is consistently and timely received by the other board of directors.
Sandra also manage meetings, inductions and training activity on place of chairperson.
Task 2. Evaluate the importance of PESTEL analysis for a business organisation
PESTLE analysis is the fundamental tool of marketers of business organisation to
identify how the factors of macro environment influence the performance and decision making
of the organisation in terms of profitability and growth (Christodoulou and Cullinane, 2019).
3

PESTLE stands for Political, Economic, social, technological, Legal and Environmental factors.
The importance of PESTLE analysis for a business organisation are: Cost effective: PESTEL analysis is the cost effective tool as consistent PESTLE analysis
doesn't require the heavy cost. Business organisation often have a risk of loss and with
PESTEL analysis a firm can protect themselves for financial loss and focus on how to
increase the profits and reduce the production cost. PESTLE analysis is the simple and
basic analytic tool which can be conducted by the marketers of the organisation external
expertise or researcher is not required to conduct the PESTLE. Therefore it helps the
organisation in saving the additional cost. Economic factor of PESTLE analysis describes
the economic stability of the country, inflation rates, exchange rates which helps the
company to make changes in these pricing strategies to foster the revenue of the firm.
Thus PESTLE analysis is the most cost effective tool for the organisation as it is done by
the employees of the organisation (Simões, 2020). Exploit opportunities:PESTLE analysis is the rewarding tool to grab the fore coming
opportunities of the business to gain competitive advantage. Technology factor of
PESTLE analysis help the organisation to evolve with the rapidly changing technology
and gain the advantage in the market. Business organisation are always looking for
opportunities but lack in proper analyses and research therefore PESTLE analysis is the
perfect tool to grab opportunities and vanish threats with those opportunities. PESTLE
analysis is useful in analysing external market trends which leverage organisation to enter
new market. Increasing concern for the environment is the environmental factor giving
the opportunities to the business to grow sustainable and organic to protect the
environment and also enter new customer base(Pan, Chen and Zhan, 2019). Thus
PESTLE analysis is the tool to grab opportunities and eliminate the threats to consistently
acquire the financial goals and objective of the company. Identify risk factors:Using PESTLE analysis one can easily recognise all the threats and
weaknesses associated with the business in terms of external factors that can hinder the
growth and profitability and risk the survival of the business organisation. PESTLE
analysis is useful for the business organisations to identify there risk and eliminate them
with strengths and opportunities before it obstruct the business financially(Vlados and
Chatzinikolaou, 2019). PESTEL analysis make the organisation individuals aware about
4

the drastic changes in the environment which can bring the risk and threat to the
company's long term productivity, customer base, brand image and financial statements.
Identifying the risk from the PESTLE analysis helps the organisation to become safe and
secure from the loss and any damage to company's brand identity. Thus PESTLE analysis
of the organisation decrease the risk ratio and increase the profits of the organisation. Deeper understanding:PESTLE analysis is the vast fact finding concept which analyse
the whole external market of the business organisation. Understanding political, legal
social, economic, environmental and technological factors in PESTLE analysis provide
the complete knowledge about the external factors of the environment and there
importance and impact in the business organisation (Shtal and et. al., 2018). PESTLE
analysis foster the deep understanding about the business strategies, their competitor's,
upcoming changes and threats. PESTLE analysis helps the business organisation in
identifying the factors influencing the productivity and profitability of the business.
PESTLE analysis provide deeper understanding about the business tactics, their
economic conditions, social well being and enhancement with technology. Thus PESTLE
analysis beneficial to organisation in understanding the every minute aspect of business.
 Develop critical thinking: PESTLE analysis helps the business organisation to broad
there thinking process and think more strategically. It is important for organisations to
spread their knowledge and thinking in all directions of the environment and do that
PESTLE analysis is useful as it covers all the external factors of business environment.
As the external environment is changing consistently and rapidly and business are
required be always ahead therefore, all the factors of PESTLE analysis are helpful in
planning the strategies for the business development and to face those changes(Dunning
and et. al., 2019). PESTLE analysis expand the thinking, as individual has full knowledge
of the factors and there influence on firm which helps business organisation in
developing critical strategies which will increase revenue of the firm and helps in quick
decision making. Critical thinking with PESTLE analysis provide innovative ideas to
business organisation to mitigate its threats and weaknesses. Hence, PESTLE analysis
develop critical and strategic planning in business organisation.
5

TASK3. Examine the use of PESTEL framework to analyse the external environment of
Rightmove PLC
PESTLE analysis is the framework in which various factors like political, social,
economic, technological, environmental and legal factors of external macro environment are
discussed and analysed in context of the organisation to recognise and grab the opportunities of
the organisation to gain competitive advantage and also to mitigate the threats of the
organisation. PESTLE analysis is always conducted by keeping in mind the current market
conditions and future possible aspects (Twaroch and et. al., 2019). PESTLE analysis is helpful in
knowing the market trends, new technologies, political mergers and issues, economic
stability ,government policies and laws and legislations of the country in which company
operates. PESTLE analysis to analyse the external environment of Rightmove PLC: Political factors: Rightmove PLC is the UK's biggest real estate oversea online property
organisation based in London. Political factors like labour laws, import- export trade,
political stability, changing governmental policies can extremely influence and affect the
long term sustainability, growth and profitability of the Rightmove PLC. The business on
various country platforms create a political sensitivity for the Rightmove PLC. Right
move PLC revenue is dependent on UK market, political instability with Brexit has very
minor impact on Righmove business. Rightmove PLC should protect also be aware about
the intellectual property rights of other countries also to avoid any illegal activities and
develop the strategies accordingly. Economic factors:Rightmove PLC is the UK domicile firm therefore any changes in
economic factors of UK will directly affect the performance, profitability and revenue of
the firm. Economic factors like inflation rate, exchange rates, employment rates, labour
market condition should be considered by the Rightmove for reckoning the growth
trajectory of the industry and organisation. Due to COVID-19 the economy of world and
UK was highly declined and thus impacting the economy of real estate industry and
organisation. High GDP of UK showcase the ability of the consumer to pay which in turn
boost the revenue of the Rightmove PLC. Fluctuation in the exchange rates can be reason
of serious risk to the Rightmove PLC. But a good financial market and good economic
conditions of UK will strengthen the capital of Rightmove and also help them in raising
capital by entering new market.
6

 Social factors:Business environment and culture derives powerful influence from the
social standards, values and trends (del Carmen Pardo-Ferreira and et. al., 2020). Social
factors like demographic trends, age, gender, customer spending ability, etc. can help the
Rightmove in managing their strategies and also to achieve there financial goals.
Demographic trends like population, migration trends can help the Rightmove in deciding
the which market segment to be targeted. Due to COVID-19 the social trend of online
shopping is increased which befits the Rightmove online portal strategy. Hence changing
social factors are helpful to Rightmove in expanding the customer base and also rise its
capital. Technological factors:For every company, analyzing this factor is very important,
because the world is rapidly changing technology and gaining a foothold in technological
progress (Nandonde, 2019). Rightmove PLC believes in continuing to innovate for
customers and consumers with changing technology to make the process of home buying
and lending easier and safer. Rightmove operates in fast moving online portal where
technological advancement are well adapted and which gives best advertiserservices,
promotions, and engae more consumers. Hence , considering this factor will increase the
revenue of the firm, improve operating efficiency and foster the innovation process in
Rightmove PLC. Legal factors: A firm cannot enter the new market without knowing its legal policies and
structure, therefore legal analysis is mandatory to every organisation to start or expand
the business (Kidyaeva, 2020). Rightmove PLC is the real estate company which require
all the legal formalities before buying, renting, leasing the property or home to customers
and consumers. Hence legal laws like intellectual property law, consumer protection law
and cyber security laws are well adapted by the Rightmove to operate the business
ethically and legally without hindering customer trust and loyalty in firm. Hence deep
understanding of legal rules and regulations of all the countries in which Rightmove
operates is compulsory to be analysed.
 Environmental factors:Environmental awareness and changing climatic conditions have
suddenly outshine this factor in the companies and have made environmental analysis
crucial in PESTLE analysis (Mugurel-Alin, 2020). Rightmove PLC operates in various
countries therefore knowledge of environment and climate of those countries is important
7

for the business of Rightmove. This factor also include competitive environment,
Rightmove PLC is working in highly competitive market where there are low barriers to
the entrants which can effect the revenue of Rightmove.
CONCLUSION
It is concluded from the above report that the business environment plays a vital role in
growth and success of the organisation. Board of directors of the firm are the individuals that sets
rules and regulations of the firm to operate day to day activities of the business. Board members
directs and controls the powers and duties of employees. Timely and consistently PESTLE
analysis of the organisation is important as it helps the organisation like Righmove PLC in
analysing the external factors affecting the smooth functioning of the firm and also creating
threats and weaknesses for the organisation. Hence, Pestle analysis gives deep understanding
about business and there competitors and also exploit opportunities for better performance of the
organisation.
8

References:
Books and Journals
Christodoulou, A. and Cullinane, K., 2019. Identifying the main opportunities and challenges
from the implementation of a port energy management system: A SWOT/PESTLE
analysis. Sustainability. 11(21). p.6046.
del Carmen Pardo-Ferreira, M and et. al., 2020. Using functional resonance analysis method to
understand construction activities for concrete structures. Safety Science. 128. p.104771.
Dunning and et. al., 2019. Technological change and estate agents’ practices in the changing
nature of housing transactions. Housing Studies. 34(5). pp.849-867.
Halbert, T. and Ingulli, E., 2020. Law and ethics in the business environment. Cengage Learning.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Ju, Y. and Wang, Y., 2018, December. Research on Logistics Real Estate Operation Mode under
REITs. In IOP Conference Series: Materials Science and Engineering (Vol. 452, No. 3,
p. 032045). IOP Publishing.
Kidyaeva, A.U., 2020. Sustainable development and growth of companies amid uncertainty in
the external business environment. Entrepreneur €™โ s Guide.
Mugurel-Alin, M., 2020. The management of external business environment interaction with the
company. sustainable development.
Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence. 38(4). pp.54-61.
Pan, W., Chen, L. and Zhan, W., 2019. PESTEL analysis of construction productivity
enhancement strategies: A case study of three economies. Journal of Management in
Engineering. 35(1). p.05018013.
Shtal, T and et. al., 2018. Methods of analysis of the external environment of business activities.
Shtal, T and et. al., 2018. Methods of analysis of the external environment of business activities.
Simões, E.N., 2020. A decision support system application module-for PESTLE analysis-
competitive intelligence algorithm (Doctoral dissertation).
Twaroch, F.A and et. al., 2019. Investigating behavioural and computational approaches for
defining imprecise regions. Spatial Cognition & Computation. 19(2). pp.146-171.
Vlados, C. and Chatzinikolaou, D., 2019. Methodological redirections for an evolutionary
approach of the external business environment. J. Mgmt. & Sustainability. 9. p.25.
9