PESTLE Analysis and Legal Factors for Talk Talk

This report is focused on conducting a PESTLE analysis for Talk Talk plc, which operates in the telecommunication sector. The analysis includes identifying potential threats and opportunities related to political, economic, social, technological, legal, and environmental factors affecting the company's operations. Additionally, it examines the importance of considering these external factors in business decision-making and how they can impact a company's growth and profitability. Specific attention is given to legal factors such as anti-trust laws, copyright law, employment law, data protection law, and health and safety law.

Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1 Structure and overview of company........................................................................................1
2 Effect of External Environment on Organisations...................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business environment is a collection of both the factors i.e. internal factors and external
factors which determines the firms operational conditions. It covers components such as
government, competitors, customers,suppliers and the cultural, political, social,legal and
technological conditions.. Talk Talk PLC company is an organisation which supply the pay
internet services, telecommunications, mobile network services and TV to the enterprisers and
consumers in UK. As a grant of Carphone Warehouse , it was established in 2003 and its
headquarters is in London. This reports explains about the overview and the structures of the
Talk Talk PLC company. Factors that effects the external environment of the firm with the
help of PESTLE analysis are also explained in this report.
MAIN BODY
1 Structure and overview of company
Overview of the company:
Talk talk company is a parent organisation which leads the value for B2B
telecommunication provider and money user in UK. It was established in 2003 having its
headquarters in London. They provide value of money fibre, TV, mobile, landlines and
broadband with the simple plan structure. It serves reliable, affordable, fair and simple
connectivity for every users. As they also provide the mobile services to their user so they are
planning to move for the 4g network. Also a B2B telecom provider which serves their needs to
approx 180000 business and public sector customers all over the country. They are usually
known as the talk talk group and is a public limited company. They think that they form the
advanced digital society. It is listed under the London stock exchange.
History of the company:
It is a young organization which had the long-history, they feel proud as they transform
the UK telecoms within a short period of time. In 1995, as a telecom resellers an Opal telecoms
were formed. During the period of 2002 – 09, for the fast growth of the telephony vendor the
carphone warehouse purchases the opal telecoms, after the government passes 2003
communication act , the talk talk launches as a consumer brand to promote the competitors
brand so that they discontinue the telecom market. It provides unlimited free calls for all the talk
talk users which is the really disruption for the competitors, for having the good innovation and
enterprises opal wins the queen's award. Also have local loop collection which allows the
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supplier they may place their own equipment in telephone exchange and also acquires the
telequip, one tel and vartec, for transforming the UK's residential market. It launches the free
broadband. It also sponsors the X factor whose relationship were the strength of the company.
And from 2010-16, it takes many steps for the benefits of the organisation like it demerges from
the carphone warehouse, homesafe were launched. with the YouView set top box talk talk tv
introduced in the market, after that they set up the network which obstructed the nuisance calls.
They also planned to get 1GB fibre network to York having joint venture with cityfibre and
sky. They were more concerned for SIP, and permit about 3.5 million users talk talk rolls out
talk safe so that they can use their voice as a password rather than providing personal details for
their identity.
Organisational structure:
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Organisational structures simply brief that to whom the individuals should report or
concern if any problem occur. This were determine by many factors such as geographical
location, how different product were delivered, services that talk talk company offers and also
the size of the organisation. Talk talk company have the functional organisational structure,
they divided the employees according to their specialised area, as the functional manager(who is
expertise in their fields) supervise their employees. The functional organisational structure
demonstrate the president, vice president, customer services, administration and also the
different departments. All departments have their department heads which is accountable for
the performance of their department. Sir Charles Dunstone is the founder of the talk talk
company, who was appointed in 2010 and in 2017, he became the executive chairman of the
organisation. John Gildersleevees, a deputy chairman who became the board member in 2010.
Tristia Harrison of the company joined the board in 2014. the Kate Ferry appointed as CFO in
2017. There are 5 non- executive directors in the company, they are John Allwood, Cath Keers,
Sir Howard Stringer, Roger Taylor, And Last But Not The Least Nigel Langstaff. Also having
one senior independent director, Ian west and one company secretary and group general counsel,
Tim Morris. They follow the functional organisational structure so that it bring down the
communication gaps. As each employees were allotted their responsibilities so that no
duplication of work occur. It is convenient for all the managers to review the works according
to their departments. It is the assets for the firm as the works were specified according to their
specialisation and skills which encourage and motivate the employees to work efficiently. It also
helps to increase the ratio levels and the operational ratio.
The talk talk company is a UK company is regulated under the UK company law and is
governed by the UK corporates governance code(it's a portion of UK company law which set the
good governance principles and also have the goal that the company should be listed in the
London stock exchange), insolvency act 1986 (any matters which is related with the corporate
and personal insolvency comes under this act) and the European union directives (Bovee and
Courtland, 2012).
2 Effect of External Environment on Organisations
External environment is an environment which composed of all the outside factors, which
impact the activities of business. The evaluation of external analysis is important of every
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organisation as well as for Talk Talk Telecom also for sustaining in the market (Hess and
Rothaermel, 2011). The external environment can be broken down into two types:
Micro Environment:
The factors which directly affect the operations of the company, are the part of micro
environment. The suppliers, customers, marketing intermediaries, financiers and public
perception comes under the micro environment (Becerra-Fernandez and Sabherwal 2014).
Macro Environment:
The major external and uncontrollable factors that impact an organisation's decision
making and affect the strategies, plan and policies of the organisation. These factors are
PESTEL, which stand for Political, Economical, Social, Technological, Environmental and
Legal factors.
Importance of PESTLE analysis for the organisations
PESTLE analysis is strategic tool which is used to evaluate the macro environment of the
organisations. The changes in the macro environment factors can have the direct impact on the
Talk Talk Telecom Plc, so it is essential for the company to analysis of these factors and
company can make the strategies accordingly. These factors can make impact on the individual
firm's competitive advantage or overall profitability levels of the telecom industry. As this
analysis will provide Talk Talk Plc a simple and easy to use framework for the organisation. It
can help the company Talk Talk Plc to decrease the impact of potential threats of the company.
The main benefit of this analysis is, it provides a mechanism that enables the company to explore
new opportunities. This analysis can help the company Talk Talk Plc to entering in new market
both nationally and globally. It will help the Talk Talk Plc for formulation of strategies according
to the changing environment (Sekaran and Bougie 2016).
PESTLE analysis of Talk Talk Plc
The environment is dynamic, so sustaining in the market is difficult for the organisations.
So for finding new opportunities and to reduce the impact of potential threat on the company,
Talk Talk Plc have decided to go for PESTLE analysis. This analysis provides the details about
the operating challenges that Talk Talk Plc will face in the environment other than competitive
forces. The analysis is described as below:
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Political Factors
Political factors are those factors which are related with the policies of Govt. which can
make the impact on the business. Political factors plays a vital role in deciding the factors that
can impact the long term profitability of Talk Talk Plc. This company is operating in the dozens
of countries and explore itself to different types of political environment and system risk. As it is
compulsory for the company to analyse the political factor before entering into any new market.
For an example, recently UK has exit from the BREXIT, so it will have the big impact on the
organisations. Similarly the Talk Talk Plc will face the political issue as there will be changes in
the Govt. rules and regulation, there might be chances changing in trade regulators and tariffs,
related to the telecommunications (Cheng and et. al., 2012).
Economic Factors:
Economic factors are those which are related with the countries inflation rate, saving rate,
interest rate and foreign exchange rate etc. which have the direct impact on the organisations
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plans and policies. Talk talk Plc can use the country's economic factors such as growth rate and
inflation rate and industry's to know the growth of the telecommunication industry as a whole.
And with the help of these indicators company can plan their budget for the future. As for an
example, Talk talk Plc is operating in the country UK, which has the highest GDP rate, more
productive economy and skill labour force also. So company can use these factors to grab the
more market share and they can increase their profitability also(Kern, 2013).
Social Factors:
Social factors are those which are related with societies culture, demographics and
interest of the consumers. So the culture of society can make an impact on the organisation in the
environment. Shared beliefs and attitude of the population plays a vital role in knowing the taste
and interest of consumers. So Talk talk Plc should analyse this factor to design the marketing
message for the telecom industry consumers. As for an example, there are other companies also
in telecom sectors, so to be competitive in the market talk talk Plc have decided to analyse. With
the help of analysis they came to know about the customers needs and they started providing low
prices plans.
Technological Factors:
Technology is fast disrupting among various industries across the board. A firm should
not only do technological evaluation but also the speed at which technology disrupts that
industry. As technology is obsoleting very rapidly so to get competitive advantage one must
always come up with innovative technology (Leih, Linden, and Teece 2014). The talk talk plc in
telecommunication sector where network changes very frequently. As an example, with the help
of analyses of technology factor, talk talk plc have now decided to enter in 4g network and they
have started providing the set top box services also to get the competitive advantage.
Environmental Factors:
Different markets have various norms or environmental standard for protecting the
environment. And these norms can impact the profitability of an organisations in marketplace.
The environment factors includes weather, climate change, recycling, waste management in
industry and laws related to environment pollutions. So companies should analyse these factors
so that they can operate according to the laws. For example, talk talk plc in telecommunication
sector, the radiation comes from the mobile network which affect the environment as well as
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human body also. So there is law relating to this in UK, which should be analysed by the talk
talk plc so they can function smoothly and also they can helps in saving environment.
Legal factors:
The legal factors are the related with legal rules which is governed by the government for
the different industries. A firm should carefully evaluate these laws before entering in any new
market. These laws have direct effect on the working of companies and they can effect the plan
and policies of that company also. For example, talk talk telecom should have also consider
these legal factors, anti trust laws in telecom sectors, copyright law, employment law, data
protection law and health and safety law. As these factor can help the talk talk plc to grow
substantially by following these laws. The breach of any law can cause big penalty for the
company, which effect on the profitability of firm.
CONCLUSION
The report conclude that, the importance of PESTLE analysis is very important for the
organisations, to reduce the effect of the potential threats and to grab the new opportunities. The
analysis of these factors provide the knowledge of all external factors which can affect the
organisation's internal environment. The company Talk talk provide value of money fibre, TV,
mobile, landlines and broadband with the simple plan structure. It serves reliable, affordable,
fair and simple connectivity for every users.
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REFERENCES
Books and Journal
Becerra-Fernandez, I. and Sabherwal, R., 2014. Knowledge management: Systems and
processes. Routledge.
Black, J. S., Morrison, A. J. and Gregersen, H. B., 2013. Global explorers: The next generation
of leaders. Routledge.
Bovee and Courtland, 2012. Business Communication Today, 10/e. Pearson Education India.
Cheng and et. al., 2012. Supply risk management via guanxi in the Chinese business context:
The buyer's perspective. International Journal of Production Economics. 139(1). pp.3-
13.
Hess, A. M. and Rothaermel, F. T., 2011. When are assets complementary? Star scientists,
strategic alliances, and innovation in the pharmaceutical industry. Strategic
Management Journal. 32(8). pp.895-909.
Kern, E. R., International Business Machines Corp. 2013. Autonomic scaling of virtual machines
in a cloud computing environment. U.S. Patent 8.572.612.
Leih, S., Linden, G. and Teece, D., 2014. Business model innovation and organizational design:
a dynamic capabilities perspective.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Online
Business Environment. 2018. [Online]. Available through:
<https://www.oreilly.com/library/view/business-environment/9788131775080/>
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