Business Environment: Governance, PESTEL Analysis, and National Express

This document explores the governance and structure of National Express, assesses the importance of PESTEL analysis, and analyzes the external environment using the PESTEL framework in the context of National Express. It examines the political, economic, social, technological, environmental, and legal factors that impact the company.

Business Environment

Table of Contents
Introduction......................................................................................................................................1
Task 1 ..............................................................................................................................................1
Examine how the company is governed and structured..............................................................1
Task 2 ..............................................................................................................................................3
Assess the importance of PESTEL analysis...............................................................................3
Task 3 ..............................................................................................................................................5
A) PESTEL framework to analyse the external environment.....................................................5
B) Analysis of PESTEL framework in context to National Express..........................................6
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

Introduction
Business environment in organisational context include different environment of the
company which impact its working in an economy either directly or indirectly to the company.
However, the both types of environment that is. Internal and external environment have it own
significant impacts depending upon the type organisation and the area of the company where
they operate (Hamilton and Webster, 2018). It is considered that internal factors of the
environment have significant control by the company. That means company can change them or
mould them as when they need. But in External factors of environment company have less or no
control over them. Hence they are the most important for company as they need continuous
attention in order to maintain the competitiveness of the company and also avoid any
complexities. In order to gain more knowledge about business environment and its impact on the
business the researcher have use National Express Group, as exemplary company. With the help
of this researcher will attempt given tasks. Report will highlight business environment in
context to National Express and its environmental significance and finally will use PESTL
framework.
Task 1
Examine how the company is governed and structured.
National Express Group one of the major public transport company which function with
bus, coach and rail services in the UK, Continental Europe, North Africa, North America and the
Middle East. The company operate as transportation service company around eight nations
namely; UK, USA, Spain, Germany, Morocco, Canada, Switzerland, Bahrain. Specifically the
company share strong foothold in UK and Spain (National Express our- businesses. 2020). The
company is the second largest school bus service provide in America.
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Illustration 1: Our Business

Also urban bus service in USA followed by Spain, Morocco, Canada and UK.
And Rail service in Germany.
History of National Express . Around 1992 the company listed itself on London Stock
Exchange. The company then put all its effort towards is one of the significant objective of
becoming UK's leading transportation company and so the company acquire West Midlands
Travel into National Express in 1995. With that in mind company at first diverse its operation
from bus to rail. In 1996, company enters in Rail market in UK. After that the company try to
enter different international market to expand it business globally in 1998, National Express
enter into US market to capture school bus service by acquiring Durham School Service. By the
year 2004 company entered in London for city bus service by acquiring Travel London. By
2007, company acquired two companies to grow its operations. In 2015, company started joint
venture with Bahrain Public Transport Company in Bahrain and in the same year company enter
into rail market in Germany. By the year 2019, National Express made strategic investment in
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Illustration 2: Our Business
Illustration 3: Our Business

WeDriveU in order to develop shuttle bus service. In this year company targeted to enter into in
Rabat and Casablanca in Morocco. Lastly in the year 2020, company acquired The Lucketts
travel Group in South England. Also the company launched National Express Transport
Solutions (National Express our history. 2020).
Operations. The company either own or lease bus, coaches or trains in order to deliver
transportation service to the people. Company ensure good maintenance and global standards in
its services. Currently the company own strength of 51,000 employees world wise and total
31,700 vehicles are operated.
Governance. This provide company a framework within that board set its values and
make efforts to deliver them in order to have long term success for the company and its different
stakeholders. It is the responsibility of the chairman and company's CS to set board's and
committee's agenda or change them as per needed. They ensure all necessary matters as per
priority and attention need in any approval and discussion (National Express our governance
framework. 2020). The structure of the board as follows:
1. Shareholders
2. Chairman of National Express
3. Board Members
4. Board Committees
5. Group Chief Executive
6. Group Executive committee
Apparently company's chairman is Sir John Armitt since 2013. He is responsible for for
overall leadership of National Express and governance. His particular area of responsibility is to
make sure all the strategic matter must be comply with company and its operations. The Group
Chief Executive of the company is Jose Ignacio Garat from the year 2020. His primary
responsibility is to make sure and manage all the group operations and company's business
model. He ensure that company's board is fully valued.
Task 2
Assess the importance of PESTEL analysis.
PESTEL is one f the widely accepted tool that help companies to analyse it external
environment effectively. Since the acronym stands for Political, Economical, Social,
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Technical,Environmental and Legal factors. The analysis can help company in providing details
regarding different types of operating challenges may face prevailing to macro environmental
factors instead any competitive forces (Mbithi, Muturi and Rambo, 2017). Such as the analysis
tool address each factors answer which provide while use this tool.
In Political Factor:
 Is there changes in financial state of the company?
 Is there changes in statute law that directly impact on the company?
 Is there any modification in trade agreements with countries, customs or taxation affect
company?
 Does change the current government can impact on company and its functioning?
In Economical Factor:
 How steady is the current economy of the nation?
 How the globalization moving the economic environment of any country?
 Do people, businesses have easy access for credit facilities?
In Socio- Cultural Factors:
 Are people from particular society changing their purchasing habits?
 How any particular spiritual beliefs and life-style choices affect the company?
 Is there any trend is going among people?
 Does increase in rate of emigration and immigration affect the organisation in the nation
and on current work force?
In Technological Factors:
 Whether any new technological changes is trending?
 Does any competitors of the company early access to new technologies that result in
decrease in competitive advantage?
 Is there any technological evolution that could affect the industry?
In Environmental Factors:
 Values of company's stakeholders?
 Are there environmental difficulty currently going at both international and national level
also can say external environment?
 What can be the impact of current climactic change among organisations?
 Company's internal behaviour towards company and its operations?
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In Legal Factors:
 Is there new environmental permission requirements for company to set up any new unit?
 What are the specific regulation may need for industry that may affect company?
 Is there any change in employee law?
From above questions, through PESTEL framework can be drawn easily. Thus the
significance through such questions can be analysed. Since a company work in such a dynamic
environment that for its survival and effective working organisation must have these question in
their mind. Also these factors of macro environment are not steady instead it may fluctuate with
change in time and may new questions take place (Feimi, Kume and Pulaj, 2016). For company
to grow smoothly and operate successfully need to examine the macro or external environment
which play a critical role in success of the firm. After that they need to make strategies to
eradicate any issues they may feel can effect the functioning or utilize opportunities, may this
can be proof advantageous for the company's prospect growth.
Task 3
A) PESTEL framework to analyse the external environment.
Political Factors: This factor from the framework analyse how and up to what extent a
government of any nation interfere in the industry or an economy. All the governmental
influences can be categorized here (Kolk, 2016). Thus it include policies from government,
corruption rate in the country, foreign trade policies, barriers on trade, political stability and
instability etc. Also any nation's intense impact on its education system, health potentials and
infrastructural development etc. come in this category. Hence, all these factors need to taken
consideration while assessing attraction of the expected market.
Economical Factors: This factor of the framework determine the economic performance.
Which include; growth, inflation rate, interest rate, disposable income among consumers, rate of
unemployment in the current economy etc. have long term and significant consequence on the
company when they operate in such environment (Sammut‐Bonnici and Galea, 2015). Overall
the economical factors affect the total demand ans supply model and so the purchasing power of
people.
Social Factors: The social factor include demographical characteristic of a region such as
social beliefs, cultural influences, customs, age, population distribution, income distributions etc.
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among the people of the nation. Hence this factor from the model help comp-any to analyse its
market and the type of people when they target to enter any new area.
Technological Factor: In this factor any change in technological environment is
categorized here. Any innovation or change in technology from user to advance mode can bring
a wave of improvement in the working method of people in organisations. This factor influence
decisions among company whether enter in certain industry or not (Sijabat, 2019). Hence it is
not possible for company to always adopt newer method of technologies in its company as some
sometimes they may affect the costing of product and also the ability to afford such technology
in its company. Which bring negative impact as the industry may adopted such development and
advancement in their organisations. Thus obsolete technology can have harsh impact on the
company's profitability.
Environmental Factor: This factor have become one of the most crucial factor in the
framework. Since company while operating an environment have lots of impact on the natural
environment. Hence it become the global concern for people and companies how to reduce
negative impact on natural environment. With alarming climate change is demanding people
show its concern eight now because everything will go waste if we fail to notice the emergency
care not taken at right time (Halbert and Ingulli, 2020). Increasing scarcity of natural resources,
increasing pollution or carbon emission rate into air, damage in natural ecology must be
addressed. Therefore many countries have mandate CSR activity to carried in order to grow
company in sustainable manner.
Legal Factors: These factor of the environment include laws related with employment,
copyright and patent, health and safety laws etc. Company in order to function without any legal
barriers and ethically conduct business, they need to comply with all the legal formalities
existing or may in future going to change must be carefully apply them.
B) Analysis of PESTEL framework in context to National Express.
In order to understand the key external environmental constraints and opportunities on
National Express Group, the PESTEL framework is now will be discussed on the basis of
company's Annual Report in 2019. This will provide true reflection on the current situation of
the company in context to all the external environment they may facing and from there it will
provide the state of the company in following framework:
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Political: At National Express, company have identified changes in government policy,
funding program or the legal and regulatory framework may result in functional market changes
or impact the group operations in terms of reduced profitability, increased costs and also
decrease in operational flexibility of the company. Due to new in Spain, as company wants to
open franchisee then company hesitate its position there. Fiscal cost of failure to comply with
changing regulations or legislation have threatening the company and its operations in different
place.
Economical: Decrement in economic condition possibly impacting on demand for
arbitrary travel higher than before. Thus, improve in economic conditions may impact the
company’s ability to recruit people and other staff or it can cause inflationary pressure on cost of
the company. Due to material contraction in investment-level credit markets could impact the
company’s fluidity. The Brexit have continued uncertainty around the terms of the UK’s exit
from the EU creates generic and circumstantial peril in company's market in UK, Spain and
Germany.
Societal: Change in consumer demographics impact on the demand and the nature of
services required from the company. Expected indirect impact from a general reduction in the
public’s craving in travelling is reducing the demand and revenue of the company. For that,
company is trying to establish close involvement with government authority and industrial
relation. Company have identified ageing among population in major markets creates additional
para-transit facilitating opportunities for the company.
Technological: Major Failure in IT could disrupt operations and lead to loss of revenue,
especially in the coach businesses. Also, Increasing expectations of customers to be able to buy
tickets and manage their travel plans through a variety of digital platforms. Therefore company
need to adopt leadership which can adopt new technologies that enhance company's service
among its existing and attract new customer from it.
Environmental: Loss in primal location to either a man- made risk such as fire or any
natural disaster like; hurricane or flood can result in asset and revenue loss for the company.
Thus company need to cover such calamity with insurance available. The geographical
diversification of the National Express have furnish with natural fence to such risks.
Legal: Non- abidance with regulations can create legal and financial risk for the
company. Therefore company intimate claims management and legal teams in each department
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for such legalities. In breaching of the EU Regulation or GDPR of company could consequence
into damage of reputation. For that purpose the GDPR compliance plans made in point, tailored
in a way to give exposure to every divisions of the company.
Since these factors influence are not directly influence the company but ignoring these
can be damaging to company. For strategically successful, business need to work with all the
essential factors of external environment. Otherwise company's market may take over by its
competitors. The prime benefit of the company through PESTEL framework that is enable
company to identify opportunities lie before them (Rao, 2021). Thus in order to reduce external
risks PESTEL model can help in strategic planning for the company which can ensure business
match with the factors for the success.
Conclusion
From above report it can be summarise that National Express Group need to concentrate
on overall external environment of the company. However from the company's annual report the
priority can be observe. Proper strategies and their implementation is important for the success of
the company. Since company believe to be leading transporting company in UK and America but
they are not stopping there thus to maintain its track record company must be familiar with all
the macro environmental changes that constantly taking place.
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References
Books and Journals
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Mbithi, B., Muturi, W. and Rambo, C., 2017. Macro environment moderating Effects on
Strategy and Performance.
Feimi, D., Kume, V. and Pulaj, E., 2016. Macro environment and innovation in service sector.
The evidence from Albanian context. European Journal of Sustainable
Development. 5(2). pp. 137-137.
Halbert, T. and Ingulli, E., 2020. Law and ethics in the business environment. Cengage Learning.
Rao, S., 2021. International business environment. Himalaya Publishing House.
Sijabat, R., 2019. Macro-environment analysis of the tourism industry in Indonesia: findings
from the PEST analysis. Innovative Issues and Approaches in Social Sciences.
Sammut‐Bonnici, T. and Galea, D., 2015. PEST analysis. Wiley Encyclopedia of management.
pp. 1-1.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1). pp.
23-34.
Online
National Express our- businesses. 2020. [online] Available through:<
https://www.nationalexpressgroup.com/about-us/our-businesses/ >
National Express our history. 2020. [online] Available through:<
https://www.nationalexpressgroup.com/about-us/our-history/the-group/ >
National Express our governance framework. 2020. [online] Available
through:<https://www.nationalexpressgroup.com/about-us/corporate-governance/
governance-framework/ >
Annual Report. 2019. [online] Available through:<
https://www.nationalexpressgroup.com/media/3966/national-express-annual-report-and-
accounts-2019.pdf >
PESTEL analysis. 2018. [online] Available through:< https://blog.qooling.com/pestel-analysis-
context-of-the-organisation/>
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