Significance of Business Environment and Pestle Analysis for Pearson Plc

This report discusses the significance of business environment and the use of Pestle analysis for Pearson Plc. It provides an overview of the company's governance and structure, as well as the importance of handling complex business tasks. The report also uses the Pestle framework to analyze the external environment of Pearson Plc.

Business Environment
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EXECUTIVE SUMMARY
In this report, it has been identified the significance of business environment and consider the
analysis through Pestle framework or tool. It is mainly focused on the structure of Pearson Plc.,
its management and structured. It has been analysed about the brief overview of company and its
history. In this report, it has been discussed the importance of pestle analysis for business and
identify why it is important to handle complex business tasks. Furthermore, use the pestle
framework to analyse external environment of Pearson Plc.
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Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
TASK 2............................................................................................................................................6
TASK 3............................................................................................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13
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INTRODUCTION
A business environment is define the collection of all external as well as internal factors
such as employees, consumers, supply and demand etc. these are applied in the organization to
acquire more information or data. Environment of business means that influence enterprise
decisions, also examined the forces of external factors. These are directly controlled or managed
the outside of business and do some little change themselves. The report will discuss about the
concept of business environment, analysis through Pestle framework. It will described the
structure of Pearson Plc. Enterprise, its management and structured. It is explained the overview
of company and its history. The documentation will discuss the importance of pestle analysis for
business and identify why it is important to handle complex business tasks. Furthermore, use the
pestle framework to analyse external environment of Pearson Plc.
TASK 1
Explain how chosen company is governed and structured
Overview of Pearson plc.-
Pearson plc. is based on the British multination publishing and Education Company, it’s
headquartered in London, England. This company was established as construction business in
1840s but switched to publish in 1920. It is the largest education company and provide the
various kind of publishing facilities as well as services. The company was founded by Samuel
Pearson in 1844 as building and establishing a strong position in marketplace (Chan, Berger and
Man, 2020). Usually, Pearson has been categorized into different streams of business such as
schools, higher education and professional areas like textbooks or digital technologies used by
student, teachers. The company has established the owned education publishing and assessment
service to the schools, corporations and students directly. Sometimes, it including own
educational media brands such as Addison-wesely, ecollege, longman and others. Pearson plc is
establishing a strong position in marketplace and introduce their best publishing services in
financial times. In July 2011, A Pearson announced creation of Pearson college, a British degree
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which provider on the basis of London. The organization has been acquired the connections
education and also agreed to sell its 50% stake in the international limited to the London stock
exchange.
In Pearson plc, The Board of director means that can easily maintains a formal schedule on
the specific matters, especially reserved for its decision, which is approved or review annual
basis. Basically, it has been calculated approximately 10-15 board of directors but It will change
according to the requirements of business (Borojo and Yushi, 2020). Moreover, it has been
identified 7 to 8 executive and non-executive directors in the organization. The Chairman of
Pearson* Plc is Sidney Taurel and chief executive is Andy bird, CBE.
The global education publisher Pearson has been appointed the director through media
channel, identifying the suitable internal or external job requirements. Sometimes, Non-
executive and executives plays important role to select a director of Pearson plc. This process
was done on the internally.
(Pearson plc.) Organization structure-
Under the sole proprietorship as new structure of Pearson Plc. It able to organized around
three global line of enterprise such as school, higher education and professionals. These are
primarily embrace the financial times business (Borojo and Yushi, 2020). According to the
geographic market level, it has been categorized into different ways: North America, growth and
core. Pearson plc. Was adopting the new structure in order to provide the better publishing
facilities of consumers. In future, Pearson’s future will look as identify different from its past,
with emphasis shifting towards geographically manner.
Pearson Plc has been focused on the interact with world-class authors, government,
institutions and other regulatory bodies. This can help for developing an appropriate content,
assessment and service capabilities. Whenever changing the business structure of Pearson
Company in which increase data drive approach in context of product design. Sometimes, it
enabled the huge advancement in rich content, effective analytics and personalized learning.
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TASK 2
Evaluate the importance of carrying out PESTLE analysis for an organisation
A pestle Analysis is often used as broad fact-finding about the business activities. it is
helping an organization to establish the external factors. This could directly impact on the
decisions –making process of enterprise. As per understanding the external factors, it is possible
to increase the opportunities and minimise threats to the enterprise (Cherunilam, 2020). A pestle
analysis is a kind of framework or tool used by marketers to analyse and monitor the macro-
environmental factors. It is very useful for Pearson Plc. Enterprise to conduct a brief analysis and
then start with own enterprise. If any kind of existing enterprise, it would have a strong
indication on the impact on certain criteria. Sometimes, it is depending on the Global publisher
enterprise that would decision and want to start up a business or currently operating. At that time,
organization would require specific legal as well as political standards that will support to abide
by and other important factors which can directly affect on the business.
Pestle analysis plays important role in the growth of Pearson plc. Enterprise, whether it is
a consider the expansion of product line and opening publisher in location. This kind of pestle
analysis framework will support for examining the external enterprise condition. Sometimes, it is
also making an effective strategies and planning. The importance of pestle analysis in Pearson
Plc Company to validate the importance (Contractor, Dangol and Raghunath, 2020). It is helping
to expand the business priorities within global marketplace. The business owner of Pearson plc.
To identify the changes in political, economic, social, technological, environmental as well as
logical manner. Moreover, pestle analysis framework will help to make an appropriate strategic
plan in term of business expansion.
As per analysis, organization can handle the coordination between different departments
such as sales, marketing, accounts. These are basically controlled from inside: as individual
people can put more efforts in sales to generate accurate revenue. At end, every results have been
depends upon on the individual people working inside enterprise. However, external factors such
as political, economic, social, legal and environmental that are existed and always continue to
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exit without any kind of input. In this way, it is analysis that Pestle framework gain more
importance and achieve desirable goal or objective.
Additionally, it has been analysed the importance of Pestle analysis in the organization. A
certain additional programs have been implemented in the enterprise that support for identifying
the accurate output or results. The best thing about the pestle analysis is that it make easy to
develop more understanding towards external factors, identify the significant impact on the
organizational performance or environmental condition. When it comes to the development of
new innovation, it is very important to think in strategic manner, improve depth understanding of
different factors such as consumer laws, ne technology trends etc. Usually, Pestle analysis is
helping the business to get prepare for all possible threats, risk, which is mainly arise time to
time due to the pressure of external factors. in this way, it is important to change things in the
modern technology such as innovation in a threat, if enterprise does not adapt to innovation in
their business. Hence, it is also losing the market share to its tough competitors (Borojo and
Yushi, 2020). Moreover, pestle analysis is helping to exploit the opportunities that increase from
particular time. For Example- the lower interest rate can be examined in the real estate industry
which exist under economic factors and create an opportunity to increase demand of business in
global marketplace.
An organization is considered the own affect through different external factors. This is
not only directly affect the profitability of enterprise but it is important to improve more
understanding towards performance of enterprise. It is possible aspect to increase opportunities
and minimise threats to the business. Usually, it has been conducted the strategic analysis which
means scanning all external environment to detect or understand board, long term trends. A
pestle analysis is one of the appropriate framework and activity to use the different business
planning situations. Moreover, it encompass with strategic business planning, workforce and
marketing planning. The importance of pestle analysis in organization to assume the proper
documentation that have available when starting a business. This provide the facilities of senior
management team with contextual information or data about direction in which business is
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going, brand position, target growths. Sometimes, pestle analysis is helping to the enterprise
where identify any kind of threats which might have eliminate themselves. Moreover, it can be
identified the actual validity of existing product as well as service. In order to the define as
product development. In Pearson plc., workforce planning is one of the important aspect of
enterprise that aligns organizational activities as well as individual strategies. At that time, it has
been gained the importance of pestle analysis and determine disruptive changes to the enterprise
model. Pearson plc. Is basically face huge changes in their workforce that will increase skills
gap, creation of job responsibilities in books-publishing. Pestle analysis provide the essential
element of climate in the particular situation phases of marketing process. It is always giving the
better priorities within business activities to accomplish their marketing objective. At certain
level, it is also useful for setup specific time frame.
TASK 3
By using Pestle framework to analyse the external environment of Pearson Plc.
Pearson Plc can use Pestle analysis as strategic tool or framework to analyse the macro
environment of organization. Pestle stands for political, economic, social, technological,
environmental and legal factors that impact on the macro environment. in case, the changes
occurs in the Macro-environment factors that can have directly impact on the Pearson plc but
sometimes, it also affected by other players in context of publishing such as books (Halbert and
Ingulli, 2020). Generally, the macro-environment factors can impact on the business as strategy
manner. Afterwards, it will support for identify the competitive advantage and gain more
profitability level within publisher enterprise. Being a part of external analysis when carrying out
the specific strategic assessment and also performed the suitable market study. Pestle is basically
give a brief idea about the diversify of macro-environmental factors. Usually, a company can use
analysis to find the essential need or requirement for enterprise. By perceiving these outside
environment, enterprise can increase advantage, benefits and gain more opportunities to reduce
threats or risk in the organization.
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Pestle analysis provide the great detail about the business operation when identify the
certain kind of challenges. It is important to handle the prevalent macro environment other than
its competitive forces. It is very important for enterprise to use pestle framework for external
analysis. This can provide the brief idea about the demand of potential consumers, particular
legal aspects in term of protection. These kind of things can be examined through external factor
analysis (Halbert and Ingulli, 2020). That’s why, Pearson plc as publishing enterprise can use
pestle analysis framework to find the external factors and their impact on the organization. For
Example- An industry may be highly gained profitable with strong growth trajectory but it would
not require for Pearson plc. If it is situated in unstable political environment or culture.
Political Factor- this factor plays an important role in identifying that can impact on the
Pearson Plc in context of profitability in certain specific marketplace. Usually, Pearson plc is
mainly operating as global publishers for books in more than dozen. But at certain level, this
factor has been exposed the different political environment, system threat or risks. Therefore, it
is very difficult for organization to achieve success in dynamic publishing. Within publisher
industry, there are different countries to diversify the systematic risks in term of political
environment. Pearson plc is the company that can closely analyzing political factors before
entering or investing in the marketplace (Vrbka, 2020). It also examined the political stability
and level of corruption, especially in level of regulation. Sometimes, Pearson Plc Company has
been implemented the anti-trust law which are related to publishing of books. At that time, it has
arises the political instability in the organization.
Economic Factor- this type of macro environment factor is related to the interest rate,
inflation, foreign exchange and other type of economic cycle. These are basically identify the
aggregate demand or investment in the economy. Economic factor is related to the competition
norms, standards that directly impact on the competitive level. Pearson plc. Can use the
economic factor in growth rate while measuring the economic indicators in publishing.
Moreover, company has been analysed that how much investment occurs by potential
consumers. Economic factor that Pearson plc enterprise should consider while analysing pestle:-
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Company has been identified the different type of economic system in multiple countries of
operations. This can define the current stability of enterprise. Sometimes, government has taken
imitative towards free market and provide the related publishing services (Williamson, 2020).
For purpose of financial markets, A Pearson plc need to raise its capital in local marketplace. But
it is always tried to expand the business of Pearson in other countries.
Social Factor- this kind of factor is related to the social culture, environment in order to
examine the current need or demand of individual people in marketplace. Social factor is that
when doing innovative things and impact on the culture of Pearson Plc in the environment
perspectives. Sometimes, every people can share their own beliefs, attitude of large populations,
it plays a great role in how marketers at Pearson will understand the demand of potential
consumers within given marketplace. Moreover, company will focus on the design a better
marketing message in regardless of books publishing. Social factor is related towards leadership
aspect of Pearson plc that should be analysed through pestle analysis. Company has been
categorized the demographics, skill level of large population. A Pearson plc is focused on the
maintain the proper education level and try to maintain a proper standards.
Technological Factor- An advancement of modern technology is the fastest growing
innovation in global marketplace. Technology has been disrupting the publishing industries
across the board area. Over last 5 years, Pearson Plc has been transforming really fast and not
even providing the better chance to establish a business and cope with better changes. This is
consider the effective way to adopt the automation approach in the organization to increase the
more importance in marketplace.
A Pearson plc should not only do their technological analysis of industry but it also speed
at which modern technology disrupts. A slow speed will provide the more time while increasing
the speed of technological disruption. It may give Pearson plc with little time to cope and
achieve profitable rate. As per analysis technological aspect, it involves understanding the
significant impact of recent technological development by Pearson plc competitors. Sometimes,
technology can offer the best price or cost in book publishing (Williamson, 2020). But at certain
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level, it is directly affecting on the price or cost structures in publishing. Moreover, there are
involvement in the value chain structure and improve the overall performance of books-
publishing industry in proper manner.
Environmental Factor- Different markets have various kind of standards, norms related
the environmental condition. It is directly impact on the profitability of Pearson plc. Even within
a nation which often states can have considered the environmental rules and regulation. Before
entering into new markets. It is an essential for Pearson plc. To start their business into existing
market. It should require to carefully evaluate the proper environmental standards within Pearson
plc. Sometimes, this kind of publishing company should consider the different aspects such as
climate change, recycling etc. in the Pearson plc, it has required to increase the waste of
unwanted materials so that it requires to use a proper environmental regulation to improve in
proper manner.
Legal factor- in the different number of countries, It should consider the legal framework or
tool that applicable for purpose of analysing legal factors. A Pearson plc enterprise is not robust
enough to protect or secure the intellectual property rights of enterprise. Therefore, a company
should carefully evaluate before entering within marketplace. This can help for gaining more
opportunities to follows suitable legislation. in the book-publishing enterprise, it is an important
aspect to protect their content otherwise it will chance to loss and stolen by theft. In this way, A
Pearson plc should implement appropriate legislation such as Anti-trust law in publishing-
books. On the other hand, it is also applicable as discrimination law in which provide the better
facilities of individual people where they can secure or protect their content. Some kind of legal
factors such as intellectual property right, content, patent etc. these are consider the important
aspect to maintain consumer protection, e-commerce and data protection.
CONCLUSION
From above discussion, it has concluded that business environment plays important role in
the organization to identify both importance of external and internal factors. in particular, an
enterprise can focus on the external business environment so that they can implement suitable
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strategies to achieve desirable goal or objective. On the other hand, there are different business
decision depends upon the external factors in order to manage and control the outside of business
and do some little change themselves. In this report, it has been identified the importance of
business environment and consider the analysis through Pestle framework or tool. This report is
mainly focused on the structure of Pearson Plc., its management and structured. It has been
examined the brief overview of company and its history. This documentation has been discussed
the importance of pestle analysis for business and identify why it is important to handle complex
business tasks. Furthermore, use the pestle framework to analyse external environment of
Pearson Plc.
12

REFERENCES
Book and Journals
Borojo, D.G. and Yushi, J., 2020. The impacts of institutional quality and business environment
on Chinese foreign direct investment flow to African countries. Economic Research-
Ekonomska Istraživanja. 33(1). pp.26-45.
Chan, D., Berger, R. and Man, T.W.Y., 2020. The impact of managerial characteristics on
business strategies under the environmental change: an investigation of the Israeli
diamond industry. Journal of Small Business & Entrepreneurship. 32(2). pp.123-148.
Cherunilam, F., 2020. International business. PHI Learning Pvt. Ltd..
Contractor, F.J., Dangol, R. and Raghunath, S., 2020. How do country regulations and business
environment impact foreign direct investment (FDI) inflows?. International Business
Review, 29(2), p.101640.
Halbert, T. and Ingulli, E., 2020. Law and ethics in the business environment. Cengage Learning.
Vrbka, J., 2020. Business environment quality model in the SME segment. Transformations in
Business & Economics. 19(1). p.49.
Williamson, B., 2020. Making markets through digital platforms: Pearson, edu-business, and the
(e) valuation of higher education. Critical Studies in Education. pp.1-17.
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