Importance of PESTLE Analysis in Business Environment

This report discusses the importance of PESTLE analysis in analyzing the external environment of a company and formulating strategies. It explores the current organizational structure of Hilton Food Group Plc and its history. The report also highlights the significance of political, economic, social, technological, legal, and environmental factors in business operations.

Business Environment

Table of Contents
INTRODUCTION-..........................................................................................................................4
Main Body.......................................................................................................................................4
TASK 1............................................................................................................................................4
Describe how chosen organization is structured and governed.................................................4
TASK 2............................................................................................................................................6
Discuss the importance of PESTLE analysis..............................................................................6
TASK3.............................................................................................................................................7
PESTLE framework to analyse the external environment of selected company........................7
CONCLUSION- ...........................................................................................................................10
REFRENCES.................................................................................................................................11

Executive Summary
Business environment comprises various macro as well as micro factors that significantly
affect the sales as well as profit margin of an organization. The report discussed about the current
organizational structure of company. It is essential for entity to carry out external analysis with
appropriate tool. It helps mangers to formulate new stargates to meet with uncertain situations
that may occur in future within entity.

INTRODUCTION-
Business environment refers to various internal as well as external factors such as
employees, demand and supply at market place, government policies and many more that
affected business efficiency and profitability (Berman and Dalzell-Payne, 2018.). It is a
combination of micro as well as macro environment that significantly influence overall
organizational performance. The report is about Hilton Food Group Plc that is a food packaging
company based on UK. It has established in the year of 1994 and provide services in different
region. The report comprises a detailed analysis of company along with its history and
organizational structure. Further importance of PESTLE analysis is also discussed in the report.
Moreover, it renders a detailed insights about business environment of company.
Main Body
TASK 1
Describe how chosen organization is structured and governed
A) Overview of company along with its history
Hilton food group plc is the internation food packaging service providers. It provide beef
and meat packaging facility across different regions. It has headquarters in UK. It is catering to
the audience of across Europe.. The company has started functions in 1994 in England. It has
grow and expand business operations in other countries overtime. Now, it has six factories within
Europe from where it is catering to target segment (Crowley and Jordan, 2017). The
organizations owns several factories and sells products to supermarkets within country. Along
with this, it also has a joint venture in Australia with a retail store. It concentrates to provide cost
effective services to customers in order to retain them for a longer period of time. Along with
this, managers emphasis to acquire new customers to increase their market share. Hilton is able
to maintain good relationship with customers by providing them efficient services. It has
effective relationship with suppliers that helps the entity to procure necessary resources from
vendors. The company is listed in London Stock Exchange and come with its first public issue in
the year of 2007. Apart from this, it also owns subsidiary companies such as Hilton Foods UK
limited, Hilton food group(Europe) and many more. Innovation is the crucial strategy of
organization thus they constantly engage to develop unique and advance approaches to inflate
business efficiency. Initially Hilton was started to serve Tesco but in the decade of 2000 it

established new factories in different regions to expand business operations and profitability. In
2007 the company got listed at London Stock exchange and now borrow money from general
public by issuing shares. Thus, it has expanded business overtime by increasing capacity. In
addition, the company also established numerous manufacturing process within country with a
intention to serve large segment. Further in 2013 it collaborated with an Woolworth that is a
retailer based on Australia. This joint venture proved a success for entity and played a vital role
in overall growth of organization. Apart from this, Hilton food group plc also got associate with
other firms to explore business operations within country. Thus, the entity grow and develop
overtime by expanding its capacity, take over other firms and undertaking joint ventures.
B) Organisational Structure of Company
There are predefined organizational structure that is followed by every company. It
comprises hierarchical arrangements of various positions within organization. It helps to
determine the reporting relationship between different personnels working in company. It has a
wide organizational structure that determines the responsibilities, roles of different personnels
working in company. They follows functional structure under which all the operations are
divided in different departments such as Finance, Research, Marketing and so on. There are
departmental head to manage the functions of their division. Board of Directors of company have
right to choose the CEO of company and take part in division making process (Beatty,
Samuelson and Abril, 2018). They have ownership in the company so that have right to take
appropriate part in the profit. Thus, they keep an eye on financial performance of entity to ensure
future growth and success. There are various board members in Hilton named as Robert Watson
OBE, Nigel Majewski and many more fields. Some of them are executive who take part in daily
management of organization while some are non executive who do not responsible to undertake
management and operation functions of organization. Further, they take part in overall decision
making process of company as they have great interest in business profit. Hilton is a an entity
that offers shares to general public thus it has wide number of board members. They are elected
through shareholders to represent them and take part in overall decision making process of
organization. Philip Heffer is the present CEO of company who are appointed in the year of
2018. The chairperson of Hilton was elected by its Boars Members. Heffer is a esteemed
personality having years of experience in the packaging industry. Previously he worked as as
sales or production coordinator with one of a packaging firm that renders him great exposure and

help to deal with different situation in an efficient manner. With this, he is responsible for overall
growth and development of company. He has been served to a number of companies majorly
related to packaging sector that includes a vast experiencer in his profile. It is the duty of CEO to
take appropriate decisions and to keep an efficient control over the resources of company. He is
the most highest level ranking person of organization thus responsible to manage operations in
an efficient manner to increase to explore business at wide level. As Hilton is renowned brand
that owns huge ample of subsidiaries that make it essential for the CEO to formulate suitable
policies in order to maintain and exceed existing brand value of company among customers.
TASK 2
Discuss the importance of PESTLE analysis
Pestle Analysis is a framework that is used to analyse the impact of external environment
over business performance and efficiency. It is an important tool that helps to formulate
strategies in order to achieve predefined goals. The tool comprises numerous factors such as
Political, Economical, Social, Technological, Legal and Environmental. Although, these
elements significantly affect business efficiency but cannot be controlled by managers. Thus, it is
significant to constantly monitor these elements to minimize uncertainties. In addition, it also
assists management team to prepare appropriate strategies to grab the opportunities of growth
and success. Different factors have their own significance for organization. For instance,
Political elements are essential to understand the impact of government policies and instability
oner business functions. With this. managers will be able to prepare necessary plans to minimize
to meet with the uncertainties. Whereas Economical elements help to undertake necessary
modifications in existing policies to face the present economic conditions of country. For
instance, current pandemic condition has bring deep recession in the economies of various
nations that will affect overall sales and profit margins of company (Kasemsap, 2018). With the
help of pre analyse companies can minimize the impact thus manage business operations in an
efficient manner. Customers are crucial part of an organization so it is essential to understand
their behaviour, needs, preferences for the success of company. Analysis of social elements assist
managers to meet with the needs and requirement of buyers. It aids them to render products as
well as services as per current market trend. Hence, they will get a sustainable competitive

advantage. Further, Technological analysis is crucial to adopt new and unique approaches to
enhance organizational efficiency and performance. It helps to evolve innovative methods to
minimize deficiencies and ease out working process (Beynon-Davies, 2020). Nowadays, it is
crucial to develop unique methods such as automation, digital technologies to sustain at
competitive market place. With legal analysis organizations can avoid future disputes at work
place. It assists managers to obey appropriate policies, laws such as foreign trade policy,
business and employment law and so on. In addition, with analysis of environmental factors
managers will be able to prepare appropriate strategies to ensure societal well being through
business operations. Therefore, PESTLE analysis is essential to carry put while starting a new
entity as it helps to know the impact of various factors over business performance. It is an
essential tool that helps ,managers not only to analyse the impact of external factors but also
prepare appropriate registries. With this they will be able to minimize the impact of future
uncertainties and grab the opportunities to explore business operations. It is also a crucial tool for
existing companies and assists them take proactive actions in order to meet with uncertainties. In
addition it helps managers to prepare necessary strategies to minimize business threats. It is a
cost effective tool with this organization can easily monitor the external environment and its
impact over business entity. Moreover, it provides detailed information about market condition,
trend that also aids an organizations to meet with the demand of customers in an efficient
manner. Hence, PESTLE analysis is strategic framework that is significant to formulate effective
market plans, strategies to achieve predefined objectives.
TASK3
PESTLE framework to analyse the external environment of selected company
It refers to a strategic tool that is carried out to examine the impact of external analysis
over business functions. PESTLE analysis is essential to prepare appropriate strategies to sustain
at competitive market place for a longer period of time (Charter, 2017). Hilton food group plc is
operating in food and beverages industry that is highly affected with external environment. The
company undertakes this tool in order monitor the changes in macro environment that
significantly affect performance of company. It helps them to prepare necessary strategies to
meet to get competitive advantage. These macro factors not only influence the respective entity

but also the other firms who are working within same industry. The pestle analysis of Hilton
food group plc is discussed below:
Political Factors- It refers to numerous elements such as political environment of a
country , change in government and current policies, and so on. Hilton food group plc is
operating in numerous country thus it is exposed with the political environment of different
nations. In addition it is affected with the tariff, trade regulations of various nations (Stacey,
2016). Managers of company need to examine the various political aspects before exploring
business in a new country. Level of corruption, legal framework, tax regimes prevailing in
different nations put a great influence on overall business operations. As company is working in
various nations across the globe thus it is crucial for managers to analyse the changes in current
government policies of countries. It will help them to prepare plans to meet with future
uncertainties. Thus, it is important for organizations to analyse these factors and prepare
strategies accordingly.
Economical Factors- It refers to analyse the growth rate, inflation, present economic
condition, income, cost, and many other factors. It is vital to monitor these elements on a
continuous basis in order to prepare suitable strategies. Hilton food group PLC can undertake
economic analysis of country to assess the impact of these factors over business performance.
Managers of organization may analyse macro factors like growth rate, consumer spending index
in respect to food and beverage industry and so on ( Abdelkafi and Täuscher, 2016). In addition,
they also need to monitor the exchange rate , economic system, financial market of different
currencies to ensure smooth functioning of business across the globe. Further, it is also affected
with the current pandemic situation as it has reduce down the demand of products being offered
by company at global level. Thus, it will help to take proactive actions to achieve organizational
objectives.
Social Factors- This factors are crucial for each and every organization and significantly
affect the business efficiency of an organization. It comprises a lot of elements such as believes,
attitude, personality, buying behaviour of people of a country. Hilton food group plc is highly
affected with these factors. Managers of organization analyse believes, attitude, behaviour of
customers within nation. It assists them to design appropriate message for customers of food
and beverage sector. In addition, they also need to analyse the geographical and skill set of

citizens, culture of various countries in which company is operating. Thus, it is essential to
formulate suitable strategies to grab the attention of global audience.
Technological Factor-As per the current trend, it is essential to analyse technological
environment in order to adopt new advancements. It includes evolution of unique as well as
advance techniques to enhance business efficiency (Bentley-Goode, Omer and Twedt, 2019).
As per the current trend there are a lot of digital techniques have been adopted by food and
beverage industry to meet with the demand of customers in an efficient manner. Hilton food
group plc has been adopt new approaches, soft wares to ease the overall working process. In
addition, it is using digital platforms to enhance business presence at wide level. Along with this,
it need to analyse the current techniques that have been adopted by its competitors. It will assist
managers to carry out innovative methods to sustain at competitive market place.
Legal Factors-It refers to compliances, legislations that are formulate by higher
authorities to ensure smooth functioning of business. There are various laws such as business,
employment, consumer protection law that significantly affect an organization. Hilton group plc
is working in different countries thus it has to follow the rules, regulations made by government
of respective country. There are a lot of changes can be undertake in current policies so
managers need to analyse the current legal environment to and adopt policies accordingly. It will
help them to minimize legal disputes that may arise at work place.
Environmental Factors- It is essential for a business owner to monitor the impact of their
activities on overall society. There are various rules and regulations in different nations to
protect environment that may need to follow by an organization. Hilton food group plc is
significantly affected with these factor and ensure to meet with the guidelines of different
countries. For this, it undertake recycle, reuse and waste management practices to secure
environment. In addition, it also give a significant part of its profit as CSR activity for societal
well being and upliftment.
Out of above discussion, it is analysed that macro environment factors are crucial and put
a great impact on overall business performance. Thus, it is essential for company to continuously
monitor the external factors and prepare appropriate strategies in order to meet with future
uncertainties and contingencies.

CONCLUSION-
With above report, it can be concluded that there are numerous internal as well as
external factors that put a great influence on overall business functions. Organisational structure
determines the reporting relationship of different person working in company. PESTLE analysis
is essential to monitor the impact of macro elements over business efficiency. Further, discussion
has been carried out regarding the impact of Macro or external factors over organizational
performance.

REFRENCES
Books and Journals
Abdelkafi, N. and Täuscher, K., 2016. Business models for sustainability from a system
dynamics perspective. Organization & Environment, 29(1), pp.74-96.
Beatty, J.F., Samuelson, S.S. and Abril, P., 2018. Business law and the legal environment.
Cengage Learning.
Bentley-Goode, K.A., Omer, T.C. and Twedt, B.J., 2019. Does business strategy impact a firm’s
information environment?. Journal of Accounting, Auditing & Finance, 34(4), pp.563-
587.
Berman, S. and Dalzell-Payne, P., 2018. The interaction of strategy and technology in an era of
business re-invention. Strategy & Leadership.
Beynon-Davies, P., 2020. Business information systems. Red Globe Press.
Charter, M. ed., 2017. Greener marketing: A responsible approach to business. Routledge.
Crowley, F. and Jordan, D., 2017. Does more competition increase business-level innovation?
Evidence from domestically focused firms in emerging economies. Economics of
Innovation and New Technology, 26(5), pp.477-488.
Kasemsap, K., 2018. Mastering business process management and business intelligence in global
business. In Global Business Expansion: Concepts, Methodologies, Tools, and
Applications (pp. 76-96). IGI Global.
Stacey, R.D., 2016. The chaos frontier: creative strategic control for business. Butterworth-
Heinemann.