PESTEL Analysis of Royal Mail

This report is based on PESTEL analysis of Royal Mail where organization identify the operating environment and key driver factors which management have to notice and formulate business strategies accordingly.

Global Business
Environment

EXECUTIVE SUMMARY
This report is based on PESTEL analysis of Royal Mail where organization identify the
operating environment and key driver factors which management have to notice and formulate
business strategies accordingly.

Table of Contents
EXECUTIVE SUMMARY ............................................................................................................2
MAIN BODY..................................................................................................................................2
1. PESTEL Analysis....................................................................................................................2
CONCLUSION...............................................................................................................................3
REFERENCES................................................................................................................................4
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MAIN BODY
1. PESTEL Analysis
Political Factor: Brexit affect the Chines import into the UK because due to uncertainty
over Brexit, there are unclear whether where Britain will be able to exit the European Union. EU
currently the largest trading partner of UK where 54% of UK imports and 46% export from EU
states in 2018. Volume of sending letters will fall and reduce the operating margin, as result
postal service reliant on parcel dispatch from online shopping in order to offset their losses from
their traditional business. Due to Brexit, Royal Mail have to face losses but further online
shopping become potential opportunity for the company which helps offset their losses from the
business.
Economic Factor: currently UK has high employment rate which is beneficial for the
country. In context of Royal mail, due to high employment rate company able to deliver enough
parcels in the country (PESTEL Analysis of Royal Mail, 2019). Along with this, falling in
exchange rate affect the cost of exporting parcels which increases the overall cost of delivering
which further reduce the profit margin of the company.
Social Factor: Change in the behaviour of customer's will close down their many postal
services. Due to digitalization of the country, people prefer to shop online and directly deliver to
the person they want. It will reduce the postal service but Royal mail change their business
according to the market need and deliver online ordered products which help them to offset their
loss from their traditional business.
Technological Factor: Change in the technology is very important for the growth of a
company. From the last 5 years, transportation industry majorly grow and reduce the cost of
transporting parcels to the customers. Uber and Lyft both are in taxi industry which dominate the
entire market. If Rail mail encourage to adopt new technology then it will provide them
popularity and quickly grow in the postal service through delivering inline products.
Environmental Factor: There are various environmental policies which organization
have to follow otherwise it create pressure on organization. Weather condition affect the
transportation of resources as well as finished goods (Kasemsap, 2014). Climate change also
make the products useless which affect the Royal Mail company. So basically, weather &
climate affect the company which required to focus by the management of Royal mail in order to
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maximise productivity or probability. Due to deal in transpiration sector they have to manage
pollution otherwise they have to pay fines which financially impact the company.
Legal Factor: Royal Mail lose their competitive edge which generate the high chance of
failure. Along with this, Royal mail have to provide equal opportunity and treat every one same
regarding gender, age, disability etc (Savrul, Incekara and Sener, 2014). Royal mail also have to
focus on health & safety of their employees through providing life insurance because their work
related to the transportation which is risky.
CONCLUSION
From the above discussion it has been concluded that, with the help of PESTEL analysis
organization able to find key factors which significantly impact the business. Such as political,
economic, legal etc. affect the business operations and provide various opportunity as well as
threat for the company. So management have to analyse these factors and decisions accordingly.
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REFERENCES
Books & Journals
Kasemsap, K., 2014. The role of social networking in global business environments. In Impact
of emerging digital technologies on leadership in global business (pp. 183-201). IGI
Global.
Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a
globalizing business environment. Procedia-Social and Behavioral Sciences. 150.
pp.35-45.
Online
PESTEL Analysis of Royal Mail. 2019. [Online]. Available Through:
<http://fernfortuniversity.com/term-papers/pestel/nyse4/7989-royal-mail-plc.php>
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