Impact of Innovation and PESTEL Analysis on Pets at Home Group Plc

This report analyzes the impact of innovation on modern business and evaluates opportunities and threats with the help of PESTEL analysis for Pets at Home Group Plc. It also provides recommendations to improve decision making and outlines ethical implications of decision making for the organization.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION....................................................................................................................3
TASK.........................................................................................................................................3
Impact of innovation on modern business.............................................................................3
Environment of organization (PESTEL analysis)..................................................................5
Recommendations to improve decision making....................................................................6
Ethical implication of decision making for organization.......................................................7
CONCLUSION.........................................................................................................................8
REFERENCES.........................................................................................................................9

INTRODUCTION
Business environment is the composition of internal and external factors which can
create an impact on the organization. These factors are responsible to create an impact on the
functions of company which can create direct or indirect impact (What is business
environment, 2021). Therefore, business environment is also helpful in determining
opportunities, ensuring optimum utilization of resources, supports in effective planning and
enhances overall performance and growth of business. By analyzing the business
environment an organization can identify the threats and risk which can create an impact on
the profitability and sustainability of organization.
Pets at home is a British pet suppliers retail company which was established by
Anthony Preston in the year 1991. The company offers all pet products, such as- food, toys,
bedding, medication, accessories and pets (About Us). The company is UK’s leading pet care
business which offers plenty of services to pet owners.
This report will discuss the impact of innovation on business and will evaluate
opportunities and threats with the help of PESTEL analysis. The project will state
recommendations through which the organization can improve decision making process.
Lastly, the report will outline ethical implications of decision making for business.
TASK
Impact of innovation on modern business
Innovation is the process to conceptualize new products, processes and ideas how to
approach existing products, processes and ideas in new ways or approaches. In business
environment, there are different types of innovation which can be given by organisation in
order to enhance their competitiveness and their performance within the industry
(Importance of innovation in business, 2019). Innovation plays a vital role in business as in
order to operate in this competitive scenario, an organisation must incorporate innovative
approaches through which the company can maintain their position in the industry and
sustain for a longer period of time span. Innovation is essential as it supports in business
growth, keep alternation relevant and differentiate themselves from competitors.
The impact of innovation in case of Pets at home is discussed below:

 Supports in taking advantage of technology- Technological advancement is rapidly
taking place which defines the age of innovation in organisation for maintaining their
efficiency while performing the business functions. Technology is evolving rapidly
which states that new and more efficient technologies must be incorporated by
organisation to offer better products and services which can be helpful to track
performance and work continuously for the betterment of all the processes followed
by the company (Innovation is essential for business success, 2021). In context of
Pets at home, the company must take advantage of new technologies for processing
innovation through which we can optimize the business and gain competitive
advantages which will help them stay ahead of competition in the highly competitive
business scenario. By incorporating technology in their daily activities, this can help
them in performing their business functions effectively and such practices will
support them in maximizing their profitability.
 Boost market position- Innovation can help in anticipating market changes more
quickly and target opportunities by focusing on facts through which a business can
differentiate themselves from their competitors. Innovation is helpful in boosting the
market position through which an organisation can maintain their competitive position
within the industry by continuously analyzing market trends and the customer
supplies. In advising and evaluating the strategies of competitors or to attract
opportunities for business growth. In case of pets at home, by implementing various
innovative strategies it will help company in offering quality products and services to
the customers through which they can strengthen their customer base and establish a
strong position in the industry and market which will be helpful for the profitability
and sustainability in the industry.
 Economic growth- Innovation is responsible for boosting economic growth by
increasing the number of inputs which are passed through productive processes.
Innovative approaches have been implemented on the same number of inputs in order
to bring something creative and unique. Technological innovation is one of the major
sources of economic growth as the incline in development of technology forces
organisation to use modern and advanced technology in the business in order to
maintain their place in the highly dynamic business environment (The importance of
innovation, 2019). In context of pets at home, the companies must the understand
value of innovation in their products and services offered by the company as this can

support the economic growth through increasing the inflation adjusted market value
of their goods and services that are offered by them to the economy.
 Improves sales and customer relationships- By driving innovation in an
organisation it will improve customer relationship which will create a positive impact
on the sales and revenue of an organisation. In case of pets at home the company can
face positive impact of innovation on their sales customer relationship and customer
engagement and loyalty with their brand due to innovation in the products and
services which will be helpful in meeting their demands regularly and strengthening
their customer base through which they can maintain their profitability.
Environment of organization (PESTEL analysis)
Pestel analysis is a tool which is used to monitor and evaluate micro environment
factors which can create an impact on the organisation and its functioning (What is PESTEL
analysis, 2021). With the help of this framework, an organisation can identify external
business environment factors which are- political, economic, social, technological,
environmental and legal.
In context of Pets at home, detailed three factors of macro environment are analyzed
and addressed underneath:
Economic factors- Economic concerns such as foreign exchange/interest rates, labor
market conditions, inflation, and saving rates, among others, are crucial for Pets at home to
understand because they have an impact on the country's overall economic climate. The
economic prosperity of a country has a direct impact on organizational performance.
Growing economies can help Pets at home in a variety of ways. Furthermore, the amount of
money spent by the host nation government on necessary infrastructure development has an
impact on Pets at home commercial performance. Operating in such a market could lower
Pets at home production expenses. The high interest rate will encourage consumers to invest,
boosting the growth potential of Pets at home. Finally, currency rate swings may have an
impact on profitability and international trade (Pets at home Group Plc PESTEL analysis,
2018). The large volatility in local currency may be a source of concern for Pets at home.
Pets at home should also look at the availability of qualified human resources, as a shortage
of skilled labor can affect business efficiency and make talent attraction and retention more
challenging.

Social factors- Changes in demographic patterns, such as population ageing,
migration trends, and socioeconomic characteristics, are crucial for multinational commercial
enterprises like Pets at home. By researching demographic data, Pets at home can select the
appropriate market segment/segments with great growth potential. Pets at home must review
historically imposed gender roles in order to harmonize its marketing and communication
approaches. Traditional patriarchal civilizations with clearly defined gender roles would
employ marketing and human resource strategies that are distinct from countries with few
gender norms. In order to adjust marketing strategies to the specific cultural setting, Pets at
home should form local teams and partnerships to better understand social views and
customs. The socioeconomic class stratification of Pets at home is also taken into
consideration (Bah and Fang, 2015). To sell luxury products at premium prices to a market
where the high-end consumer is relatively small, Pets at home will need to employ niche
marketing techniques. Because younger customers are more inclined to shop online than
older ones, Pets at home must consider demographic differences when analyzing online
shopping behavior.
Technological factors- The growth of information and communication technologies
has resulted in the use of innovative marketing approaches to encourage customer
engagement. The advantages of social media marketing can help Pets at home enhance its
profitability. Technological advancements can be used to benefit innovative social media
marketing aimed at growing online brand communities. To stay ahead of the competition,
Pets at home should attentively examine ongoing technological advancements. Pets at home
must study competition investments on a micro and macro level to determine how new
technologies effect the firm's value chain and present cost structure. Research and
development efforts are vital in a world where innovation is being disrupted (Cepel and et.al,
2019). The adoption of modern technologies has sped up the process of developing a new
product. These days, new items are generated more quickly, and supply chain partners have
more power. Pets at home is under pressure to develop new things quickly, expand their
product line, integrate flexibility into the value chain, and cultivate positive business
relationships with value chain partners.

Recommendations to improve decision making
Decision making is important business skill which can drive organizational
performance. Decision making is essential as effective decision can help organisation in
enhancing their financial results and maximizing their profitability with strengthening their
competitive position and brand image in the industry. Some of the strategies to improve
decision making for the selected organization, Pets at home are listed below:
 Clarify the goals and purpose of objectives- The organisation must identify and
clearly communicate who is responsible for making decisions which will be helpful in
fostering accountability and engagement in the organisation. In order to make an
effective decision it is essential that an organisation must clearly define their goals
and purpose through which the people of organisation can collectively work for the
achievement of the planned objectives (Key decision-making techniques, 2020). In
context of Pets at home, the organisation must clearly communicate and share those
desired objectives which needs to be accomplished through which they can bring
clarity and transparency in the organisation where each employee can engage in
business activities and make progress towards achievement of desired objectives.
 Involve the team in process- In order to improve the decision making of an
organisation the company must encourage their employees in team to involve in the
decision-making process. By enhancing employee engagement in decision making
process, it will help in forming innovative and creative decisions which can be helpful
for the success and growth of organisation (Ways to improve organizational decision
making, 2020). In case of Pets at home, the company must encourage their employees
to willingly participate in their decision-making process through which they can bring
diversified range of ideas which can support the organisation informing effective
decisions that can be helpful in maintaining well and competitive position of the
brand within the industry.
Ethical implication of decision making for organization
Ethics are subjective philosophy which deals with right and wrong or good and evil.
Ethical implication of an activity referred to the condition where results are viewed with
those ethical consideration.

Business ethics deals with believes and principles which acts as fundamental base of
decision making in an organisation. Business ethics concerns the duties and obligation a
company have towards their stakeholders, employees, customers, supplies and community. In
context of Pets at home, the company focuses on few elements through which they can
maintain ethical behavior in the organisation, these elements are shared with their employees.
The four elements which promotes ethical business climate in pets at home are-
 Written code of ethics and standards
 Availability for advice on ethical situation
 Ethics training for executives, managers and employees
 Systems for confidential reporting
In order to form an ethical decision, the company follows decision trees which is an
helpful analytical tool that considers ethical dimensions of decision (Cherunilam, 2021).
These decision trees help Pets at home to determine alternative and estimate their outcomes.
CONCLUSION
From the above report, it can be concluded that business environment comprises of
internal and external factors which can bring diversity and these factors are highly uncertain
in nature. It can be understood that innovation plays a crucial role in enhancing
competitiveness and productivity of an organisation. With the help of innovation, an
organisation can implement various strategies and approaches that can support them in
strengthening their competitive position within the industry through which they can reach
milestones and maximize their profitability and sustainability in the industry. Innovation is
responsible to create positive as well as negative impact on the organisation.

REFERENCES
Books and journals
Bah, E. H. and Fang, L., 2015. Impact of the business environment on output and
productivity in Africa. Journal of Development Economics. 114. pp.159-171.
Cepel, M and et.al., 2019. Selected economic factors of the quality of business
environment. Journal of International Studies.
Cherunilam, F., 2021. Business environment. Himalaya Publishing House Pvt. Ltd.
Online
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