Pestle Analysis for Organizational Success

This assignment delves into the importance of conducting a PESTLE analysis for organizational success. It outlines the procedures involved in identifying key internal and external factors that can influence resource utilization, productivity, and profitability. The process emphasizes analyzing strengths and weaknesses through a SWOT framework to capitalize on opportunities and mitigate threats. The text also touches upon relevant business concepts like corporate social responsibility and circular business models.

INTRODUCTION
TO
BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
P1 PESTLE framework...............................................................................................................1
P2 Porter's five forces analysis....................................................................................................2
P3 Internal Analysis....................................................................................................................4
P4 Application of SWOT framework.........................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Introduction to business can be defined as to establish a firm with new ideas in market.
This aspect may happen when a person wants to start his/her company to conduct various
operational activities or procedures to attain their planned results (Hale and Lunel, 2013). This
report is based on DHL Company which is a division of German logistics firm providing
international courier, parcel and express mail services. It can be considered as the world's largest
logistics firm operating around global level, specifically in sea and air mail. This assignment
includes PESTLE framework, porter's five forces model, internal environment analysis and
application of SWOT as well.
TASK
P1. PESTLE framework
Business considers micro and macro environment factors which have their impact on
various activities or policies related to organisational strategic planning. These may involve
various elements such as trade barriers, demographic changes, new laws and tax modifications.
In general way, the macro factors influence DHL firm's aspects for a long term but they are out
of its direct control. PESTLE analysis concerns with macro factors of any company which are
as follows:
Political factors: - This term refers to the various government aspects which need to be
followed by any company to run its business. There are several kinds of elements such as
policies, changes and terms applied by the government, funding grants or initiatives are also
included. These factors are related with pressures or opportunities brought by political
institutions like internal issues, inter-country relation, corruption and many more. DHL Company
has to follow all rules or norms of government to run its business smoothly and successfully.
Economic factors: - There are different kinds of economic aspects which include interest
rates, disposal income of customers or business, economic growth and so on. Such components
are able to provide information about how much profitable they are. (Rausch, Sheta and Ayesh,
2013) This factor can deal with the management of demand in given economy for DHL
Company.
Social factors: - There are several social aspects like values, thoughts and believes of
population. This may consider the growth, age distribution, career attitudes and health
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consciousness. It affects basically the activities of promotion done by marketers of company.
They have to make sure that their events should not harm the emotions of people or other firm's
aspects. These procedures may not impacts on social criterion of ethics or cultural values of any
group or tribe.
Technological factors: - There are various kinds of technologies which can be
implemented in an organisation to enhance its regular productivity. Several techniques or
software are there which can improve the profitability of company and enhance goodwill of firm
as well. It is necessary to adopt for DHL firm because this may facilitate new ways of
manufacturing goods or services, unique methods of distribution and innovative techniques of
communicating with target clients to make effective business.
Legal factors: - These elements may involve various kinds of aspects regarding legal
rules or norms such as equal opportunities, advertising standards, consumer rights or laws,
product labelling with its safety and health issues. An organisation has to take care of legal
prospects and follow the. To run its business.
Environmental factors: - It may be relevant to ecological and environmental prospects
which impacts on demand of organisation's products and operational activities. They are become
necessary due to improving scarcity of pollution targets, raw materials, doing business as an
ethical and sustainable firm as well as follow the carbon footprint targets set by government.
P2 Porter's five forces analysis
Porter's five forces frame work can be defined as tool of analysing competitive scenario
for business. These factors are refers to micro-environment to contrast it with another general
term known as macro-environment (Wilson, 2014). It may includes such elements which may
close to firm which impacts its capability to serve clients and make profits of company. This may
involve three forces from horizontal competition and rest of two will be of vertical one. Several
components of porter's model are given below:
Threats of new entrants:- There are various kind of firms which deals in different types
of businesses to make profits. Several profitable industries which yields high returns may attract
new entrants. This will make more difficult by incumbents, abnormal profitability may fall
towards zero which is minimum level of profitability. It can consider certain factors which are as
follows:
 Government policy, product differentiation and economies of scale.
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 Capital requirements, absolute cost and its disadvantages independent of size.
 Brand equity, expected retaliation and access distribution channels.
Threats of substitutes:- There are various substitute products in market which are useful
to solve same economic need with different technology (Vlot and Gunnink, 2011). For example.,
substitutes are meat, poultry and fish; landlines and cellular phones; airlines, trains and ships:
beer and wine etc. potential factors of DHL are;
 Buyer propensity to substitute.
 Relative price performance of substitute.
 Perceived level of product differentiation.
Bargaining power of customers:- This factor become possible when clients have
various alternative choices of purchasing specific product to fulfil same economic need. It I
based on the fact that, higher is number of choices then greater will be the bargaining power of
customers. It may includes several elements which are as follows:
 Degree of dependency upon existing channels of distribution.
 Buyer information availability.
 Availability of existing substitute products.
Bargaining power of suppliers:- This term may also known as market of inputs. There
are various types of sources of power such as suppliers of labour, components, raw material,
services to organisation. Its potential factors are as follows:
 Impact of inputs on cost and differentiation.
 Presence of substitute inputs.
 Ratio of supplier to firm concentration.
Industrial rivalry:- Most of companies have intensity of competitive rivalry is major
determinants of competitive efficiency of an organisation (Muhtaroglu and et. al., 2013). Position
of an enterprise on market scenario. Potential factors relevant to DHL are given below:
 Powerful competitive strategy.
 Sustainable competitive advantage through innovation.
 Competition between online and offline firms.
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P3 Internal Analysis
There are different kind of internal factors which are necessary to observe and analyse to
make appropriate strategies or policies. This may facilitate to build several decisions to run
business proper to attain desired goals or objectives of an organisation. The DHL company have
to create value by innovatively bundling and leveraging their resources and capabilities. This
aspect can be calculated by exploiting their core competencies or advantages (Sako, 2012).
Resources Capabilities Core competencies
 Assets which can be
seen touched and
quantified are known
as tangible resources.
For example; financial,
physical and
technological
resources.
 This term may refers to
the abilities of firm or
capacity to integrate
individual enterprise
sources to attain
desirable targets.
 This term can be
defined as resources
and capabilities which
may serve as source of
competitive advantage
over rivals. It
distinguish a firm
competitively and build
it distinctive.
 Assets which rooted
deeply in firm's history
and cannot be seen or
touches are known as
intangible resources.
 The collection of
various capabilities lies
in skill and knowledge
of employees and their
functional expertise
which measure value of
human factor (Murphy
and Schlegelmilch,
2013).
 This factor can emerge
over time through an
organisation process of
accumulating and
learning to convey
method for deploying
several performs
resources and
capabilities.
 Intangible includes
knowledge,
capabilities, trust,
brand name, innovation
 Any organisation have
several values which
derives not from things
but from knowledge
 There are certain
activities that a firm
can performs specially
well compared to
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etc. besides of this, all
enterprise have to
know and understand
difference between
strategic values of both
tangible or intangible
sources in respect to
fulfil form's aspects.
and know how
intellectual assets and
competencies- all of it
embedded in people.
Capabilities make any
firm able to survive in
market and make its
strong position in
competition.
competitors and
through which
organisations adds
unique value in market
scenario.
Challenges of internal analysis
 Several decision relevant to strategies are non-routine, ethical implications and affiliates
the firm's above average returns. This may includes identifying, developing, deploying,
protecting firm's resources and core competencies (Laisheng and Zhengxia, 2011).
 Managers of company face uncertainty due to proprietary technologies, changes in
economic or political trends and increasing complexity of environment.
 There are various issues of intra organisational in respect to core competencies to nurture
them effectively as well as efficiently.
Conditions impacts on managerial decisions:
 The first situation is of uncertainty which includes characteristics of organisation's
general and industrial environment as well as client needs.
 Complexity is another condition which involved in internal factors results from inter
relationships among conditions shaping an enterprise.
 There are certain conflict which need to be sort out among managers to make decisions as
well as between those who affected by decisions.
P4 Application of SWOT framework
SWOT analysis can be defined as that process by which identification of strengths and
weakness of any organisation can be done. This is beneficial procedure through which the firm
become able to avoid possible threats by reducing their impacts. Another thing is that
opportunities may grab through several effective strategies or policies to make more efficient
decisions. It is necessary to collect information about strengths, weakness, opportunities and
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threats related to business. This will facilitate to conduct various important activities or
procedures more properly in correct manner.
Strengths:- There are several strong points of an organisation which can be utilises by it
to make better strategies or policies to make profits or benefits. This is important to identify and
utilise them into business aspect to complete the targets more effectively as well as efficiently.
 Advantages bear by company.
 Extra efficiency which other firms does not have.
 Strengths of marketing better than other firms.
 Enterprise have unique selling proposition.
Weakness:- Similarly, it is also possible that some of weaknesses also contains by
company. These negative aspects are necessarily get sort out by making problem solving
techniques top reduces loss and save cost implemented in organisation.
 Identify those factors which need improvement.
 Such strategies or aspects which need to be ignore to reduce loss.
 Weakness of marketing employees.
 Factors which does not tends to increase sales of company.
Opportunities:- Several opportunities are which which can be grabbed to implement
unique and effective secretaries to make profits. But many times it is observed that, firms are
unable to identify beneficial chances and may not receives their benefits (Linder and Williander,
2017).
 Kind of opportunities which may grabbed by firm to attain profits.
 Chances in respect changing trends for attaining desired profits.
 Technological changes and policies of government modified their legal rules or norms.
 Modifications in social patterns, population profiles, lifestyles changes and so on.
 Sometimes, many local events render some chances to grab them and generate better
outcomes.
 It is an useful approach which provides opportunities make run any business more
successfully.
Threats:- There are several issues and problems regarding current strategies or policies
which are in progress within an organisation. They need to be identified for making better norms
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or rules to conduct various activities or procedures to attain better productivity as well as
profitability of the firm.
 Kind of problems facing by employees while working.
 Negative impacts on outcomes from current strategies.
 Issues due to competitor's decisions and products.
 Qualities or features of goods or services have to be completed.
 Changing trends are introducing several threats.
 Identify any weakness which may impacts critically and threaten the business.
CONCLUSION
The above report has mentioned that various organisation have to implement several
procedures to conduct pestle analysis. This will identify the all important factors of an
organisation which may help to provide better utilisation of resources and raw material. This will
affects to to make better productivity as well as profitability of an organisation. The necessity is
to study all internal factors like resources, capabilities and core competencies in respect to attain
desired goals or objectives of the company. After that they have to organise swot framework to
observe strengths and weakness of an enterprise. This will support to avoid negative impacts of
threats and improve positive affects of opportunities.
REFERENCES
Books and Journals
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Hale, J. K. and Lunel, S. M. V., 2013. Introduction to functional differential equations (Vol. 99).
Springer Science & Business Media.
Rausch, P., Sheta, A. F. and Ayesh, A. eds., 2013. Business intelligence and performance
management: theory, systems and industrial applications. Springer Science & Business
Media.
Serfozo, R., 2012. Introduction to stochastic networks (Vol. 44). Springer Science & Business
Media.
Wilson, J., 2014. Essentials of business research: A guide to doing your research project. Sage.
Vlot, A. and Gunnink, J. W. eds., 2011. Fibre metal laminates: an introduction. Springer
Science & Business Media.
Muhtaroglu, F. C. P. and et. al., 2013, October. Business model canvas perspective on big data
applications. In Big Data, 2013 IEEE International Conference on (pp. 32-37). IEEE.
Sako, M., 2012. Business models for strategy and innovation. Communica
Murphy, P. E. and Schlegelmilch, B. B., 2013. Corporate social responsibility and corporate
social irresponsibility: Introduction to a special topic section. Journal of Business
Research. 66(10). pp.1807-1813.
Laisheng, X. and Zhengxia, W., 2011, January. Cloud computing: a new business paradigm for
E-learning. In Measuring Technology and Mechatronics Automation (ICMTMA), 2011
Third International Conference on (Vol. 1, pp. 716-719). IEEE.
Linder, M. and Williander, M., 2017. Circular business model innovation: inherent
uncertainties. Business Strategy and the Environment. 26(2). pp.182-196.
Online
Porter's Five Forces. 2013. [Online]. Anailable through
<https://www.strategicmanagementinsight.com/tools/porters-five-forces.html>
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