Importance of PESTEL Analysis in Context of Softcat PLC

This article discusses the importance of PESTEL analysis in the context of Softcat PLC. It explains how PESTEL analysis helps in planning, scanning the internal and external environment, deep interpretation, identifying opportunities and threats, understanding the business environment, and building strategic thinking. The article also provides a PESTEL analysis of Softcat PLC, covering political, economical, social, technological, environmental, and legal factors.

PESTEL Analysis

INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................2
Task 1.....................................................................................................................................2
Structure and governance of Softcat PLC.........................................................................2
Task 2.....................................................................................................................................4
Importance of PESTEL analysis in context of Softcat PLC..............................................4
Task 3.....................................................................................................................................6
PESTEL Analysis of Softcat PLC.....................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Organisations are always dependent on their external environmental behaviour. The
environment is the basis of all wealth that a firm needs to generate value to it’s business.
Moreover, it is a place where the consumers are ready to pay for the firm’s products or services.
Therefore, it is important for an organisation to stabilize it’s trend and adapt it’s tactic to the
external environment. This is done through a tool called PESTLE analysis. PESTLE analysis
stands for political, economical, social, technological, legal and environmental factors. The main
target of it is to recognize growth and developments associated with these six factors that signify
current or future opportunities and threats to the firm (PEST Analysis Ultimate Guide:
Definition, Template, Examples, 2020). The following discussions are based on the importance
of PESTLE analysis and deep study of it’s factors in context of a firm Softcat PLC.
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MAIN BODY
Task 1
Structure and governance of Softcat PLC
 Overview: Softcat is one of the leading international IT firm founded in 1993 in UK. It
mainly deals with the information technology services and infrastructure. It’s offices are
located in Bristol, Manchester, London, Marlow, Leeds, Southampton, Birmingham,
Glasgow and Dublin. It has it’s name in a London Stock exchange and constituent of the
FTSE as index of 250 (Pan, Chen and Zhan, 2019). History: From the duration of 1993 to 2015, Softcat was considered as private limited
company. Initially it’s business name was software catalogue. From the duration of 2015
to present it is considered as public limited company and it was operating as offerings to
public. It was founded in Wardswift, later it was shifted to high Wycombe, and then
moved to Marlowin in 2006. In 2016 It again shifted to Glasgow, in 2018 it has expanded
in Dublin, and then finally to Birmingham. It was founded by Peter Kelly, in 2005,
Martin Hellawell became managing director and then he became CEO and chairmen of
the company. Later in 2018, he was replaced by Graeme Watt as a CEO of a firm.
 Board of directors: They are the people who direct and organize the company and make
the necessary decisions for the company. They are the most senior authority who have the
powers to control the whole organization means they are the top level management of the
company. Softcat consist various posts in board of directors like chairman, executive
director and chief executive, chief financial officer and non-executive director. Where
Martin Hellawell is the chairman, he joined in 2006 and in 2018 he became the chairman.
Graeme Watt is the executive director and chief executive and joined in 2018. Graham
Charlton is the executive director and chief financial officer and joined in 2015. Vin
Murria OBE is the independent non-executive director and joined in 2015. Karen Slatford
is the senior independent non executive director and joined in 2019. Robyn Perris is the
independent non executive director and joined in 2019 (Christodoulou and Cullinane,
2019).
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 Structure: Structure of the organization from top to bottom level people are as follows.
Top most person is the CEO of the company. Under CEO, there are nine persons who are
considered as board of directors, they are operations director, sales director, legal
director, CFO, alliances and marketing director, human resource director, finance
director, managing director and CIO. Under these heads there are managers of each
departments who handles their assistants who ultimately manages the subordinates of a
firm. The people who are working on operational level who have direct contact with the
end customers are all operated, directed and controlled by the high level of management
which are responsible for the decision making for the firm (Brito and Harkiolakis, 2017).
 Governance: It’s governance is responsible for long term success for the firm and gives
effective leadership to their subordinates. They are responsible for the team’s aims to be
planned strategically ensuring that the essential financial and human resources are it’s
best work and place to meet their desired goals. Governance are responsible for the
business’s growth and development process and review the performance of team who
handles the management of the company. They ensures the systems that are internally
controlling and management of risk which includes the financial, compliance controls,
operational and the overall scanning of the system. They are responsible for the approval
of any changes made in an organization like capital change or corporate structure change.
They help these types of meeting seven times per year. Company has a formal structure
for scheduling matters that are reserved for the approval by the boards which sometimes
are delegated to other committees but the specific once not. Firm’s procedures, advices
and services have the direct access by the governance to manage all these compliance by
themselves. They ensures that there is a good and positive flow of information from top
level to bottom level or vice versa. They majorly handles the expenses and providing
necessary resources to the team for efficient working. Due to the lot of pressure and
responsibilities on board, they usually delegate some of them to the nomination,
remuneration and audit committees. Audit’s responsibilities are to control internally and
financial reporting. Nomination’s responsibilities are to reviewing the size, composition
and structure of the board. Remuneration’s responsibilities are to manage policies by
determining the levels of the remunerations (Barik and Kumar, 2018).
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Task 2
Importance of PESTEL analysis in context of Softcat PLC
 Applied on any organization: PESTLE analysis can be implemented on any type of
organization whether small or big, private or public, international or national, business or
firm and many more. Effectiveness on any organization is the same, it doesn’t matter
what is the type of an organization. Softcat is the big international private firm, so it
definitely needs the deep analysis of PESTLE factors so that they can manage the firm
accordingly on the basis of each external factor as they are associated with the external
environment which is necessary for the internal working of the firm. Therefore, PESTLE
factors are applied on any firm so anyone can review it for their business (Shatskaya,
Komaristaya and Kafian, 2017). Helps in planning: PESTLE analysis of any firm is important because it helps in
planning and planning is the primary managerial function which is essential on any type
of firm. Without planning function it is impossible to carry out other functions in an
organization because planning leads to the initiation of the company. This important
function is majorly implemented by the PESTLE analysis because it analyse the factors
which are required in planning. Softcat’s planning is mainly done by the board of
directors and managers, they use to analyse all the factors internal or external and start
executing them. Therefore, PESTLE factors results in the efficient planning which leads
to the succession of a firm.
 External and internal scanning: PESTLE analysis is generally known for the external
behaviour of the environment but it also links with the internal environment of the firm.
For a company, both the factors are necessary to scan, internal as well as external so this
can be done through PESTLE analysis. There is a deep linking between internal and
external environment of the firm. Softcat’s external environment analysis is done through
PESTLE factors because it directly affects the internal system of an organization. For
example, if external factors are unfavourable then it can affect the internal environment
negatively or vice versa. Therefore, growth and development of the firm depends on the
linking of internal and external factors of a company (Vallati and Grassi, 2019).
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 Deep interpretation: PESTLE analysis has it’s importance due it’s deep analysis nature.
Just an overview of anything can never benefit a firm until and unless it is deeply studied
for analysis. This is done through PESTLE factors. It states that deep interpretation of
anything makes that thing more valuable to use and identification of it benefits more.
Softcat’s deep analysis of PESTLE factors helps the firm to manage it’s internal
environment for better productivity, effective working and efficient management. All
over operations of the firm are dependent on the analysis of these factors deeply so that
they can gain more sales and revenue generation (Düerkop and Huth, 2017). Opportunities and threats: PESTLE analysis has it’s importance in analysing the firm’s
threats and opportunities. It is very essential for any company to know that where they
are lacking and where they can gain. It can be interpreted by doing PESTLE analysis for
a particular firm. So that they can build up their operations accordingly in order to
develop and grow in an industry. Softcat’s PESTLE factors can be analysed by high
skilled person as it a vast company so interpreting can be difficult at every point that
where the firm is lacking or gaining. Therefore, deep analytics has to be done for the firm
to better know the threats and the opportunities so that they look into threats to overcome
that and opportunities to grab that.
 Easy understanding of business environment: PESTLE analysis helps the firm to better
understand and apply it’s factors to their business. It is an easy way to analyse external
environment because using these factors as elements of interpretation are user friendly
and comfortable in understanding that what they are trying to teach and what to avoid.
Softcat’s employee are high skilled to analyse such deep studied factors but there is no
such problems in understanding them and using them. They are not at all technical, but
they are simple, researching work, analysis work and understandable. Therefore, it is said
that doing analysis of PESTLE factors can bring firm to an edge of easy and smooth
going in such comfortable manner (Nurmi and Niemelä, 2018). Builds strategic thinking: PESTLE analysis helps the people in building up their
thinking abilities in a tactic manner. This makes the human mind more calculative and
analytical to interpret enough about the company’s threats and opportunities. This can be
considered as a part of development of employees as it leads a personal growth in a
person. Softcat’s workforce can be in advantage in doing analysis of PESTLE factors as
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they can develop their mind enough to think and research the market deeply which can
result the firm in a positive manner because until the staff are not appropriate in doing
these analysis then it can be of no use. Therefore, training and development is important
to employees and PESTLE analysis can be a small part of it.
Task 3
PESTEL Analysis of Softcat PLC
 Political Factors: This factor aims at the long term goals of the firm. It helps the
company to study about the risks that are associated with the political factors. This is a
study of deep analysis about what political consequences are going on for a particular
industry and how it can benefit the business. In context of Softcat, there is political
instability it is expanded in different countries so political tensions are genuine. There are
frequent changing policies due to bureaucracy and corruption. Therefore, this can be a
threat for the firm to grow in a particular industry in it’s host country (Silinevicha and
Kalinina, 2017).
 Economical Factors: This factor aims at the factors like inflation rate, savings rates,
interest rates and many more. It helps the firm to deeply analyse the economical factors
related with the industry in a particular country so that the company could lower it’s risk
to grow and develop in the business field. In context of Softcat, There are high
fluctuation rates of inflation or interest. They are having unfavourable labour market
conditions. Economic structure is also not going well due to Brexit. Therefore, this can be
a threat for the firm to develop in a industry where economic factors limits the growth of
a firm (Zahari and Romli, 2019). Social Factors: This factor aims at the societal values, trends and norms. By studying the
consumer behaviour related to their spending and expenses, their ways of shopping and
income generation. Company can have a benefit in it’s marketing structure because
knowing all these things about customer definitely helps the firm in it’s sales generation
and profit making. In context of Softcat, in today’s world there are demographic trends,
equality, gender roles and society norms. These are in favour because moving with the
trend helps the firm to keep pace with the people for what they actually desire for and in
what way, so that the firm could make the availability of that service or product at the
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instant. This can be an opportunity for the company to grow in this industry for it’s
betterment, reputation and brand image.
 Technological Factors: This factor aims at the continuous innovation in technology for
the efficient operation in a firm. Technology is used everywhere now a days, so it is
important to adopt the same with it’s regular advancements and updated features for the
smooth functioning in an organization. In context of Softcat, there is an increase of social
media marketing which is affecting world in a positive way. Innovation in technology
and level of development is touching heights. Softcat is itself a technical firm so it is
important to be updated on a regular basis for their customer service at every point in
every possible way. Research and development technology is widespread which has a
direct impact of cost structure of the firm and it’s value chain. Moreover, product life
cycle has also been shortened up so that cost can be decreased at some point. This can be
an opportunity for the firm to develop in an industry with a good pace (Khan and Suhaib,
2019). Legal Factors: This factor aims at various laws that are mainly defined by the
government which are legally accepted by every company while establishment of it’s
business. These are the factors which are to be taken care the most because they are
related with the legal issues and no firm can bear the illegal image of it’s company. In
context of Softcat, there are laws such as employee protection, consumer protection and
intellectual property. These are favourable to a firm because currently firm is not facing
such legal issues and is clear in all legalities. So this can be an opportunity for a firm to
develop it’s brand image and reputation by gaining the loyalty from customers by
following the legal factors of a country. Environmental Factors: This factor aims at the climatic conditions of a country which
can directly affect the firm in it’s market conditions to bear it’s losses or profits. It is also
important for the firm to use such raw materials and products which are environment
friendly and not harm the environment in any way. In context of Softcat, they must work
on recycling and management of waste, technologies of renewable resources, attitude or
mentality towards products like eco-friendly and regulations in environment just to avoid
depletion of resources. So this can be the opportunity for the firm to grow in a country by
taking care of it’s environmental factors (Gegg and Wells, 2017).
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CONCLUSION
It is concluded that PESTLE analysis is a very essential model for a business which mainly
focuses on the external environment of a firm. From political to legal factors, each of them
contains variables that prepare the decision making of a firm. In context of Softcat, Political and
economical factors are on threats side and rest of them are on opportunities side. It is important
for the firm to target their opportunities first so that threats can become easy to tackle for the firm
in it’s growth and development in UK.
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REFERENCES
Books and journal
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from the Implementation of a Port Energy Management System: A SWOT/PESTLE
Analysis. Sustainability. 11(21). p.6046.
Brito, T.L.D. and Harkiolakis, N., 2017. Influence of UK economic and market policies on a
small wine merchant. International Journal of Teaching and Case Studies. 8(1).
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Barik, B. and Kumar, S., 2018. Macro Environment of Indian Life Insurance Business: A
PESTLE Analysis. Bimaquest. 18(3).
Shatskaya, E., Komaristaya, E. and Kafian, K., 2017. The study of the hungarian car refinish
market on the basis of pestle analysis. SCOPE ACADEMIC HOUSE B&M
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Vallati, M. and Grassi, A., 2019, July. AI to Facilitate Legal Analysis in the PESTLE Context.
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Düerkop, S. and Huth, M., 2017. Transportation under Threat–A PESTLE Analysis for Critical
Logistical Infrastructures. ICTA2017, p.14.
Nurmi, J. and Niemelä, M.S., 2018, November. PESTEL analysis of hacktivism campaign
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Cham.
Silinevicha, V. and Kalinina, K., 2017. THE DEVELOPMENT OF THE EVALUATION
SYSTEM OF FACTORS, INFLUENCING ON THE ORGANIZATION FOR THE
PREVENTION OF RISKS OF ITS ACTIVITY IN THE MARKET IN ANY FIELD
OF ACTIVITY, USING PEST--ANALYSIS. Professional Studies: Theory &
Practice/Profesines Studijos: Teorija ir Praktika, (18).
Zahari, A.R. and Romli, F.I., 2019. Analysis of suborbital flight operation using
PESTLE. Journal of Atmospheric and Solar-Terrestrial Physics, 192, p.104901.
Khan, S.S. and Suhaib, M., 2019. Evaluating an International Human Resource Management
Strategy for New Telecommunication Group in Developing Countries, Concentrating
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Gegg, P. and Wells, V., 2017. UK macro-algae biofuels: a strategic management review and
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Online:
PEST Analysis Ultimate Guide: Definition, Template, Examples. 2020. Available Through <
https://pestleanalysis.com/pest-analysis/>./
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