Talk Talk UK PESTLE Analysis

The assignment involves conducting a PESTLE analysis of Talk Talk UK, a telecommunications company in the UK. It requires analyzing the company's strengths and weaknesses, as well as environmental factors that may impact its operations. The report also includes a discussion on how Talk Talk UK can cope with changes in laws and regulations, as well as environmental changes such as climatic changes. The analysis is presented in a clear and concise manner, providing insights into the company's market position and potential challenges.

PESTLE Analysis of TALK
TALK UK

Table of Contents
INTRODUCTION...........................................................................................................................1
Main body........................................................................................................................................1
History of TALK TALK UK......................................................................................................1
Importance of PESTLE Analysis................................................................................................2
Impact of PESTLE analysis........................................................................................................4
CONCLUSION...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
PESTLE analysis refers to structure of external environmental factors of a business. This
stands for Political, Economic, Social, Technological, Legal, Environmental factors which are
uncontrollable by the company. These factors have a direct impact on the working of the
business. TALK TALK UK provides telecommunications, mobile network, internet access to
consumers and businesses in UK founded in 2003 (Gause, 2016).. Its headquarters are situated in
London. The following report will describe the history, organisational structure of TALK TALK
UK. This study will also explain about importance of PESTLE analysis and its impact on TALK
TALK UK.
Main body
Overview of TALK TALK in UK
TALK TALK is a public listed and a telecommunication company born in 2003 as
subsidiary of carpool warehouse. It has been working as single business entity after separation
with carpool since 2010. Initially it provided only basic telephonic service, eventually it has
diversified its area in paid television, internet service, mobile network provider. Talk talk is a
listed company in UK stock exchange.
Company has its focus on small businesses and partner channel. For small business it
provides cloud storage, broadband, call facility to business working in financial, transportation ,
retail and manufacturer service. At enterprise level it offers multi sit WAN solution, project
management and consultancy service (Gause, 2016).. For partner channel, TALK TALK work
with public sector and corporates. For sometime company was in news for failure in full fill the
expectation of consumer which it raised by promising “Free broadband forever”. It was said to
consumer to remain in 18 month contact, in which TALK TALK gave 40 GB monthly with 8
Bit/s speed. It could not retain its promise because of high consumer number with low data
speed. In 2010 TALK TALK faced issue regarding wrong bill sent out to the customers. For this
it was heavy penalised with £3 million. TALK TALK purchased ADSL of virgin media. It also
purchased blink box which is entertainment service. It also bought broadband service of Tesco.
In 2015 TALK TALK met with cyber attack in which data of its customer was stolen. TALK
TALK claimed to receive ransom demand for data theft. In 2016 customer of TALK TALK
company lost internet access due to a malware infection.
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Their focus is on small business of retail sectors, transport, manufacturing, and financial
services by providing services such as call recording, business broadband and phone lines.
Services such as hosted solutions, multi-site WAN, centralised IT infrastructure are provided to
enterprises.
Sir Charles Dunstone is the founder of Talk Talk in 2002. Appointed as Chairman of Talk
Talk in 2010, he in May 2017 became Executive Chairman of the group. Currently, he is the
Chairman of Royal Museums Greenwich. The group has become the leading business in line
communications because of direction of Sir Charles (Gause, 2016)..
B) How the company is governed
Company has been involved in following the organisational structure that includes board
of directors, managers and employees. The structure has been designed in a way that increases
the efficiency and productivity of firm. This also supports them in growing there market share
and increasing there profit margins. Mangers are involved in encouraging employees to perform
better. They provide them with better and safe working place so that they can grow and explore.
Also, board of management also lays emphasis that workers are been involved in decision
making process. It makes there judgements better and also new ideas are given by employees
that can support company in growing. All this build a positive relationship between workers and
organisation. It is beneficial for both firm and workers as this enhances efficiency of employees
plus it helps company in earning more revenue. Effective communication is been placed in Talk
Talk UK, which helps the managers to find out solution to problem in most easy an defined way.
It also builds a relationship of trust between them.
 Sir Charles Dunstone is executive chairman and appointed in 2010 and Tristia Harrison
is CEO of the company who appointed in May 2017.
 There are 6 Non-Executive Directors working in it. Kate Ferry, a chartered accountant is
Chief Financial Officer.
 Stakeholder: They are the person who is an independent party with whom each of the
person whose wages can be shared. These stakeholders can be a employee, customers of
the citizen who are involve in an organization. The board of directors relationship is as
follows:
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Employees: The BOD provide bonus on their employees and promote their employees in
order to enhances their working performance. As they also increases their pay and taking
feedback in order to determine the working performance.
Shareholders: the company's shareholder are also maintain their relationship with Board
of Directors in order to determine the exact prices of the company's offered product and services.
Whenever the BOD has to call up the Annual General Meeting then they also maintain the
relationship with their share holders.
Profit in pound 2015 2016 2017
1615 million 1682 million 1783 million
Corporate Social Responsibility: The company provide digital society in possible way
such that TalkTalk also reamed up with Good Things Foundation in order to provide the benefits
of having digital skills and their also provide different strategies which focus on inspiring and
supporting people and organization to share those skills. Digital charity inclusion is the partner
who help more people for digital technology and also protect themselves form online threats.
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Illustration 1: UK Market share

Ambitious about Autism is another charity which support TALK TALK in order to raise
educational fund for student who faces tough situation. Company also raise £ 420K through its
annual charity in order to support children and young people with Autism. TALK TALK group
donated £ 24800 to about 130 UK charities and also introduce our energy policy that further
includes a ten year energy intensity reduction target of 80 percent which is on track to deliver as
annual report of 2018 (Annual Report of TALK TALK, 2018).
PESTLE Analysis
Importance of PESTLE analysis: IT refers to the impact of Political, Economic, Social,
Technological, Legal and environmental factors on the business which cannot be controlled by
the business or whose impact cannot be determined but these have an direct impact on the
business. It is important for the business because-
A plan for expansion of business- To identify changes in the environment PESTLE analysis
becomes a helping tool for it. All these factors will affect the company in coming future. With
the help of this analysis an appropriate plan for the expansion of business can be made. It can
also be helpful in determining the impact of business' practices and strategies on the working of
business.
Determining costs- Through PESTLE analysis costs of products and services and production
costs of the firm can be determined. As the market is dynamic in nature so the demand and
supply forces for a particular product are also changing. In order to continue business for a long
run costs are need to be determined and this becomes easy with PESTLE analysis (Gause, 2016).
Determining the steps- PESTLE analysis becomes important for a business as it helps to
determine the necessary steps which are need to be taken before stating up of a new business.
Before starting a new business the environment in which the business is to be brought is to be
examined critically and also the impacts of these factors on the environment chosen is to be
known. With these the future of new business in that industry will be known to owner and this
will allow them to start the business in a more efficient manner.
Accessing the right target market- Through PESTLE analysis right target market can be
chosen with the help of Maslow's pyramid. This will be helpful in making the business a
customer oriented as this will able business to provide products or services which are needed by
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the consumers. This will also be helpful in providing satisfaction to consumers and retaining
them.
Encourages strategic thinking- PESTLE analysis will increase strategic thinking inside
the organisation as it is simple and easily used for determining the effects of possible threats of
the firm. Predictions about the future are already made by the company which involves framing
of new policies and strategies which will be able to reduce effects and impacts of these factors.
Identifying opportunities- PESTLE analysis is also helpful in identifying new opportunities for
the business by providing a mechanism which identifies these opportunities. Through this, new
markets to enter whether nationally or globally can be determined.
Understanding market- It is important to understand the market in which the business is
running his operations. Without knowing market a business cannot frame its policies and
procedures for working. Through PESTLE analysis market can be made understandable in better
way. All the possible impacts of these factors can be determined and accordingly business can
make its policies and procedures. Strategic thinking also becomes simpler with PESTLE
analysis.
PESTLE analysis is also helpful in preparing the company for the coming threats.
Because all these factors are not constant and are changing from time to time they can proved to
be favourable and non favourable for the company. This analysis will be helpful in knowing
favourable and non favourable impacts of these factors on business and accordingly top
management can frame their policies and strategies.
PESTLE analysis will help the company to reduce wastage of their resources like raw
materials, money etc. As the company can already determine possible effects of these changes
this will allow the producer to determine whether they can use these resources for further
production process or not as demand and supply forces in market is going to change. With this
other resources like time, money and manpower planning can be saved from the impacts of these
factors.
Through PESTLE analysis technology of the firm can be upgraded. In today's modern
environment, technology is improving day by day and with this change it becomes necessary for
the company to improve its technology. Consumers are now concerned more about quality of
product and quality can be improved with the help of new technology. To satisfy customers,
technology up gradation becomes an essential part for the businesses. Through technology up
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gradation workers will also be up graded as it will improve their knowledge and new ideas for
development of product will also be ascertain. This will help in innovation of the product and
will attract more number of customers (Bocken, 2017).
PESTLE analysis also involves changes in government policies and procedures. These
have a positive as well as negative impact on the business. Some of its policies can be helpful in
increasing the growth and success of the business and some will affect the production process
and will lower success of the firm. Some government procedures will simplify the idea of
starting of new venture and entry to global market while some of them will be proved to be
difficult for business. These changing of government policies and procedures will lead to a
situation of delay in production process by which productivity of the firm will be affected and its
market image will be hampered.
Impact of PESTLE analysis
PESTLE analysis can be proven to be favourable as well as non favourable to TALK
TALK UK. This can be determined as follows-
Political- This includes the factors which come in the political situation and its relation
with other countries. Policies of government, laws made by them, rules and procedures for
conducting a business comes under political factors. Procedures related to trade practises, rules
regarding supply and imports and exports procedures which are needed to conduct a business are
considered as political factors. This will include political system of that country, its international
relations and subsidies offered by government. Working of TALK TALK UK is influenced by
these policies and procedures as they prove to be complex and time consuming process for
producing a new product. The laws and taxes made by government regarding trade and tariff will
affect import and export activity of the firm. It may cause delay in delivering or improper
network will lead to effect on company's image.
For example:
 Brexit will directly affect TalkTalk external environment such that it will affect all
company performance and as a result, their sales decreases.
 If UK political factor will remain unstable then it directly affect customers spending and
if the spending become law then it will directly affect company's financial performance.
Economic- The interest rates, fiscal policies, inflation rates, monetary policies and
foreign exchange rates which determines the economic condition of country comes under
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economic factors. These will have an impact on process of determining prices of the products
and services, TALK TALK UK provides to its consumers and other small businesses. The
fluctuations in inflation rates and interest rates will give a positive impact to increase the prices
or a negative impact to reduce its prices (Bocken, 2017). Also, these change of prices in frequent
interval of time will hamper the working of organisation and success of the company. Economic
factors also include supply and demand for a product or services as their prices are continuously
changing and consumers will not be able to prefer to buy a product. Implementation of heavy
rates of taxes will not be able to attract customers to buy a product.
For example:
 the high rate of inflation will directly affect company's economic growth of UK and as a
result, the company's performance will be decline.
 Recession is the another example that also affect company's financial performance.
Social- These includes behaviour of customers. Society, culture in which consumers are
leaving comes under this factor. The purchasing power of consumers are affected by these
factors. The decisions regarding buying of a product is based on consumers' beliefs, nature,
choice and preferences. Size of the family, thinking of very member regarding the product also
affects decision to buy a product. Goods and services provided by TALK TALK UK, are
affected because of all these social factors. If TALK TALK UK is providing its services
considering all these aspects then these factors will give a favourable impact on the company.
Social lifestyle aspects, gender, demographies and domestic culture will influence the mindset of
people regarding buying a particular product. As every person have its own mindset, purchasing
power is also based on its mindset through which demand for a product is influenced.
For example:
 In UK there is a sudden increase rate of immigration and Emigration which also changes
the preference of the customers and as a result they chooses another company and as a
result the company's performance decline.
 TalkTalk should also provide best quality of service with low and affordable prices and
always monitoring its rivals strategy.
Technological- These include changes in technology. It is taking place from minute to
minute and consumers are also upgrading themselves according to these technological changes.
Like customers, it becomes necessary for TALK TALK UK to upgrade itself accordingly.
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Because of these changes customers are showing more interest towards the quality of products
then the prices. To retain and to attract more number of customers producer should produce the
product which satisfies consumer's needs. This includes use of robots in production process so
that quality of product can be improved. Development of technology will improve efficiency and
productivity of the organisation. Development in quality will improve product and more
customers will be attracted towards it this will improve the company image in market and
chances for survival for long period will get higher. Use of robots will reduce wastage of
resources and lower the costs of production.
For example:
 Quoted company should also adopt all new techniques into the working area so that it
will help to improve the customer base.
 Today every individual uses digital technology therefore, it is quite necessary for them to
adopt and implement new digital technologies.
Legal- This includes government intervention in society for maintaining well being of the
economy. The main difference between political and legal factor are that political is concerned
with economy's growth and legal is concerned with maintenance of its well being. It involves
changes in legislative culture which can be positive or negative for business (Bocken, 2017).
TALK TALK UK analyses all legal factors which will help them to simplify process regarding
export and imports of raw materials (Aithal, 2017).This analysis will be favourable as it will help
them in identifying the laws which are illegal in practise. Through PESTLE analysis, it can be
determine that whether working of the firm is legal or illegal. I
For example:
 It is necessary for the firm to be legal in his practises and should follow every rules stated
by government. TALK TALK UK ensures his working and practises to be legal which is
helpful in creating a goodwill in market.
 Talk Talk should also sudden implement all changes in the laws so that it will help to
cope up with this factor.
Environmental- It is related to environment of the country. This involves climate,
geographical location and weather around which the company is operated. This also adds to the
demand and supply forces of a product. TALK TALK UK monitors these environmental
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changes and make pre-plans which can be assessed during time of production. They store their
raw materials which are seasonal based and are used at time of production of product which can
be made available to customers throughout the year. Climatic changes also influences the choices
of consumers. Environmental factors also affects farming business. For example, India's
agriculture is fully based on monsoon and if there is shortage of monsoon, the whole agriculture
will get affected. All these factors have both positive as well as negative impacts on the
organisation.
For example:
 Talk Talk should follow sustainability and must take care of environment while
performing any activity.
 Variables like climatic change, pollution and animal extinction are included in this factor.
Some raw materials which are needed for production are seasonal based but the finished
product is available throughout year.
CONCLUSION
From the above study it has been summarised that talk talk uk has various strength and
weakness which if analysed properly helped them in growing. Also, report discussed about
various environmental factor that has negatively and positively affected there working.
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REFERENCES
Books and Journals
Bocken, N., 2017. Business-led sustainable consumption initiatives: impacts and lessons
learned. Journal of Management Development.36(1). pp.81-96.
Gause, R., 2016. UCF Research Guides: Business Research--Industry Analysis: PESTLE
Analysis.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external
risks in construction projects. International Research Journal of Engineering and
Technology (IRJET).3(1). pp.384-388.
Abbott, R.J., 2015. Pestle Analysis for Students.
Aithal, P.S., 2017. Company Analysis–The Beginning Step for Scholarly Research.
Online
Roles of Organizational Structure. 2018. [ONLINE] Available through:
<https://smallbusiness.chron.com/roles-organizational-structure-3795.html>
Annual Report of TALK TALK. 2018. [ONLINE] Available
through:<https://www.talktalkgroup.com/dam/jcr:ad5e4acb-8e7e-40f5-9525-
ff4b33dbccaa/TalkTalk%20Annual%20Report%202018.pdf>
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