Impact of Internal and External Environment on Business Activities of L’Oreal

REPORT ON IMPACT of
Internal and external
environment

Contents
INTRODUCTION...............................................................................................................................3
MAIN BODY.......................................................................................................................................3
P4 Identify the positive and negative impacts the macro environment has upon business operations3
P5 Conduct internal and external analysis of specific organisations..................................................5
P6 Explain how strengths and weaknesses interrelate with external macro factors...........................6
CONCLUSION....................................................................................................................................6
REFERENCES....................................................................................................................................8

INTRODUCTION
Business environment includes all the internal and external factors that affect
anorganisational functional and operational activity in direct and indirect manner (Babu,
2012). An organisation can control the impact of internal factors but the impact of external
factors are beyond the control. This report is based on L’Oreal which is a French personal
care company based on Paris. This report is going to determine the impact of internal and
external environmental factors upon business activities of L’Oreal.
MAIN BODY
P4 Identify the positive and negative impacts the macro environment has upon business
operations
Macro environment includes the external environment which does effects the
operations and activities of any organization. Any change done in external environment puts
both negative and positive impact upon the business. Macro or external environmental factors
are the factors which are not in control of any business, they work independent. Some of the
external factors include political, economical, social, technological, legal and environmental
factors. The PESTEL analysis of L’Oreal Company is as follows:
Political: The political factor states the degree towards which the government rules the
industries. The political factors include foreign trade rules, government policy, stability,
corruption, tax policy, labor law, trade policies and the like. The political state of UK is very
stable which benefits the industries or companies working into the country. The UK also has
changes their tax rates which had an impact upon the companies. Apart from this the Brexit
also put major impact upon the economy.
 Positive: As the UK government is very much stable, it benefits the L’Oreal as they
can concentrate more upon their operations and keep them stable. They do not have to
change their policies or their activities for operations with accordance to the changed
rules and policies of government.
 Negative: The UK government had changed their tax rate which resulted into increase
In the VAT, for L’Oreal’s products which it offers to the people has to get increase
resulting into increase into the cost of products. Also Brexit has resulted into the
confusion among industries as how they need to get their operations done now.