Pestle Analysis and Porter's Five Forces Model Application

The provided document is an assignment that applies PESTLE analysis and Porter's five forces model to the healthcare industry. The first part of the assignment is titled 'Pestle Analysis' and provides an overview of the model, followed by a breakdown into six categories: Political, Economic, Social, Technological, Legal, and Environmental. The second part is titled 'Porter's Five Forces Model' and discusses the five forces that affect competition in an industry: threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products, and intensity of rivalry among existing competitors. The assignment also includes a list of references from academic sources such as journals and books.

STRATEGIC MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Strategic direction of Bupa and the development within the past 5 years. ............................1
TASK 2............................................................................................................................................2
1. PESTLE analysis to review the external environment. ..........................................................2
2. Porters Five forces model for analysing Bupa's competitive advantages among its
competitors..................................................................................................................................5
TASK 3............................................................................................................................................7
1. Strategic drift of company.......................................................................................................7
2. Mission and Vision of Bupa....................................................................................................8
3. Strategic Capabilities..............................................................................................................8
4. Business Canvas Model........................................................................................................10
TASK 4..........................................................................................................................................10
1. Strategies that Bupa can follow in order or to defend its core business...............................10
TASK 5..........................................................................................................................................11
1. Analyse and measure the resource implications of your recommendations that the Bupa has
to address...................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic management is the management of the resources of company to achieve its
goals and objectives. Setting of aims and objectives, analysing in the competitive environment,
analysing the internal organization, measuring strategies as well as ensuring the roles of
management is the main aim of strategic management (Ginter, Duncan and Swayne, 2018). The
main purpose of strategic management is building the power so that company is able to compete
in the global or local market. In this present context, Bupa Company is chosen for assessment. It
is health-care industry originally a British United Provident Association operating Bupa as well
as all over the world including UK, USA, India, Australia, New Zealand and many other
countries. It provides health insurance, care homes, hospitals and health at work, dental clinics
and health assessments. This report will include strategic direction of Bupa and the development
within the past 5 years. Pestle analysis will also be included in this above assessment. This report
will also make understand Business Canvas Model. Moreover, company’s strategic capabilities
will also be the part of this assessment.
TASK 1
1. Strategic direction of Bupa and the development within the past 5 years.
Bupa is a health-care organisation which provides effective health and social care
services to the people. In order to satisfy the needs and requirements of leaders, Bupa plays
strategic role. They have intense focus on optimizing the level of satisfaction to customers. Bupa
was found in the year 1947 when 17 British provident associations joined together to provide
health care to public. Main purpose of Bupa is provided and supplies the highest quality of
services to in health care field (Macinko and Harris, 2015). Bupa has contributed a large amount
of investment in the area of innovation as they provide highly innovative services to customers
as well as to achieve competitive benefits in the market. Bupa has formulated different strategies
in the past 5 years and management of organisation has made many more strategies as well as
modified them as per the changes required by market. The strategies of Bupa are thinking at a
large extent.
Here are some strategic plans of Bupa in the last 5 years which are as follows:
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Putting customers in first priority: This is the first and main strategy of Bupa that they
put their customers at first priority. Bupa is giving high satisfaction to customers by supplying
outstanding experience to them with high quality clinical outcomes.
Digital transformation and regular development- Bupa has contributed a large amount
of fund in the field of innovation and creation. They make their work easier and faster which will
give more satisfaction to customers as well as employees. They come up with innovative tools
and equipment like clinically-led system and many more.
Bupa business plan - Putting their customers on first priority is the first title of Bupa.
They developed this strategy with the purpose of supporting the system of commission to use the
crucial resources of public for quality improvement and obtain the best outcomes for consumers.
The entire focus of Bupa is on customer's satisfaction rather than on earning profit (Wager, Lee
and Glaser, 2017).
Bupa resources and funding- Bupa also develops an impressive strategy to aid
modification of the local health care system by the help of dispersion of funding as well as its
people. This strategy has focus on entire development of health care system for public which
help Bupa in building an optimistic brand image in the global market.
Expanding into related line of business- This strategy of Bupa focuses on the expansion
of services in various other services like dental and digital as per needs and wants of customers
which in result improve the brand image of company as well as deep connection with consumers.
Maximising value through healthcare coordination- Bupa is a trusted coordinator which
is a recognised health care provider across world. They provide efficient and smooth experience
with optimistic results in patients’ health. By their trustful services, Bupa makes their customers
happy and healthy.
Therefore, from the above discussion, it is clear that in order to achieve the organisational
gaols and objectives, Bupa is continuously growing its business plans and strategic management.
The strategies and plans of business are very effective and efficient. Bupa has now developed
their infrastructure by giving health and social care services to people. Bupa has invested a large
amount of fund in the area of innovation and creation. They are improving their services and
products by contributing high amount of fund in innovation. They are maximising value through
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healthcare coordination building honest image. Customers are attracted on the Bupa by giving
optimal services to customers . They also focus on the quality, efficiency, safety and cooperation.
TASK 2
1. PESTLE analysis to review the external environment.
PESTLE Analysis- PESTLE analysis is a tool that helps business to understands the
impact of macro-environmental factors on business. It is a tool that assists in making strategic
decisions of business. PESTLE stands for P- Political, E-Economical, S-Social, T-Technological,
L-Legal and E- Environmental factors (PESTLE Analysis. 2017).
Political- There are many factors that have a great impact on the political factors like
insurance mandates, legislations changes of tax and protection of consumers. A political factor is
highly uncomfortable factor that influences the decisions of business. Bupa is greatly affected by
the political conditions of Malta and all other countries where Bupa has its operations.
Performance of Bupa is also affected by the political instability. Changes in policies of taxation
have direct impact on the government spending in health-care sector. Stability in political factors
enable the government to allow increased subsidises.
Economical- Economic factors lay a great impact on the health care organisation.
Economic factors include factors like inflation, banking, unemployment and interest rates.
Changes in these factors affect the spending as well as purchasing power of people. If the rate of
inflation is high than people are not willing to pay on medical devises more and if there is high
rate of unemployment in health-care industries, people will not spend in taking health care
education. Bupa is affecting large by the economic condition of several countries.
Social- Health care organisation is formulated for the social welfare. The first priority of
health and care organisation should be customers health not profit earning. Belief, traditions and
norms of society are included in social factors (Langabeer and Helton, 2015). Bupa relies on
understanding the changes in the values of public as well as changes in demographics. Bupa is
using important oils as a cure for several diseases like flue, fever and many other diseases too.
Bupa is also provides free polio drop for kids.
Technological- Technological factors play a vital role in health care industry as because
of as technological advancement leads to optimistic changes. As because of technological
advancement there are so many diseases which help in reducing many illnesses as well as make
the treatment easy and cure. Advancement in medical devises helps patients to receive better
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care. Bupa is contributing large amount of fund in technical innovations. For example, for
handicapped person, there are so many machines, tools are available which makes easy for
handicapped to walk (Jacobs, Chase and Lummus, 2014). Addition to this, people who are
suffering from gearing disease, innovation has make easy for people to hear by innovative
machines and tools to increase the listening power and furnishing crystal clear sound. Bupa also
makes its development in mobile application also which makes easy for patients to receive care
faster than before.
Environmental- Environmental factors have great influence by the effect of
environmental factors. Bupa has incredible contribution inside the globe. They are contributing
very large in upliftment of environmental conditions of Malta and in other countries as well.
These are reducing pollution by planting many trees. They are organizing campaigns in the
society for giving knowledge about the environmental safety and cleanliness. Beside this, Bupa
has distributed so many dustbins in various societies to make the environment neat and clean.
Bupa is promoting the use of dispensable surgical types of gear and equipment of treatment by
which conditions by which negative effect on environment can be control or reduced to large
extent.
Legal- It is one of the last and the most important factors in the PESTLE analysis. There
are various laws and regulations which companies have to follow and obey. In healthcare sector,
there are so many laws and rules for protecting the interest and rights of patients. Bupa is
following all the laws and regulations of government of country where Bupa has its operations.
These laws and regulations have a great impact on the decision making and functions of
organisation. For example: there is health and safety Act in health care industry which is a right
given to public about their health and organisations operating in health and care industry should
be abide of this act (World Health Organization, 2015).
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2. Porters Five forces model for analysing Bupa's competitive advantages among its competitors.
Bupa is one of the biggest healthcare organisations across world. It has operations in
many countries. They are facing high level of competition in the global market. Among all the
sectors, health care sector is one of the sectors that face intense competitors in the world. In order
to analyse the competitive advantages, Porter's five forces model is the best and useful theory for
organisation (Porter's Five Forces Model. 2017).
Porter's Five Forces- This model was developed by Michael Porter. This is the
framework that is an important tool for understanding the forces that shape competitors within an
industry. The competitive rivalry and strengths in the industry is analysed by the porter's five
forces. There have been isolated attempts to apply this model on competitive benefits to health
care industry. It is a powerful tool that could analyse the competitive environment in which
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Illustration 1: PESTLE Analysis
(Source: PESTLE Analysis, 2017)

product or company works. There are five forces in Porter's Model which are bargaining power
of buyers and suppliers, threat of substitutes and new entrants as well as intensity of rivalry.
Porter's Five Forces model for the firm chosen is given as below:
Power of Buyers- It is the power exert by buyers on the company. They put pressure on
company to lower the price or increase the quality of product. Power of buyers is moderate.
Bupa is also facing high competition by their customers. Lower price means lower the revenue or
profit for Bupa. At the same time, increasing the quality of products means increasing of
production costs. These all conditions will reduce the profit of company. Bupa is doing their
efforts by controlling the power for buyers with providing effective qualities and they are making
more customers.
Power of Suppliers- It is the power or pressure exert by suppliers on company. Power of
supplier is high in health care industry. When suppliers have strong power of bargaining, they
supply low quality of product at high price. It directly impacts on the profit of company. Bupa
also sometimes faces pressure from suppliers but they are able to control the pressure by
maintaining relationship or contact with many suppliers. Thus, Bupa has an option to move from
one to another if any supplier increases the price of raw materials (Rothaermel, F2015).
Threat of Substitutes- Threat of substitutes is high in health care industry because there
is high competition in the market. Buyer can easily move from one to another by reasonable and
attractive price and quality. Bupa is well known company in the world so they had loyal
customers. From the goodwill and its image in the market, Bupa is controlling the power of
substitutes.
Rivalry among exiting competitors- In health-care industry, there are so many companies
operating in the sector of health-care. Bupa is among the one. This is the force that is the major
determinant on how profitable and competitive the company is. Bupa is facing competition from
many health-care industries like NHS, ST. James Group and many others. There is competition
in price, advertisement battles and new products with improving quality and increasing customer
warranties.
Threat of New entrants- Threat of new entrants is low in the health-care industry. In
health-care, it is not easy to set the infrastructure of hospital. Potential entrants is the major
source of competitions in the industry but Bupa is the larger company so they to reach the level
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of Bupa. So, Bupa is not much concerned about the threat of new entrants (Betancourt and et.al.,
2016).
Further, there are some benefits that Bupa holds are as describe below-
Broad geographical reach- Bupa health care organisation has its operations in a large
number of hospitals in many countries which provide easy access to its services for the public.
This is the major advantage for the organisation in the competitive market.
Funding- Bupa is a public sector organisation and so, it is operated and owned by
government. The funding of Bupa comes direct from taxation. Government funding help Bupa to
develop and grow effectively to provide more satisfaction to customers (Zingg, and et.al., 2015).
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Illustration 2: Porter's Five Forces Model
(Source: Porter's Five Forces, 2017 )

TASK 3
1. Strategic drift of company.
Bupa is facing a drastic change in its strategic management, due to the changing
environment and trends in the market. It is very important for each and every company to modify
or develop new strategies to compete in the global and local market. It is also very essential for
company to mould the strategies as per the changes in environment. There are some factors, as
discuss above which influenced the decision making of company and all these factors have great
impact on the operations and management of Bupa.
2. Mission and Vision of Bupa
The National well-being administrations association built up with a noteworthy point or vision of
giving powerful medicinal services administrations to the general population and society. This
mission obviously expresses that the focal point of the association is to convey human services
administrations to the general population in the best route and to satisfy the necessities of the
patients. This mission of the association depends on association's inclination and structure. The
point of Bupa was to be a main association give the best social insurance benefits in numerous
territories of Malta. Mission isn't just an objective for the organization, the whole association, its
arrangements, structure, capacities and techniques depend on accomplishment of the mission
(Dietz and et.al., 2015). With a specific end goal to achieve this mission Bupa set up its healing
facilities and care focus in Malta and additionally numerous locales for effectively give
administrations to the general population. Bupa effectively built up an immense chain of
medicinal services focuses to take care of the demand of human services benefits in the market.
Notwithstanding this National well-being administrations association likewise have a dream to
be a most confided in human services specialist organization all around the globe which is
certifiably not a far objective for them. It has just accomplished the biggest open area association
in Malta.
Vision can be refereed as the future objective of an association, these objectives are the
key components or goals which can be accomplished from the constant advancement and
development of the business or association regarding its size, scale and nature of administrations.
The momentum commercial centre condition speaks to an appeal of the medicinal services
benefits because of increment in populace and ailment. The general population are more
presented to the medicinal services administrations, Bupa focus on the zones which need the care
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administrations (Rothaermel, 2015). The appeal affected Bupa to build up an immense number
of healing centres and care focus keeping in mind the end goal to take care of the developing
demand of the care administrations and furthermore ensure individuals shape hurtful infections.
3. Strategic Capabilities.
Centre competency show delineates guideline aptitudes of the firm.: Assets, Competitive
preferences and capacities. Resources accept some portion of building obstructs in the
workplace, on the bases of open resource key pioneers figure methodology and execute it at the
workplace. Regard including philosophy can be made exactly when associations have palatable
measure of benefits. These sponsorships in expanding extraordinary yield over its endeavours
and expanding upper hand. Resources of Bupa are cash related, inventive, physical, HR. Duty
and blend of each one of these advantages can support component in getting progress (Uplekar
and et.al., 2015). For executing methodology in human administration's territory Bupa is
required to have gifted staff people the people who have fantastic data about monetary
circumstance. Beside this substance needs enough funds with the objective that movements can
be made satisfactorily. These benefits can enhance limits of Bupa and restricting weakness as
well. Limits of the association can be portrayed as potential results of the firm to built and
overhaul its middle abilities. Limits are tricky in nature and is the imperative resources of the
firm. It the affiliation does not have abilities to utilize its advantages well then it may get fail to
make focus capacities. Focus competency model of key organization supports Bupa in raising
rules and constraining issues of the social protection affiliation.
Centre skills are within limits of the refereed to firm and helps the component in meeting
with its objective by make suitable frameworks and completing it into the workplace.
Progression of vital capacities are major for the advancement of claim to fame unit. Bupa is
determinedly endeavouring to overhaul capacities and learning of its staff people (Kash and
et.al., 2014). For that it is driving instructional gatherings for them with the objective that they
can turn out to be more familiar with about new headways, issues in restorative administrations
portion. These sponsorships them in working up their understanding and capacities and giving
quality care organizations to patients. Change of centre competency is possible by total learning
in the working environment. For that key pioneers perceive set of issues and in like way they
make frameworks with the objective that issues can be settled. Focus capacities of the business
are aptitudes, activities and aura of people towards work. Remembering the ultimate objective to
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raise learning capacities of the experts associations consistent endeavour to impact them with the
goal that they value their livelihoods and perform it well. Remembering the true objective to
drive them imperative pioneers of the firm gives them prizes and affirmation. That enable them
and they put their sincere endeavours to meet with the definitive target. Mechanical competency
is basic in the social protection part In the present time various drive advancements are being
used as a piece of recuperating offices. Usage of these pushed particular sorts of apparatus
reinforce the social protection relationship to give quality care organizations to patients and
upgrading their prosperity conditions (Frank, Glazer and McGuire, 2017).
4. Business Canvas Model.
KEY PARTNERS
Care quality
commission and the
department of
health
Development of
society and country.
VALUE
PROPOSITION
Health-care and better
treatment services to the
people.
CUSTOMER
SEGMENT
Customer from
every class.
Patents
suffering from
diseases.
KEY
RESOURCES
Financial resources,
human resources
and technological
resources.
COST
STRUCTURE
Technological cost,
infrastructure cost
and the highest
expenses of Bupa.
CUSTOMER
RELATIONSHIP
Health and trust-able
relationship.
DISTRIBUTION
CHANNEL
Hospital, dental
clinics and other
care centres.
KEY ACTIVITIES
Proving health care and treatment services to the
people.
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TASK 4
1. Strategies that Bupa can follow in order or to defend its core business.
Bupa can implement the concept of core competency in the market with other
organisation of health-care. Here are some strategies that help Bupa in enhancing its performance
in their service sector are as follows-
As per the idea of Bupa, its three elements that is capabilities, asserts and competitive
advantage. Organisation is reaching its goals enhancing all the orientations and its inside
qualities and abilities by getting new asserts, advancement and preparing and innovative
changes. They are continuously doing up-gradation in their learning and knowledge of their
workforce (Valentijn and et.al., 2015).
Competency advancement is acquired by multiple learning in the working environment.
It can only be achieved by enhancing the knowledge of learning inside the organisation. The
management of Bupa provides proper training and development programs to their employees so
that they can enhance their knowledge and skills. By giving proper training, they can
successfully enhance the quality, skills, performance, capacity and ability of workers of Bupa.
Idea of centre competency stated that Bupa needs to enhance its asserts. Asserts are one
of the powerful resource of an organisation. There are some essential asserts of Bupa which need
to be enhance is its fund, human, creative and innovative asserts and many others. For up-
gradation and enhancement, it is very essential to contribute fund from their capital. Bupa can
heighten its existing execution and suppress the difficulties in respect to poor customers
administrations and big rivalry. While Bupa negotiate three elements (abilities, asset and upper
hand) to perform in effective way.
Idea of centre competency sum-up that Bupa required highly talented workers inside the
organisation as because company can improve its centre competency only by talented
employees. Core competencies of Bupa are abilities, exercise and state of mind of individuals
towards their work. Employee's performance can be increase by the motivating them. They can
be motivate by giving prizes, recognise their achievements (Jacobs, Chase, and Lummus, 2014).
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TASK 5
1. Analyse and measure the resource implications of your recommendations that the Bupa has to
address.
Resources are the heart of businesses or company. In order to reach the goals and
objectives of company with high performance, Bupa needs to focus on its resources which are
very important for organisation. Bupa has many valuable resources that has great impact on the
company's performance. These resources lead to the achievement of goals of company.
Here are some resources which are valuable for Bupa is as follows-
Human Resources- This is the most effective resource of organisation as without
employee's, none of the work can be accomplish. They required effective training and
development to make them efficient and valuable for company. In health care, the most essential
resource is human resource.
Financial Resources- Fund is the most essential resource for Bupa. Each and every task
or work required fund at each level. Bupa has effective resources, it is very essential to optimum
utilization of resources.
Technological Resources- Today in the world of globalisation, customers are more
demanding so company has to walk as per the technological advancement. In order to develop
core competencies, technical resources are the most essential resources.
Physical resources- Machines, tools, equipments are the physical resources. In order to
develop core competencies it is very essential to have appropriate and well-conditioned physical
resources inside the organisation (Islam and et.al., 2015).
Recommendation
From the above discussion, it is recommended that in order to develop the core
competencies of Bupa, management of company should ensure that company's resources are
capable enough to compete in the market as well as prove the core competence in the market. It
is also very essential for the management of Bupa to make sure that resources which company
have should properly be utilized. Wastage of resources means loss to company.
CONCLUSION
From the above report, it was sum-up that strategic management plays a vital role in
operations and function of company. Strategic management can help company to compete as
well as gain competitive benefits in the market. Further, it is also concluded that Bupa is facing a
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drastic change in its strategic management, due to the changing environment and trends in the
market. It is very important for each and every company to modify or develop new strategies to
compete in the global and local market. Business canvas model is also understood in the above
assessment. Moreover, pestle analysis, porter five forces model for tracking the impact of
external environment is also done in the above assignment.
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Valentijn, P., Boesveld, I., van der Klauw, D., Ruwaard, D., Struijs, J., Molema, J., Bruijnzeels,
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healthcare-industry/>.
Porter's Five Forces Model. 2017. [Online]. Access through
<https://www.isc.hbs.edu/strategy/business-strategy/Pages/the-five-forces.aspx>.
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