Pestle Analysis and Business Development

This assignment involves conducting a Pestle analysis to understand the UK retail e-commerce market. The student is required to analyze the political, economic, social, technological, legal, and environmental factors affecting the industry. Additionally, they must consider the impact of three key sectors: retail, healthcare, and education on the economy and population. A reflective statement is also provided, highlighting the importance of Pestle analysis for new businesses and understanding the strengths and weaknesses of various frameworks.

The Structure Of Business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
PESTLE Analysis, factors considered to start an online business and factors which impact the
success of new online business start-up.......................................................................................1
Strengths and Weaknesses of various legal frameworks and ways of funding for new online
business start-up...........................................................................................................................3
Three sectors within which online business will operate, difference between three sectors, two
HR policies & their importance...................................................................................................6
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
APPENDICES...............................................................................................................................14

INTRODUCTION
eBay is a multinational e-commerce company whose headquarters is in San Jose,
California, United State. It was founded by Pierre Omidyar in year 1995. Today it is one of the
popular company in Internet Industry. It provides its customers online shopping services (Schell,
2018).
Present report will highlight the pestle analysis of the organization. It will also discuss the
factors which need to be consider while opening new online business and also those factors
which may impact the success of the new venture. It will tell about the strengths and weaknesses
of various legal frameworks and ways of funding for new online business. It will identify the
three sectors and their importance. It will also describe the importance of 2 HR policies to the
modern workplace.
TASK
PESTLE Analysis, factors considered to start an online business and factors which impact the
success of new online business start-up
PESTLE ANALYSIS OF EBAY
Pestle analysis of eBay are as follows -
Political Factors
There are various political factors which can be affect the financial performance of eBay.
These factors are political stability, taxation policy, corruption level etc. UK government is
supporting e-commerce which is beneficial for the company to expand its business in UK. In
UK, EU imposes heavy e-commerce tax which impact the profitability of eBay. UK government
impose the tax on the profit which is arisen in the UK which lead company to pay heavy income
tax (Murphy, 2017).
Economic Factors
There are various economic factors which may impact the operations and profitability of
the company. These factors are pricing of services, interest rates, inflation rates, exchange rates
etc. eBay provide buying selling facilities to their customers which lead buyers to save their
money and buy the required products and services at low price which is beneficial for the
company. Due to international business, eBay has to exposed to fluctuation in exchange rate
which impact its profitability.
Socio-Cultural Factors
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There are various factors which is related to the social factors. These factors are
customers' behaviour, their perceptions, their demand pattern and their needs & wants etc. When
there are a lot of complaints from the customers regarding their products and services from
sellers, this lead company to create feedback forum which is customers oriented. This lead
company's market shares to be increased. Due to different culture in different countries, people's
buying and selling patterns are different which lead company to face so many social issues (Zhu,
and et.al., 2015).
Technological Factors
There are various technological factors which impact the business of eBay. There are
rising in number of mobile user which lead company to create mobile friendly app for the
customers so that number of customers can be increase for the company. Due to technological
advancement, customers of company are facing internet privacy and security related issues such
as leakage, misusing, trading and hacking of personal data etc. This lead company to face loss of
loyal customers.
Legal Factors
There are various legal factors which are as follows – commercial law, environmental
law, health and safety law, consumers related law and employment law etc. (Klagge, Martin and
Sunley, 2017). There are various discrimination law which is imposed by UK government in
order to provide safety and security to the employees of the company regarding some
characteristics which help company to create and maintain its employer brand image. There are
various laws and regulations which banned customers from using eBay. This lead company to
face reduction in its profitability.
Environmental Factors
This factors consist of various factors such as change in environment trend, change in
weather, change in climate, water, soil, land, pollution level etc. These factors consists of
environmental factors. eBay are now focusing on trading of green products which attract the
customers (Meijerink, Bondarouk and Lepak, 2016).
FACTORS CONSIDERED TO START NEW ONLINE BUSINESS START – UP
There are various factors which is needed to be considered before starting a new online
business. These factors are as follows -
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New business should focus on the rules, regulations, law which is imposed by the UK
government on e-commerce business so that company can run its business smoothly without
facing any kind of legal actions and legal issues.
Before starting new venture, company should prepare and develop business plan in which
every aspects of business such as budget, sources of funds, analysis of company, analysis of
competitors, marketing plan and strategies etc. must be included so that company can determine
its feasibility and directions towards its goals (Donate, Peña and Sanchez de Pablo, 2016).
FACTORS THAT MAY IMPACT THE SUCCESS OF NEW ONLINE BUSINESS
START – UP
There are various factors which impact the success of new online business start up. These
factors are as follows -
If company is able to hire right talent for the correct job will increase the success and
enhances the efficiency of the business.
If company is able to understand and follow all the legal requirements, this will company
to gain support from its various stakeholders which enhance the company's success and
goodwill.
If company is able to manage its team effectively with effective communication ie
effectively listening, effectively speaking and correct interpretation etc. This will increase the co-
ordination and enhance the success for new business (Noe and et.al. 2017).
Strengths and Weaknesses of various legal frameworks and ways of funding for new online
business start-up
STRENGTHS AND WEAKNESSES OF VARIOUS LEGAL FRAMEWORKS
VARIOUS LEGAL
FRAMEWORKS
MEANING STRENGTHS WEAKNESSES
GDPR Framework It refers to the General
Data Protection
Regulation which is a
legal framework. It
deals with the
guidelines for the
company to
Due to this framework
follow by the
company, customers
know that their data
are safe and company
won't misuse the data
which increase the
If company is not able
to maintain, protect
and manage its data.
This will lead
company to pay heavy
penalty.
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maintaining and
processing with the
personal data of the
customers (Choe,
2016).
trust and confidence of
customers and
stakeholders on the
company. In return,
company get loyal
customers and
stakeholders.
Due to proper data
maintenance, it helps
company to take fast
and effective decisions
on the basis of analysis
of data.
This framework is
applied to whole world
which means every
countries' GDPR
framework is different
which lead company to
bear lots of cost as per
the requirements.
Consumer Right
Framework
It is also a legal
framework which is
governed for the
company. It deals with
the protection of
consumers rights
regarding products,
purchasing, standards
and pricing.
Following of this
framework, new
company is able to
attract its customers
towards its business,
products and services
which enhance the
goodwill for the
company.
It also helps business
to understand different
customer right
protection acts which
is different in different
countries. This will
help business to run its
company at the
international and
If any customer does
complaint against new
company. This will
lead to raise question
on the credibility of
new company and this
negatively impact the
goodwill of the
company.
No authority has the
right to punish in case
new company does
violence of any of
customers protection
rights act under this
framework
(Chatzoglou and
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national level
smoothly without any
customers related
issues.
Chatzoudes, 2016).
STRENGTHS AND WEAKNESSES OF VARIOUS WAYS OF FUNDING
VARIOUS WAYS
OF FUNDING
MEANING STRENGTHS WEAKNESSES
Angel Investment It is also known as
business angel,
informal investor,
private investor, seed
investor or angel
funder. It refers to the
wealthy investors who
provide their
investment in new
start up business in
exchange of equities
of the company
(Zhang and Wen,
2017).
With the providing of
funds, they also
provide new company
a network, expertise
and knowledge which
is beneficial for the
new company to
operate the business
under a guideline way.
Another benefit of this
source of fund is that
company don't need to
pay any monthly fees
to their angel investors
which lead new
businessman to focus
on its operations.
In this source of fund,
new business has to
give their equities to
the investors which
lead their control on
the business and this
lead investors to do so
much intervene in the
business.
Venture Capital It is considered to be
most important source
of fund for the new
business. Venture
capital refers to the
If new businessman
needs more fund for
the business, it is easy
for them to gain more
funds through venture
Securing a Venture
Capital deal can be a
difficult due to heavy
accounting and legal
costs (Zeng and et.al.
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source of fund in
which the investors
who are going to
invest in new business
has experiences in the
same business as they
already has work in
the same industry
where new business is
working.
capitalists. 2017).
Three sectors within which online business will operate, difference between three sectors, two
HR policies & their importance
IDENTIFICATION OF THREE SECTORS
New online business has identified three sectors in which they are operating its business.
These three sectors are as follows -
Retail Sector
Healthcare Sector
Education Sector (Han, Yoo and Jeon, 2015)
DIFFERENCES BETWEEN CHOSEN THREE SECTORS
Basis Retail Sector Healthcare Sector Education Sector
Meaning Retail is the process of
selling goods and
services to the
customers by various
channels in order to
earn profitability.
Healthcare is the
process of
maintenance and
improvement of health
by providing various
medical facilities.
Education is the
process of providing
resources and facilities
to in order to learn or
gain knowledge
regarding skills, values
and subjects matter.
Provider Retail facilities is
providing by various
units such as retailers,
Healthcare facilities is
providing by various
units such as hospitals,
Education facilities is
providing by various
units such as schools,
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whole-sellers and
various stores such as
shops, malls, street
stores etc.
health care agents,
doctors, nurses,
surgeons and
physicians etc.
colleges, universities,
coaching, teachers,
principles and tutors
etc.
Focus It mainly focuses on
the various needs and
wants of the customers
which is fulfilled by
various kinds of goods
and services.
It mainly focuses on
the health and its
related needs of the
patients.
It mainly focuses on
the education level,
living standards, living
quality and career of
the children and adults
who are studying.
Examples of
companies who are
working
Examples of e-
commerce companies
who are working in
this sector are
Amazon, Flip-kart,
Myntra, eBay and
Nykaa etc (Laudon
and Traver, 2016).
Examples of e-
commerce companies
who are working in
this sector are
Healthkart,
Shophealthy, Dietkart,
HealthAdda and
Homeshop18 etc.
Examples of e-
commerce companies
who are working in
this sector are Flip-
kart, Snapdeal,
Groupon and Byju's
etc.
Products and services
provided by
companies who are
working under these
sectors
There are various
products and services
provided by
companies working
under this industry are
as follows – foods,
clothing, footwear,
cosmetics, medicines,
stationery, households
items, fast moving
customers goods,
electronics goods,
There are various
products and services
provided by
companies working
under this industry are
as follows –
medicines, various
hospital tools,
consultation facilities,
nursing and doctors'
experiences, online
appointments and
There are various
products and services
provided by
companies working
under this industry are
as follows – e-books,
books, copies,
registers, notes,
videos, online
classroom facilities
and online training
programs etc (Huang
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furniture, sporting
goods, appliances
goods, automobile
goods, art galleries,
musical instruments
and gifts items etc.
online reports facilities
etc.
and et.al. 2018.
THEIR (3 CHOSEN SECTORS) VALUE TO THE UK ECONOMY
Retail Sector
Internet shopping is most popular in the UK which lead e-commerce retail industry to be
popular in UK most. And this is increasing due to increase in demand and craze of customers in
UK towards e-shopping. This lead consumers of e-commerce retail sector has acquired almost
25% of whole retail sector in UK.
In year 2018, consumers spend on online retail increased by 14.9% and the spending
amount is to be around £96 billion approximately. There are major impact of m-retail on online
retail due to increase in the number of mobile user.
From the above graph, it can be said that e-commerce retail sales are continuously
increasing and the stability in the industry is increasing. In year 2017, the total sales of e-
commerce retail was £83.55 billion which is expected to be increased by £132.61 billion till year
2022 (UK Retail and E-commerce, 2018).
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(Illustration 1: UK Retail E commerce Sales
Source: UK Retail and E-commerce, 2018)

For UK economy, online retail industry or sector is important because it acts as an
indicator of economy which is driving by customers needs, wants and spending. Higher the
customers spending on retail goods and services, higher the flow of money in the economy
which boost the GDP of economy and growth of economy is happened.
Education Sector
Online education in the UK is emerging sector which is increasing its market share in
education sector. Due to increasing craze of online education and its role in UK economy,
Government of UK invested £100 million in online education sector in order to develop its
brand, required resources and better distance learning programs in order to provide better online
facilities to the students, teachers and professors (Laudon and Traver, 2016).
Also, in UK online training for technical and vocational education are increasing because
providers provide it low and cheap price rather than schools/universities who provide same
courses.
UK education sector is very important. There are compulsory for the children to gain
education till the age of 16 years. In UK education system, not only education is important but
also extra circular activities plays an important part. Because government of UK believes that
providing various cultural, entertainment and educational activities make students active and
creative which is beneficial for their career as well as their future life.
Due to importance of education in building future of nation, government spends billions
in education system in order to provide high quality education and learning facilities with
improvement in education level.
Healthcare Sector
It is the oldest and widest industry in UK. Also, the healthcare system in UK are
considered to be the best healthcare system in the world.
UK healthcare system focuses on the 5 area such as - quality, efficiency, access to care,
equity and healthy lives. Also, whole UK healthcare system is handle by NHS.
Due to digital and internet era, every thing in business are speeding up. It not only impact
the retail industry but also impact the other industries in which one of the foremost industry is
Healthcare industry (Klagge, Martin and Sunley, 2017).
The importance of online healthcare sector on UK economy is amazing. It reduces the
limitations of non-online health care services. Due to internet and online business, many people
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are getting quick care from doctors at less time. Also, the delivery of service quality also impact
positively the UK health system. This lead to improve the health service quality and system of
the UK. Health of people are also improve.
TWO HR POLICIES AND THEIR IMPORTANCE IN THE CONTEXT OF NEW
ONLINE BUSINESS
There are two HR policies which is important for the online business to frame and follow.
These 2 HR policies are as follows -
Health And Safety Policy
It is a document that contains information regarding health and safety in the company. It
includes training staffing regarding prevention of health in premises and what to do in case of
emergency to protect oneself from getting accident. This policy contains insurance regarding
health and safety for future of an employee. It consists of three separate parts
Such as Health and safety Policy of Intent, Organization of health and safety and Arrangements
for health and safety. It is important to make this policy for giving proper precautions to
employees in the company. It also ensures that safe system is to implemented so that it will not
affect the health of employees (Zhu and et.al., 2015).
Human resources are the vital part of the business and thus their safety and well being is
also an integral element of the human resource management. Online Organization must provide
safe and secure environment to the employees so that they can work without any stress and
divergence factor. Further failure to implement health and safety policy can also cause injuries to
the employees. Such accidents or the injuries will not only influence the continuity of the
operations but will also have an adverse impact on the brand value of business.
It is important for the online business because it provides their employees safe and good
working environment where every employees are safe and healthy. In case any employee
become illness at workplace, this policy guide company to deal with it.
Equality And Diversity Policy
This policy states that each and every employee in the organization will be treated
equally and there is no discrimination between them based on gender, race, belief, disability or
religion. It is important to maintain equality between the employees so that they will get
motivated to do work effectively and efficiently. Therefore, this policy is to be made in
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companies so that employee do not feel alone and engage with its work. This policy helps in
providing comfortable environment at workplace to employees (Murphy, 2017).
For the effective management of human resources it is very essential that online business
must employ equality and diversity policy within organizational structure. It is the responsibility
and liability of the business organization that all employees must be treated with equality and
their dignity must be protected. Since different staff members may belong to different culture
and backgrounds there must not be any discrimination on the basis of diversity. If online
organization does not treat human resources with equality then it can demotivate human
resources and their performance can also be affected in the negative manner. The failure to
implement equality policy can also lead to legal troubles for organization as the violation of
equality laws.
It is important for the online business to follow policy so that company cannot pricing of
the products on the basis of various characteristics of customers whether they are rich or poor
(Schell, 2018).
CONCLUSION
From the above study, it has been summarized that business structure plays an important
role in the success of organisation. It is not always necessary that business structure helps
organisation to become success. Pestle analysis plays an important role for any kind of
organisation whether it is existing company or it is new company. It is important for new
company to analysis the factors so that company can adopt the strategies accordingly in order to
reduce the negative impact of external factors on business activities. There are various legal
frameworks which impact on company negatively and positively. Also, there are various sources
through which company cam raise funds. There are various sectors in which digitalization and
online business can be done. This will impact the economy of the country as well. HR policies
play an important role in any organisation because it helps company to follow a systematic way
to run its business and behave with its employees, customers and stakeholders.
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REFERENCES
Books and Journals
Chatzoglou, P. and Chatzoudes, D., 2016. Factors affecting e-business adoption in SMEs: an
empirical research. Journal of Enterprise Information Management. 29(3). pp.327-358.
Choe, J.M., 2016. The Benefits in the Adoption of Proper Forms of E-Commerce and the
Moderating Effects of E-Commerce Capabilities. Korean Management Science
Review. 33(1). pp.17-33.
Donate, M.J., Peña, I. and Sanchez de Pablo, J.D., 2016. HRM practices for human and social
capital development: effects on innovation capabilities. The International Journal of
Human Resource Management. 27(9). pp.928-953.
Han, T., Yoo, B. and Jeon, S., 2015. Building a Korean fashion platform in Taobao, China's
biggest online commerce: The case of fashion e-commerce company Accommate.
Huang, Y. and et.al. 2018. Efficient business process consolidation: combining topic features
with structure matching. Soft Computing. 22(2). pp.645-657.
Klagge, B., Martin, R. and Sunley, P., 2017. The spatial structure of the financial system and the
funding of regional business: a comparison of Britain and Germany. Handbook on the
Geographies of Money and Finance. pp.125-155.
Laudon, K.C. and Traver, C.G., 2016. E-commerce: business, technology, society.
Laudon, K.C. and Traver, C.G., 2016. E-commerce: business, technology, society.
Meijerink, J.G., Bondarouk, T. and Lepak, D.P., 2016. Employees as active consumers of HRM:
Linking employees’ HRM competences with their perceptions of HRM service
value. Human resource management. 55(2). pp.219-240.
Murphy, R.E., 2017. The central business district: a study in urban geography. Routledge.
Noe, R.A. and et.al. 2017. Human resource management: Gaining a competitive advantage.
New York, NY: McGraw-Hill Education.
Schell, J.M., 2018. Private equity funds: Business structure and operations. Law Journal Press.
Zeng, Y. and et.al. 2017. E-commerce in agri-food sector: a systematic literature
review. International Food and Agribusiness Management Review. 20(4). pp.439-460.
Zhang, Y. and Wen, J., 2017. The IoT electric business model: Using blockchain technology for
the internet of things. Peer-to-Peer Networking and Applications. 10(4). pp.983-994.
Zhu, Z. and et.al., 2015. Leveraging e-business process for business value: A layered structure
perspective. Information & Management. 52(6). pp.679-691.
Online
UK Retail and E-commerce. 2018. [ONLINE]. Availeble through:<
https://www.emarketer.com/content/uk-retail-and-ecommerce-2018>
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APPENDICES
Reflective Statement
I found that Pestle analysis helps company to know about the industry trends and
conditions in a particular country. This also helps company to know about the various factors
which may impact the business in different level. Also, for the new company, it is important to
do pestle analysis so that accordingly company can enter into the industry.
I can elucidate that there are various legal frameworks which is different in the different
countries. Thus, it is very important for any company to know about these frameworks in order
to know about the extent of the impact on the business activities. Thus, it is necessary for the
company to know about the strengths and weaknesses of these frameworks. Also, to start a new
business, businessman needs funds which can be raise through various sources. Thus, it is
necessary to know details about the sources so that company can raise funds through an
appropriate source.
I can interpret that three chosen sectors such as retail, healthcare and education plays an
important role in economy of country. These three sectors are directly link to the populations of
country and focuses on their needs, wants and lives which is very important for any country's
economic development. HR policies is important because it is done for the beneficial of any
companies' employees, customers and stakeholders.
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