Report: Analyzing the Business Environment of Aviva Plc

This report provides a comprehensive analysis of Aviva Plc's business environment, focusing on its organizational structure, history, and governance. It delves into Aviva's mission, vision, and values, as well as its hierarchical organizational structure. The report also examines how the company is ...Read More

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
2.1Organisation structure, history and governance................................................................1
2.2History...............................................................................................................................2
2.3 Organizational Structure...................................................................................................2
3 How company governed......................................................................................................3
3.1 Stakeholders.....................................................................................................................3
TASK 2............................................................................................................................................4
A- Purpose, importance and impact of PESTLE analysis......................................................4
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment refers to composition of all the external and internal words which
affects the overall functioning of a business. These factors include owners, competitors,
government, market and people working in the organisation. The chosen company for this report
is Aviva Plc which is one of the most largest insurance company in United Kingdom and offer
various services to their customers. The present report will determine the governance and
organisational structure of Aviva along with its introduction, their mission, vision, goals and
values. Further more, the type of organisational structure, definition and organisational chart and
it is being managed will be described in this study. In the present report, how the company is
governed will be explained. Report also described different external environment which affect
company's overall performance by using PESTLE analysis and why the model is used which is
also describe in this present study.
TASK 1
2.1Organisation structure, history and governance
AVIVA overview: It is a public listed company in an insurance industry serving in 16
countries with 33 million consumers. It is the largest insurance provider with pensions in United
Kingdom. Aviva's main aim is to provide developing cash and profits. The company is British
international company whose headquartered is in United Kingdom (Ahmed, 2016). Company
offers its insurance services to their customers and also provide them a leading life by providing
pensions.
Mission of Aviva is to grow long-term business savings profitably and aggressively.
Their aim is to build proper and best business of fund management. To have top-five positions in
markets and to take a step back from markets which are not generating super returns. They are
helpful to people in preparing them for biggest challenges of life are mission of Aviva.
Aviva is the largest insurance company of UK dealing with 15 million consumers of the
country. They offer huge range of savings and insurance products which includes health, car and
home insurance and investments and pensions. Helping people to fight against life's challenges
can be said as Aviva's strongest advantage.
Vision: Company's vision is to provide a healthy and leading life to those families as well
as societies and people of all ages group. Providing best customer service is their vision and to
expand their current business at global level (Bah and Fang, 2015).
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Values: Aviva Plc has its unique values and this are mentioned as below:
 Relationship
 Integrity
 best customer service.
2.2History
Established in 1696 with merger of two British insurance firms, Norwich Union and
CGU. Aviva's name was adopted in July 2002. Since 1696, Aviva is focussing on needs of
consumers and providing them best service possible. In June 2009, company was formally
known as Aviva in UK this was supported by advertising campaign for promotion of rebranding.
After this, the company made its focus on commercial insurance sector to acquire larger share of
market (Barba and et.al., 2016). The company spread the message of insurance done with the
help of insurance brokers in campaign. The main activities of Aviva can be described as
provision of savings products, general and life insurance and better management of funds in the
country.
2.3 Organizational Structure
Aviva Plc followed Hierarchical structure under which the organization follows the layout of
pyramid. This layout consist of many multiple entities and all the work is assigned to each and
every individual of the company. Through this every individual can easily recognised their own
responsibilities and they gain many opportunities for promotion as well as motivate the
employees for their well performance (Belás and et.al., 2015). The company follows this
structure in order to promote the developing employees as a specialist so that employees become
experts in their specific field.
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3 How company governed
Aviva Plc governed through strong system and also ensures that the business is run in
smooth way or not. They also aid effective decision making and support the achievements of the
objectives. Mark Wilson is the CEO of the Aviva PLC and he was appointed on 1 January, 2013
and Adrian Montague is the chairman of the company while Thomas Stoddard is the director of
and Andrew Briggs is the CEO of UK insurance. There are 4 executive and 7 non executive
directors in the board of meetings of the company.
3.1 Stakeholders
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 (Camisón and Villar-López, 2014). Not all stakeholders are equal and
even the negative impact upon the stakeholders is when the company needs to cut the cost and
plans a around of lay-off. The relationship with the board of directors with the employees is as
followed:
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Ill
ustration 1: Aviva PLC Org. Chart
(Source: Aviva PLC Org. Chart, 2018)

With employees: The relationship between board of directors and the employees of
Aviva PLC is quite strong such that as the company earns good profit then they easily pay bonus
and offer different schemes for their employees so that they will do work in more effective way.
During occasions, the company also offer bonus and extra incentives which help them to
enhances their skills as well as by taking reviews and feedback from them then it will help board
of directors to take better action as per the needs. The board of directors also offer variety of
schemes to their employees in order to enhances their capabilities as well as skills so that they
will further helps to raise the production level of the company.
with shareholders: Board of directors also have relationship with the stakeholders such
that it will help them to increases the profit margin of the company and further it will also help to
raise the performance of the company (Coppin, 2017). BOD also share the prices and profit from
the last many years which the company earn. They also share some financial broke down which
further help to take better action as per the requirements. Through shareholders the company also
come to know the actual position and they further take different action in order to achieve their
all defined goals and objectives.
with Public: The CSR policy of the company is also focus on trust and transparency,
attracting and retaining talent and even its overall CSR policy also includes that the company
recognises as one of the top five global organization in FTSE 4 Good index, silver in the Dow
Jones Sustainability Index RobecoSAM Yearbook. Further it also ranked 32nd in the global
Stonewall equality index and reduces Aviva's carbon foot print up to 12 percent on the relative
basis (CSR of Aviva, 2018). The company also perform many street program which includes Save
the Children and the UN with the awareness through its advocacy and some marketing activity.
Their program main aim is to provide the importance of education to young people and offer
them education. In addition to this, Aviva also offer a unique report on the rights of children who
are working and living in the street and also welcomed them by the UN Human Rights Council
in March, 2012.
TASK 2
A- Purpose, importance and impact of PESTLE analysis
PESTLE analysis is a tool used by marketers to analyse and monitor the external factors
of business which have a direct impact on working and functioning of the business. These factors
are uncontrollable for marketers but influences the business in positive and negative manner.
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These includes political, economical, social, technological, legal and environmental factors
which surrounds the business.
Purpose- PESTLE analysis is important for a business as it helps the marketing manager
to identify and understand numerous external factors which affects the company. The advantages
for doing PESTLE analysis- it provides alertness to threats and techniques for exploiting various
opportunities which are beneficial for organisation and being cost effective. PESTLE analysis of
Aviva are as follows-
Political factors- Aviva Plc is functioning in many countries in the field of Insurance
provider and is affected by political environment. The success achieved by Aviva is gained after
analysing the effects and complete political environment. Factors of political environment which
affects Aviva are- corruption, regulations for pricing decisions, taxation rules, regulation for
trade and tariffs (Deasy and et.al., 2016). These changes in government and their rules and
regulations can affect the functioning of Aviva as changes can be favourable and unfavourable. It
can be favourable as good and friendly relations with governing body will generate more
advantages and simply procedures of taxation, trade and tariffs and will increase contacts with
trading individuals which can prove to be beneficial for working of the business. These can be
unfavourable because changes in government procedures will make complex and difficult for
proper working of companies in market. All these complications will decrease the efficiency of
Aviva and its market image will be affected. Changes in government procedures will put
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Illustration 2: PESTLE analysis
(Source: PESTLE analysis, 2018)

pressure on company and employees to change their working styles which will hamper their
efficiency and productivity level.
Economic factors- These factors consists of foreign rates, savings rates, inflation rates
and interest rates which determine the economic cycle and demands of the markets. These factors
also includes education level, unemployment rate, government intervention, economic growth
rate and skills of people working in Aviva (Dioun and Haveman, 2017). The increase and
decrease in all these factors will cause an impact on economic working of the company. Increase
in inflation rates will reduce the overall costs of the firm and will influence the marketing image
of company. Changes in labour costs will affect the working efficiency of business and its
success will go down. Factors like protectionism in insurance in economies of some countries
will slow down market growth rate. These economic factors have an impact on Aviva's
operations as exchange rates will affect costs of exported and imported goods. The interest rates
will determine cost of capital needed by Aviva for future expansion and growth of the firm.
Social factors- Demographic and cultural traits of a society in which Aviva is operating
comes under social factors. These factors include population, career attributes, age distribution ,
health and safety awareness of people of that country. These creates an impact on Aviva by
decreasing insurance penetration in economies which are developing. Demands for pension of
old age will affect developing markets of greater potential. The changing attitudes and beliefs of
people regarding Aviva will influence their market image and this will further affect the overall
success of company (Espenlaub, Goyal and Mohamed, 2016). Social factors also includes ethical
issues and cultural attributes of public towards Aviva and this will have an impact on brand
image of the company. Media also plays an important role in influencing choices and preferences
of consumers towards Aviva. This consumer beliefs and preferences will help Aviva to design its
marketing plan for attracting a particular group of people by understanding their needs and
preferences.
Technological factors- Technologies are developing and changing at a very fast rates and
people are also changing themselves according to these changes and are becoming habitual with
use of these new technology and techniques. Because of these new technology, older
technologies are outdated and left behind. These changes will include changes and up gradation
of research and development activity of Aviva and brings innovation in the company. Non up
gradation of these technological changes in company will not overcome the competitors in
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market. Technological changes for Aviva will involve use of online mobile services to improve
customer experiences and up gradation in areas of techniques. Aviva can improve its profits
margins by measuring impacts of technology developments by their competitors and effect in
insurance industry by impact on cost structure (Fozer and et.al., 2017). This will generate new
ways and methods of communication with targeted group of market which will enhance Aviva's
success. Technological development will improve the ways of producing and distributing goods
and services offered by Aviva to consumers. This will include various schemes and giving
benefits to consumers so that they engage themselves with Aviva.
Environmental factors- The ecological and environmental factors which affects demand
of a consumer for a company's product. This includes rules and regulations for environment
pollution and air and water regulations in insurance industry. Climatic change and weather
change influence the behaviour and choices of consumers. This involves management of wastes
in financial sectors, attitudes and support of people in renewable energy which causes an impact
on productivity of Aviva (Tan, Yuan and Yoong, 2015). Changes in choices and behaviour
patterns of consumers will decrease engagement of customers with the firm. This will have an
impact on Aviva's corporate image and decrease in company's success with reduction in chances
of expansion. Marketer of Aviva faces problems of environmental factors which includes
decreasing availability of raw materials required by the company.
Legal factors- These factors includes laws, legislations and regulations which affect the
operations of a business. This will include factors like tax regulations, employment law,
consumer protection and health and safety regulations. All these factors will determine the legal
position of a company (Goryakin and et.al., 2015). According to this, functioning of Aviva
should be legal in eyes of laws, this will help in gaining trust of employees and increasing its
success from which more chances of expansion can be generated. Proper analysis of these legal
factors will help Aviva to accept these changes and overcome them precisely. Accepting of these
changes with greater efficiency will improve performance level of every employee working in
Aviva and further development of company and generating more profits for the company.
Analysing legal factors will determine the working of Aviva which will lay stress on protecting
the rights of consumers and providing more benefits to them. Providing of beneficial schemes to
customers will attract more number of customers and will enhance the productivity of Aviva.
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PESTLE analysis will help Aviva in finding more new opportunities of markets for
growth and development. Also, threats of markets, impacts of which will hamper the functioning
and working of Aviva are determined before and policies and plans for future working with
coping up these threats will be framed. This will help managers of Aviva to make changes in
organisation accordingly and through which impacts can be observed better.
CONCLUSION
By summing up above report it has been concluded that business environment plays an
effective role in Aviva PLC. The company offered their best service to their customers and as a
result the company is regarded as one of the best leading company in United Kingdom. The
company follows the hierarchical structure and as a result, the company also manage its work
nationally. Report also describe the stakeholders of Aviva Plc and also shows the relationship
with Board of Directors with employees as well as stakeholders. Report also concluded that
company's overall performance can be affected by the its external environment and by using
PESTLE analysis, these all factors are easily determined such as political, economical,
environmental, social and legal factors.
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REFERENCES
Books and Journals
Ahmed, A., 2016. The challenge of implementing integrated environmental management within
an organisation structure: the case of the environmental section at Drakenstein
Municipality (Doctoral dissertation, Stellenbosch: Stellenbosch University).
Bah, E. H. and Fang, L., 2015. Impact of the business environment on output and productivity in
Africa. Journal of Development Economics.114.pp.159-171.
Barba, F. C., and et.al., 2016. A technical evaluation, performance analysis and risk assessment
of multiple novel oxy-turbine power cycles with complete CO2 capture. Journal of
cleaner production.133. pp.971-985.
Belás, J., and et.al., 2015. The business environment of small and medium-sized enterprises in
selected regions of the Czech Republic and Slovakia. E+ M Ekonomie a Management.
Camisón, C. and Villar-López, A., 2014. Organizational innovation as an enabler of
technological innovation capabilities and firm performance. Journal of business
research.67(1).pp.2891-2902.
Coppin, A., 2017. Organisation Structure and Design. In The Human Capital Imperative (pp. 45-
49). Palgrave Macmillan, Cham.
Deasy, S., and et.al., 2016.Controlling use of a business environment on a mobile device. U.S.
Patent 9,247,042.
Dioun, C. and Haveman, H., 2017. Pricing Conflict: Legal Regimes, Uncertainty, and Price in
Medical Marijuana Markets. In Academy of Management Proceedings (Vol. 2017, No.
1, p. 17381). Briarcliff Manor, NY 10510: Academy of Management.
Espenlaub, S., Goyal, A. and Mohamed, A., 2016. Impact of legal institutions on IPO survival: A
global perspective. Journal of Financial Stability.25. pp.98-112.
Fozer, D., and et.al., 2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS
process alternatives. Journal of Cleaner Production.147. pp.75-85.
Goryakin, Y., and et.al., 2015. The impact of economic, political and social globalization on
overweight and obesity in the 56 low and middle income countries. Social Science &
Medicine.133.pp.67-76.
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Tan, K. G., Yuan, R. and Yoong, S. W. C., 2015. Organisation, Structure and Methodology.
In 2014 Annual Provincial and Regional Competitiveness Analysis for Greater China
Economies: Development Strategies under the New Normal(pp. 1-7).
Online
CSR of Aviva. 2018. [Online] Available through: <http://www.ethicalcorp.com/aviva-2012-
corporate-responsibility-report>.
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