Business Environment Analysis: PESTLE and SWOT Analysis of P&G and BBC

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Business and the Business Environment

Table of Contents
INTRODUCTION........................................................................................................................2
PART – 1................................................................................................................................... 3
PUBLIC, PRIVATE, AND VOLUNTARY SECTOR ORGANISATIONS AND THEIR DIFFERENCES
......................................................................................................................................... 3
INTERRELATIONSHIP BETWEEN FUNCTIONS AND ORGANISATIONAL CHART OF
RENAULT UK (DACIA UK)..................................................................................................5
PART – 2 REPORT......................................................................................................................8
INTRODUCTION................................................................................................................8
PESTLE ANALYSIS OF BBC AND P&G.................................................................................8
SWOT Analysis of P&G and BBC.....................................................................................11
Conclusion...................................................................................................................... 13
CONCLUSION.......................................................................................................................... 14
REFERENCE LIST......................................................................................................................15
1

INTRODUCTION
The external and internal factors that influence each other and through their interaction
organisation doing business, together constitute the Business Environment. The knowledge
about these factors and thereby the business environment is a necessary aspect of
preserving the business from their adverse impact (Pulver, 2012). The assignment explores
various aspects of the Business Environment and its influence on the businesses. The first
part of the assignment considers three different types of businesses/organisations that are
private, public and voluntary sector businesses and assesses their scope, size, stakeholders,
and legal structure to determine differences between them. The organisations being
considered to include private sector businesses Dacia UK and P&G along with public sector
organisation BBC. It also considers the various functions within Dacia UK and defines
functional interrelationship through its organisational structure. The second part of the
assignment is a report. It includes the SWOT and PESTLE analysis of Dacia UK and BBC and
determines the macro factors and their impact on these organisations and categorising
them as positive and negative. The SWOT analysis is used to determine the weaknesses and
strengths of these organisations their interrelationship with external macro factors. Lastly,
the report evaluates their influence on the decision making process.
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PART – 1
PUBLIC, PRIVATE, AND VOLUNTARY SECTOR ORGANISATIONS AND THEIR
DIFFERENCES
The organisations operating within the UK can be categorised by their respective economic
sector. The economic sectors are different aspects of the economy of a nation irrespective
of its demography. These economic sectors are Public, Private and Voluntary sectors
(Benington, 2011). Each of these sectors has a separate objective such as the private sector
focuses on generating profits; public sector is focused on providing services to the masses
and is influenced or controlled by the government; and the Voluntary sector is focused on
humanitarian efforts and bringing about positive changes within the communities that could
be local, global, or regional depending upon the scope of the organisations belonging to the
sector. Organisations on the basis of their respective sections are categorised as Private,
Voluntary and Public sector organisations (Benington, 2011).
Private Sector Organisations Public Sector Organisations Voluntary Sector Organisations
 These are privately owned
organisations.
 These are owned by
individuals or a group of
individuals.
 These organisations form a
major chunk of the
economy of a country like
the UK.
 The primary objective is
generating profits for their
owners/shareholders.
 Examples of such
organisations include P&G
and Dacia UK.
 These are owned or
controlled by the
government.
 The objective of these
organisations is to fulfil
the objectives that cannot
be completed or
undertaken by the
government departments.
 Their primary area of
operation includes Law
and Order, Defence,
Broadcasting, Health, and
Education.
 Examples of such
organisations include the
BBC and NHS
 These organisations could
be privately owned or
funded by the government
or private/public sector
organisations but remain
independent of private
and government influence.
 They have a singular
objective that's shared by
its members that are both
voluntary and paid.
 Their principal focus is the
creation of a social impact.
 Charities form the
majority of voluntary
sector organisations.
 Examples of such
organisations include
Cancer Research UK and
Oxfam.
Table 1: Overview ofPrivate, Public and Voluntary Sector organisations (Brinkman et al.,
2014)
The organisations chosen for the purpose of comparison include Dacia UK, P&G, and BBC.
Dacia UK and P&G are both private sector organisations whereas BBC is a Public sector
organisation. Dacia UK is the UK based part of the Romanian car manufacturer Automobile
Dacia S.A which is a subsidiary of French multinational Groupe Renault. Dacia UK is the
trading name of Renault UK Limited (Renault, 2017). P&G or the Procter & Gamble Company
is an American multinational that was founded in 1837 (P&G, 2019). BBC is a public service
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broadcaster based in the UK. It’s a statutory corporation that operates under the Royal
Charter (BBC, 2019).
Parameters Dacia UK (Renault UK
Limited)
Procter & Gamble Limited,
UK
BBC
Legal Structure  Private Limited
Company
 Privately owned
company
 Shares are
transferred
privately
 Not listed in the
Public
Market/Stock
Exchange
 Private Limited
Company
 Privately owned
company
 Shares are transferred
privately
 Not listed in the Public
Market/Stock
Exchange
 Royal Charter
company
 Statutory
Corporation
 Public Sector
Company
Products And
Services
New Cars and Light
Motor Vehicles.
Personal Care Products,
Personal Healthcare
Products, Cleaning Agents,
Diagnostics, and Beauty
Care Products
Broadcasting,
Television, Radio,
Online Media
Services, and Web
Portals
Size And Scope Global Global Global
Vision and
Mission
“Combining
connectivity,
autonomy and
electric energy,
Renault is working to
become, by 2020, one
of the first full-line
carmakers to launch
entirely safe road-
going autonomous
vehicles. Sustainable
and affordable,
tomorrow’s mobility
is being prepared
today.”
“We will provide branded
products and services of
superior quality and value
that improve the lives of
the world’s consumers,
now and for generations to
come. As a result,
consumers will reward us
with leadership sales, profit
and value creation,
allowing our people, our
shareholders and the
communities in which we
live and work to prosper.”
“The Mission of the
BBC is to act in the
public interest,
serving all audiences
through the
provision of
impartial, high-
quality and
distinctive output
and services which
inform, educate and
entertain.”
Key
Stakeholders
Employees, Board of
Directors, Customers,
Owners/Shareholders
, Suppliers, Investors
and Trade Unions.
Board of Directors,
Investors, Shareholders,
Customers, Employees,
Trade Unions, and
Suppliers.
Government,
Customers,
Employees,
Licensees, Board of
Directors, Trade
Unions, and Public.
Type Of
Organisational
Structure
Functional Product-Type Divisional
Organizational Structure
Functional
Table 2: Differences Between Private, Public and Voluntary Sector organisations (Renault,
2017) (P&G, 2019) (BBC, 2019).
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INTERRELATIONSHIP BETWEEN FUNCTIONS AND ORGANISATIONAL CHART OF
RENAULT UK (DACIA UK)
The Organisation being considered to determine its various functions and their
interrelationship is Renault UK Ltd or Dacia UK. The development and growth of an
organisation are dependent upon the effective cooperation and coordination its functions
hence the importance of the interrelationship of various functions of an organisation like
Renault UK. The functional organisational structure involves categorisation of the
organisation of the basis of different function that looks after a specific organisational
business operation (Cosh et al., 2012). The organisational functions of Renault UK/Dacia UK
are listed below.
Production Function
The production function looks after the production of the products offered by the
organisation. In the case of Dacia, its production function focuses on producing the different
car models sold by Dacia such as Logan. This function undertakes all the production
activities such as production planning, supervision and scheduling; workforce management
to ensure availability of sufficient manpower, maintenance activities to ensure the
effectiveness of production units, quality management, etc. The production function
coordinates with other functions to ensure timely delivery of finished goods (cars) (Vaccaro
al., 2012).
For example, the production and Research and Development function coordinate and
cooperate to design and develop new cars that are practical from the production view and
can be produced within the practical cost and production limitations. Production
coordinates with Purchase function to ensure the availability of necessary raw materials and
components to keep the production units operational. For the fulfilment of the equipment,
component, raw material requirements, Production, Purchase, and Finance functions
coordinate with each other while the Human Resource management function ensures that
any vacancy within the production function is timely fulfilled with trained human resources
(Cosh et al., 2012).
Human Resource Management Function
The Human Resource management function looks after the workforce of the Renault. It
undertakes activities like the Selection and recruitment to fill organisational vacancies;
training and development to ensure sufficient skill and knowledge level of employees;
Employee relations management; Conflict management and Grievances management;
Compliance of industrial, organisational and legislative regulatory framework, policies and
processes such as complying with Employment Law and Minimum Wages Regulation, etc.;
and the performance management of the employees. The Human Resource function at
Renault works towards creating a productive work environment where employee
motivation and performance levels are high and their individual objectives align with the
organisational objectives. To fulfil these responsibilities the Human Resource function works
in the coordination of other functions (Vaccaro al., 2012).
Research and Development Function
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The Research and Development (R&D) function plays a critical role in a manufacturing
company like Renault. For a company to survive and grow, especially in a highly competitive
automobile market, it needs to continuously improve upon its existing product line-up and
add new products to strengthen its product range. This need is fulfilled by an effective R&D
function that coordinates with marketing, production, finance, and purchase functions to
fulfil its responsibility of developing a new model and upgrade existing product models in a
manner that's practical to produce and cost-effective (Cosh et al., 2012).
Finance and Accounts
The Finance and Account function at Renault is responsible for activities like evaluation of
the financial performance of the organisation, bookkeeping, cash management that involves
management of cash inflow and outflow, keeping record of past performance and
comparing it with current performance and thereby predicting future organisational
financial performance, taking measures that ensure satisfactory financial performance. It
also ensures the availability of financial information that helps managers in their decision
making and planning process. It also ensures smooth operations of payroll management
through effective coordination with the Human Resource function (Vaccaro al., 2012).
Figure 1: The Organisation Chart of Renault
Purchase Function
The Purchase Function of Renault is responsible for the timely acquisition of services and
goods to fulfil organisational needs in a cost-effective manner. It coordinates with other
functions to determine their material needs such as the raw material and component
requirements of production function and fulfilling them. This function also explores various
suppliers to identify sources from which the organisational needs can be fulfilled in a timely
and cost-effective manner while ensuring the quality of the acquired goods and services
according to organisational standards (Cosh et al., 2012).
Marketing and Sales Function
6

The Marketing and Sales Function analyses the customer needs in a routine manner to
ensure that the products and services offered by Renault meet with customer expectation
by coordinating with other functions and furnishing them with this information. It also
works towards identifying new markets through various research activities while keeping
track of competitors and their strategies. This function designs, develops, and implements
the promotional activities to establish and strengthen various brands of the company. The
sales aspect of this function focuses on various activities that enhance product sales and
ensures delivery of products to the customer (Vaccaro al., 2012).
Customer Service Function
This function ensures that customers are satisfied with the Renault product and any issues
at the customer end are sorted out with alacrity. It coordinates with other functions to
ensure high customer satisfaction levels with timely resolution of their grievance and timely
delivery of after sales services (Cosh et al., 2012).
Figure 2: Graphic Representation of the Functional Organisational Structure of Renault
The interrelationship based on the coordination and cooperation of various organisational
functions of Renault listed above plays a significant role in the effectiveness, performance,
productivity, and profitability of the organisation. The synergy of these functions defines the
success and growth of the organisation while minimising wastage through duplication of
efforts and streamlining the efforts of the organisation.
The BBC being a broadcasting company will not have some of the above-described functions
such as production and some of its functions will be absent from both Renault and P&G such
as Content Development function. The functions within P&G are divided on the basis of
products hence its organisational structure will be product based and will differ greatly from
Renault. However the basic functions like marketing, finance, Human Resources, etc. will be
present in one form or another within both BBC and P&G (P&G, 2019) (BBC, 2019). The
interrelationship of various functions of P&G and BBC will differ from Renault owning to
different organisational structures and different needs of the functions (Vaccaro al., 2012).
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PART – 2 REPORT
INTRODUCTION
The report considers the positive and negative impacts of micro and macro factors on P&G
and BBC. The macro factors are determined through the PESTLE analysis of both the
organisations while the micro factors are identified through the SWOT analysis of both BBC
and P&G. The relationship between both micro and macro factors will be considered while
both negative and positive impacts of these factors will be determined. Lastly, their
influence on organisational decision making will be evaluated.
PESTLE ANALYSIS OF BBC AND P&G
The external or macro-environmental factors affect business significantly. Identification of
these factors and the nature of their influence help an organisation define its business
strategy. The PESTLE Analysis is a tool that helps in the determination of the impact of these
environmental factors on businesses. The factors considered during the PESTLE analysis are
Political, Economic, Socio-Cultural, Technological, Legal and Environmental factors. The
identification of external factors and their influence allows an organisation to prepare its
strategy in a manner that enhances the positive impact of these factors while
minimises/eliminates their negative influence. The PESTLE Analysis is being conducted on
two organisations Procter and Gamble and BBC (Dehtiarova, 2018).
POLITICAL FACTOR
The political factors are a major influence on the operation of the business since the
businesses operate under the legislative and regulatory framework defined by the
government of their respective areas of operation. The political factor becomes critical for
organisations that operate globally since they need to consider the political landscape and
changes of a number of different countries and a change in the political landscape of affects
its local operations that in turn impacts its global operations (Dehtiarova, 2018).
Procter and Gamble
P&G is a global player and hence it's affected by the political landscape of the countries
where it operates. The need for compliance with national legislation and regulations and its
dependence on the political climate of a country makes P&G susceptible to the political
factor. Currently, governments across the world are promoting globalisation and energy
efficiency. The support to globalisation presents an opportunity for the company through
which it can enhance its customer base by expanding to new markets. The governmental
support to promote energy efficiency is another opportunity that can allow the company to
exploit various benefits offered by the government on reducing the energy signature or the
carbon footprint of the company. Another opportunity as well as threat us the
governmental inclination towards promoting e-commerce. It's a threat due to the
emergence of new e-commerce players that either compete with the company or provides
opportunities to its competitors. It can be exploited by the company by enhancing its online
presence and benefiting from the increased reach within a market (Dehtiarova, 2018) (P&G,
2019).
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BBC
The BBC is a statutory organisation that operates under the Royal charter. Its activities are
self-regulated and independent though it's governed by a board chosen by the government.
Also, being a public sector organisation, it has defined public responsibilities and functions
as defined by the Royal Charter that's reviewed every 10 years. The UK government policies
influence the BBC more than other businesses due to its dependence on the government for
determining the board and defining its activities. Also, the licence fee paid by the
households is controlled by the government and it’s a significant source of revenue to the
BBC. BBC also faces the political machinations of the governments that don't have cordial
relations with the British government. In addition to this, the company is also susceptible to
the broadcast and media related policies of the governments wherever it operates. The
company benefits from the governmental support for competition and globalisation while
promotion for new technologies in broadcasting could be problematic to the company.
(O’Dwyer, 2014) (BBC, 2019).
ECONOMIC FACTORS
Procter and Gamble
The global nature of P&G makes it dependent on the economic climate of the regions it's
operating in. The presence of P&G in developing economies and their higher growth rate is
beneficial for the company. The growth rate of the company can be enhanced by enhancing
the penetration levels in the developing economies. The increasing purchase capacity of the
customers and the enhancement of the level of disposable income is also an opportunity for
the company that can be exploited by enhanced market penetration levels. The developed
economies have stabilised thereby enhancing the stability of the macro environment of the
P&G (Dehtiarova, 2018) (P&G, 2019).
BBC
The BBC also benefits from these factors. The increased economic stability and enhanced
disposable income benefits the BBC due to the dependability of its offered products and
services on the disposable income of the customers also, the enhanced economic stability of
developed economy of which the UK is one favours the BBC since a significant part of its
earning is dependent on the licence fees from the households regulated by the government.
The global presence of the BBC can be expanded to benefit from the increased growth rate
of the developing economies that can fuel the growth of the BBC. However, being a public
sector organisation the focus of BBC and its dependability on these factors is lower than a
private company like P&G (O’Dwyer, 2014) (BBC, 2019).
SOCIO-CULTURAL FACTORS
Socio-cultural environment and changes are a critical influence on the operations and
growth of both P&G and BBC. P&G can benefit from the enhanced inclination of the
populace towards high quality and healthy goods/products by focusing on products that are
expensive but assure high-quality levels and including health-oriented products in its
product portfolio (Dehtiarova, 2018) (P&G, 2019). The popular inclination towards using
online content and its symbolisation as a socio-cultural prerequisite can benefit the BBC by
focusing on its web-based contents and online streaming products. The gradual decrease of
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the populace towards the news related content can be a threat to the BBC along with the
decreasing rate of population growth in the developed countries which is a threat to P&G as
well. This threat can be substantiated by shifting the focus on the developing countries to
compensate for the long term loss of customer base from the developed countries
(O’Dwyer, 2014) (BBC, 2019).
TECHNOLOGICAL FACTORS
The changing technological landscape and the emergence of various new technologies along
with the expanded reach of internet connectivity have a significant influence on both P&G
and BBC (Dehtiarova, 2018) (P&G, 2019). BBC being a company that deals in digital media
have needed to assimilate the relevant technological advancements in order to sustain the
competition and overcome it. The dependence on the royal charter and the government in
defining its objectives and financial focus affects its ability to move at a pace in which its
competitors are moving. Hence the technological advancements have emerged as a threat
to the BBC. However, the enhanced internet connectivity is a boon to the BBC since it has
allowed the company to enhance its penetration in various markets. Also, the higher level of
connectivity has facilitated its new business (O’Dwyer, 2014) (BBC, 2019). The technological
advancements like rapidly increasing online market, automation, enhanced fuel efficiency
has been an opportunity for the P&G that can be exploited to grow at a faster pace
(Dehtiarova, 2018) (P&G, 2019).
LEGAL FACTORS
Procter and Gamble
Various legal factors influence the functioning of the company and the long-term
organisational strategies. There's an increase in the regulatory framework related to the
product safety, environmental protection, and sustainability of the business. Enhancing the
product safety standards will enhance the product quality and thereby enhance the
organisational brand image while the environmental protection regulation can impact the
component and raw material availability. Also, the business sustainability regulations call for
practices that come under environmental protection, and corporate social responsibility
that can lead to ease of business in their area of operations due to favourable locale while
impacting the profitability levels to enhanced expenses in this regard (Dehtiarova, 2018)
(P&G, 2019).
BBC
The BBC being a Royal Charter Company is bound by the directions of the charter and the
government. Its dependence on the government is a major influence on its decision making
and strategizing. The changes within the UK such as BREXIT influence the BBC to a greater
extent due to its close association with the government. Also, the changes brought about in
the Royal Charter at the time of renewal are another potential threat to the company that
may cause a shift in existing business strategies of the company (O’Dwyer, 2014) (BBC,
2019).
ENVIRONMENTAL/ECOLOGICAL FACTORS
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The growing awareness of the environment has affected many a business. The enhanced
public resistance to the conversion of forest into plantations has emerged as a threat to the
P&G since the company utilises many a component that requires plantation such as palm oil
plantation (Dehtiarova, 2018) (P&G, 2019). Also, the changes in weather patterns have
affected the farming that's the source of many a component of P&G products such as oils,
soaps, and detergents. An opportunity for the P&G and BBC both is the enhanced
availability of recyclable material that allows the company to reduce its carbon footprint
and gain from being a green company. BBC already employs a number of environment-
friendly measures such as energy-conserving lighting, centralised waste management and
recycling, etc. This factors into the branding practices of the company that benefit from the
green practices that are favoured by the masses nowadays (O’Dwyer, 2014) (BBC, 2019).
SWOT Analysis of P&G and BBC
Procter and Gamble – SWOT Analysis
Strength Weaknesses
 Brand Equity – P&G owns a number of
strong and valuable brands such as
Gillette, Ariel, Tide, Pampers, and Olay. It
benefits from being a parent brand of high
valuations brands.
 Economies of Scale – The Company’s un-
scalable cost expenditure is distributed
among its various brands that share
warehousing, manufacturing, distribution
thereby bringing down overall
expenditure.
 Global Presence – Its presence in over 180
countries and a strong and varied product
line containing 65 brands that have their
separate product line contributes to the
strength of the company.
 Strong Distribution – P&G employs a
strong and effective distribution channel
that allows its access to areas irrespective
of the location being urban or rural,
physical or online.
 Effective R&D – The R&D function of the
P&G is highly active and effective. It’s
responsible for introducing a number of
products that were tremendous successes.
 Higher gross profit Margin – The higher
profit margin allows the company to invest
in R&D and marketing thereby
strengthening its brand positioning and
overall sales.
 Reduced Brand Portfolio – The number
of brands under portfolio has reduced to
65 from 300. This resulted in a loss of
investment in developing the removed
or sold 235 brands.
 Inability to match the changing market
trends and requirements – This problem
is especially visible in the personal care
and beauty product range of the
company that’s a fast moving sector and
requires regular new products and
varieties to compete successfully with
other players.
 Lower rate of Market penetration – The
rate of accessing new markets or
otherwise enhancing the customer base
has slowed down. Also, due to various
changes taking place within the brand
line-up and streamlining processes the
R&D has suffered resulting in lack of
new innovations.
 Slow Decision making – The
organisational structure is a cause of the
slow decision-making process of the
company. It's again affected by the need
for managing a number of brands and
portfolios.
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