Analyzing the External Environment: A PESTEL Analysis of TK Maxx

This report provides a PESTEL analysis of TK Maxx, examining the external factors influencing its business operations. The analysis covers political factors, such as government policies and their impact, including the effects of the COVID-19 pandemic on e-commerce and store closures. Economic factors, including the UK's GDP fluctuations and recession, are also discussed, alongside social factors like social distancing guidelines and their impact on businesses. The technological aspects, such as the company's online ordering system, and environmental considerations, like waste recycling, are also evaluated. Lastly, the report addresses the legal aspects, including adherence to government guidelines. The conclusion highlights the significance of the PESTEL analysis in understanding the opportunities and threats that affect the business's profitability.

External
environment
research and
analysis
portfolio

INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
PESTEL Analysis........................................................................................................................2
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4
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INTRODUCTION
External analysis means examining the business climate such as economic, financial,
political, social, demographic and technical indicators (Hagedoorn, Lokshin and Zobel, 2018).
The primary objective of an external review is to recognise opportunities and risks in a business
or any sector that will boost profitability, growth and uncertainty. TK Maxx Company is selected
which is subsidiary of home goods TJX Company and TK Maxx operated throughout UK,
Australia, Ireland, Germany etc. with approx. 515 stores in Europe. This report is based on the
PESTEL analysis and how the key drivers affect the organization and management decision.
MAIN BODY
PESTEL Analysis
Political: This factor includes the government policies which directly affect the
organization and its revenue margin, For example: In relation to TK Maxx Company, sudden
lockdown situation due to spread of Coronavirus lead to suspend e-commerce operations still
further notification (Hollingsworth and Rudik, 2019). TK Maxx stop taking online orders from
26th of March and if customers already placed order then organization will shipped their order
once they re-open their stores. This factor affects the entire industry and in month of April-May
fully shutdown situation cause several loss. In month of September-October when industries are
re-opening, organizations start working with safety guidelines.
Economic: Above discussed political factor affect entire world’s economy and most of the
people and businesses suffer from it. Due to lockdown condition, UK’s GDP drop by 20.4% in
April. UK’s economy paralyses in month of April that is the worst recession in past three
centuries. Current GDP of UK is around 6.6% and it has improved in comparison to month of
March and April which has worst condition due to lockdown.
Social: Due to COVID-19, government pass several guidelines which socially affect the
country such as, no one allowed to go outside their home except for essential things such food,
medicine etc. In month of April-May, there are very strict rules regarding social distancing,
quarantine people if they found any symptoms of COVID-19. Because of this, all the industries
or small business are closed which heavily affect the individual and businessmen through facing
huge loss and suffering a lot.
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Technology: This factor can positively as well as negatively affect the organizations. Such
as, in the presence of technology Advancement Company able to maximise their sales and the
absence of it company face several difficulty. Although, all the TK Maxx stores are remain
closed but shoppers can order clothing, skincare and beauty items online from April 30. It is the
advantage of having online order placing facility. This is the way, technology drive the
company’s revenue in positive way.
Environmental: This factor includes the clean environment inside the every outlet of TK
Maxx and they also recycle the waste material (Piterska, Lohinov and Lohinova, 2019). In
addition, due to lockdown situation production are closed which minimise the impact that harm
environmental. This period provide nature to heel them automatically.
Legal: In this factor, organizations follow the each and every legal aspect which required
following to fulfil its legal obligations. In relation to TK Maxx, company follow government
instruction regarding lockdown and after that they follow re-opening guidelines as well. Start
business operations with limited staff and along with all the safety measures and WHO
guidelines.
CONCLUSION
On the basis of above discussion it has been observed that PESTEL analysis affect the
organization and ensure about the potential opportunities and threats which can further affect the
business operations and profitability.
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REFERENCES
Books & Journals
Hagedoorn, J., Lokshin, B. and Zobel, A. K., 2018. Partner type diversity in alliance portfolios:
Multiple dimensions, boundary conditions and firm innovation performance. Journal of
Management Studies, 55(5), pp.809-836.
Hollingsworth, A. and Rudik, I., 2019. External impacts of local energy policy: The case of
renewable portfolio standards. Journal of the Association of Environmental and Resource
Economists, 6(1), pp.187-213.
Piterska, V., Lohinov, O. and Lohinova, L., 2019. Mechanism for forming an effective portfolio
of research projects of institution of higher education. Innovative technologies and
scientific solutions for industries, (3 (9)), pp.99-108.
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