Business Environment: PESTLE, SWOT, and Porter's Five Forces for NHS

This report provides a detailed analysis of the business environment surrounding the National Health Service (NHS). It begins with an introduction to the NHS, followed by a PESTLE analysis examining the political, economic, social, technological, environmental, and legal factors impacting the organization. The report then presents a SWOT analysis, outlining the NHS's strengths, weaknesses, opportunities, and threats. Further, the report applies Porter's Five Forces framework to assess the competitive forces within the NHS's industry, including the threat of new entrants, the bargaining power of suppliers and customers, the intensity of rivalry, and the threat of substitute products. The conclusion summarizes the key findings, emphasizing the importance of understanding the dynamic business environment for the NHS's strategic decision-making and operational success. The report incorporates external and internal factors impacting the NHS's operations and strategic goals.

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BUSINESS ENVIRONMENT
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Table of Contents
INTRODUCTION.....................................................................................................................................2
PESTLE ANALYSIS...................................................................................................................................2
SWOT ANALYSIS.....................................................................................................................................4
Impact of business environment on NHS..............................................................................................5
CONCLUSION.........................................................................................................................................7
Bibliography...........................................................................................................................................8

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INTRODUCTION
National Health Service (NHS) is an organisation that looks after health and social care. It is a health
care system funded by public (Rooney, 2016). This report shall discuss about the PESTEL analysis of
NHS and understand the impacts on business operation. It shall further describe the SWOT analysis
of National Health Service. Further, it shall discuss about Porter’s Five Forces. This report shall help
in understanding the impact, importance and dealings by a company in order to excel with a brand
name in the market.
PESTLE ANALYSIS
The PESTLE analysis of National Health Service provides an idea of the things that harm the company
and also things that benefit the company as a whole.
Political
The country’s political environment has an impact over operations of NHS. Some of the key areas
that are being affected relating to political environment of NHS are as mentioned below:-
 NHS and the government’s rules and regulations do not go hand -in –hand. The government
makes the payment of certain treatments and generally their rates do not co-exist with the
actual rates of NHS (Prajogo, 2016).
 The NHS managers are not able to concentrate on strategies of long term because of the
continuous change in governmental environment. Whenever the other party comes into
power they change the rules and regulations which in turn disturb the policies set up by the
previous government.
Impact: The political environment has a negative influence on NHS to a great extent and the
managers have been facing stress with the continuous changes in political environment (Prajogo,
2016)
Economic
The money movement from one organisation to another causes modification in the economic
environment. Some of the changes faced by NHS are as mentioned below:-

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 The NHS requires efficient and qualified staffs which in turn increases cost of labour which
makes it difficult in spending the amount leading to cut on the other expenses (Leslie &
Webster, 2018)
 The proper procurement and service delivery will help more patients to be treated in lesser
tenure which will eventually lead to reduction in wastage.
Impact: The economic environment leads to increase or decrease the profits of NHS so the changes
required has to be made accordingly.
Social
There are some changes that are required to be made in NHS due to social environment as
mentioned below:-
 The NHS has to give attention to the increase in number of aging people in the country. They
require more services related to health care which leads to increase in capacity of hospitals.
 It has to be located in nearby locality so the people can reach it easily in case of emergency
(Khout, et al., 2016)
Impact: The impact of social environment will be such that it shall lead to changes in the amount of
patients and staff.
Technological
Technology has been a boon at NHS and it shall implement it to move ahead in the era of
competition. Some factors are mentioned below:-
 The surgical equipment’s are outdated quickly so they have to be changed as per the
technology.
 The patients visiting hospitals shall be tracked via computer so that it could be retrieved
later on (Prajogo, 2016)
Impact: The technology shall help the hospitals in treatment of patients and in storage of data for a
time being of NHS.
Environment
It is the responsibility of the company to contribute to the environment in which it has been
working. Some of the impacts have been mentioned below:
 NHS has been planting trees in the campus areas and locality to provide a strong
environment for the patients and also the people who are located in local limits of the
hospital.

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 It uses equipment’s that cause no harm to the environment
Impact: The NHS takes care of the environment so the diseases relating to environment could be
avoided. (Wijngaarden, et al., 2012)
Legal Environment
The legal environment plays a prominent role in the goodwill of the company. The more legal issues
faced by the company the more market stability of the company goes down. Some of the issues
relating to legal environment are mentioned below:-
 The quality issues laid down by the government has to be followed by the company. The
quality standards are made for the safety of the patients in the hospitals.
 The accounts have to be maintained by NHS on yearly basis as government keeps a record of
the taxes paid by the company and their yearly income.
Impact: The legal issues play an important part for a company. The ignorance of legal issue
may even turn out to the closure of NHS.
SWOT ANALYSIS
Strength: There is no competition present for the NHS in the market. There are many hospitals in
UK but the accident and emergency services of NHS has goodwill of its own. There is also endless
waiting list of demand for supply of NHS services. Its expansion has been a talking point since its
establishment in 1948 and is known to be at the top in terms of growth and expansion (Banks, 2018).
Weakness: NHS has been facing issues relating to adjustment with the high demands due to
increase in population. In case of employees, there is less recognition of individual performance and
overtime addictions. There has been an issue relating to payments of specialists and generalists
(Prajogo, 2016).
Opportunities: NHS uses its marketing strategies to standardise the profiles. It builds performance
culture rather than expectations. There has been growth in management-employees relationship
which leads to better work culture and productivity. There has been business strategies followed like
cash prizes, overtime payments and churn to boost up the morale of employees. There has also been
off the shelf solutions for employee retention purposes. There are different rewards in different
types of work done. It has been affected by the work of its contractors (Wijngaarden, et al., 2012).

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There is a need for clarity of behaviours accepted like there has to be a co-existence between quality
and speed. There has also been an issue with long term vision of NHS.
THREATS
NHS image has been affected by the work of its contractors. There is a need for clarity of behaviours
accepted like there has to be a co-existence between quality and speed. There has also been an
issue with long term vision of NHS (Waterson, 2014).
Impact of business environment on NHS
Porter’s five forces will be used to analyse the internal and external factors that has an impact on
business objectives and decision making (Juha & Niemelä, 2018)Porter’s five forces identify factors
that play an important part in the industry. Internal and external environment has an effect over
NHS business. Internal environment consist of employees and management and external
environment consists of political, social, economic, technological factors.
Presence of rivals -Low
This force embarks about the number of competitors present in the market. Nuffield Health has been
one of the top competitors of NHS. The price cuts and effective marketing technique has helped NHS
to lead from its competitors in the market. The more there will be rivals the lesser chances of
company to make a name. NHS has not been facing a threat on competition as there have been a
number of policies to look after the market rivals. The NHS has low impact on its business objectives
due to low ability of competitors to match up the unbeatable quality service (Leslie & Webster,
2018).
Prospective new entrants -Low
This force depicts that demand and fulfilment of demand can change the dimension of an
organization. The more there will be a chances of improvement required the more there will be a
chance for new entrants. There has also been a threat of growing population which may not be
under the capacity of NHS. There is a presence of lot of capital and formalities which make it difficult
to enter this dimension of market. The potential entrants do not have any influence over the
business objectives of NHS as there is a strong foundation of NHS with a global image (Waterson,
2014)
Potential of suppliers -High

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This force depicts the bargaining power of supplier as it is the asset of the company. NHS is known to
have solid relations with the supplier around the world due to its purchasing power and quality
services. There has been a limited supplier with whom NHS has been dealing. This has a strong
fundamental impact over NHS’s decision making of the business as the supplier may increase the
charges leading to influence the ability of business to expand and diversify. (Banks, 2018)
Competence of customers - Medium
This force depicts the company’s performance. NHS has a strong hold over its customers due to
supply of its advanced and efficient services. It has good cliental factors which increases its market
share. The clients of NHS are huge in number. Customer switching from services will have an impact
on the business; therefore it looks after the satisfaction of its clients specifically (Vaspe, 2017).
Threat of substitute product -Medium
This force depicts the importance of uniqueness in services and its benefits. One negative factor can
destroy everything achieved so far. Nuffield Health has been the top competitors of NHS; its services
can somewhere be a threat to NHS. The external factor has a medium impact on the substitution of
the product. The more easy and cheap substitution shall possess a threat. However NHS has formed
such a business strategies that help it to cope up in the market.

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CONCLUSION
After the brief study of NHS PESTEL analysis, it can be concluded that political, environmental, social,
technological, and legal environment plays an important role for NHS. The SWOT analysis depicts
that the strengths of NHS is its clients trust in the company and the level of quality of services it
provides is unmatchable The weakness or strengths of NHS is its competitors and the lack of
capacity to deal with the increase in number of its clients. The Porter’s Five Forces discusses the
present rivals of NHS like Nuffield Health plays and important role in threat of competition. It maintains
a good relation with its suppliers and it plays an important part in its goodwill. It can be concluded that
NHS has a strong foundation in the market which help it as an opportunity against others.

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Bibliography
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involved. European Journal of Surgical Oncology, 42(5), p. 14.
Leslie, H. & Webster, P., 2018. The international business environment. Oxford: Oxford University
Press.
Prajogo, D., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics, 171(2), pp. 241-249.
Rooney, L., 2016. An introduction to the Digital agenda and plans for implementation. [Online]
Available at: https://doi.org/10.17868/65658
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Vaspe, A., 2017. Psychoanalysis, the NHS, and mental health work today.. London: Karnac Books.
Waterson, P., 2014. Health information technology and sociotechnical systems: A progress report on
recent developments within the UK National Health Service. Applied ergonomics, 45(2), pp. 150-161.
Wijngaarden, V., Scholten, G. & Wijk, v., 2012. Strategic analysis for health care organizations: the
suitability of the SWOT analysis.‐ The International journal of health planning and management,,
27(1), pp. 34-49.