Free Essay

Pestel Analysis

In: Business and Management

Submitted By dbuley
Words 650
Pages 3
AICD Company Directors Course

Assignment

Case Study 1: Traveltime Global Limited (TGL)

Part 2

|External Risks - PESTEL |
|Political |US is a stable political environment |
| |We already do business in the US and understand the legal, tax etc regime |
| |Sunbelt suffered a severe downturn post 9/11 and took 3 years to recover – potential for similar |
| |impact from future terrorist activity |
|Economic |US economy has stalled and expected to remain flat for some time |
| |Travel industry suffering downturn – potentially depressed holiday revenues |
| |Already seeing slowing in property sales (and 80% sales at TV are domestic) |
| |International sales are currently declining (from 20%) - weakening US$ may encourage some |
| |regrowth |
| |Insurance premiums in hurricane prone districts have risen since Katrina and likely to continue |
| |to rise |
|Social |Ageing population in the US and traditional attractiveness of Florida as retirement destination |
| |mean there is a growing population of potential buyers/visitors (however see also environmental |
| |risk) |
| |Orlando is well established as both a retirement and vacation destination – with proximity to |
| |attractions such as Disneyland |
| |Global anti-US sentiment still relatively high (20% TV sales from off shore) |
|Environmental |TV district is prone to storms – likely to cause further construction delays and ongoing |
| |rectification costs |
| |Risk that perception that storm activity signals an area impacted by climate change/global |
| |warming will reduce Orlando’s perceived attractiveness as a long term destination and so depress |
| |consumers willingness to buy |
| |Risk that consumers will be unwilling to visit due to perceived risk of bad weather/storms |
|Legal |Exposure to long tail property development legal claims risks (not a part of the ‘main’ business |
| |portfolio) |
|Internal Risks |
|Capability |TGL has limited experience in most of the capabilities required for the ongoing development of |
| |TV. |
|Capability |Core to TGL? |Current performance |Overall assessment |
|Property development |( |Behind schedule due to weather delays | |
| | |Spec change to higher cost units | |
|Property ownership |( | | |
|Property mgt |( | | |
|Resort operations |( |High LTIFR and 15% staff turnover suggest operational | |
| | |issues | |
|Real estate selling |( |Behind schedule due to weather delays | |
|Vacation selling |( | |Strong |
|Financial |The balance of the project is considered to contain financial risk as a result of: |
| |significant capital expenditure ($240M) still being required; |
| |the US economy is at risk of slipping into deep recession as a result of the sub-prime crisis; |
| |equity and debt is difficult to raise; |
| |when equity and debt can be raised it is costly to do so; |
| |a gluten of property is on the market due to wide spread foreclosures. |
| |cash flow / earnings risk. If |
| |completion (construction) of the remaining works is delayed; |
| |sales are delayed; and/or |
| |forecast sale prices aren’t achieved; |
| |could put significant pressure on the group cash flows / earnings. |
| |Compression of the construction program to make up lost time due to weather could result in the |
| |quality of the work diminishing result in additional provision being required for warranty |
| |claims. |
| |Opportunity cost of distraction from core business other better performing opportunities |
|Competitive Advantage |The appears to be little competitive advantage derived from the investment of TV. |
| |Current returns from the business are less than the rest of the business. Hockey stick future |
| |forecast returns. |
|Operational |LTIFR of 22 and rising. Considered high |
| |Staff turnover high at 15% |
|Synergies / Value |The project is not seen as synergistic. If anything it has the potential to distract management |
|Proposition |from the core business. This is of particular relevance if thing don’t go well. Already the |
| |project is behind schedule in a market where property sales and the US economy generally are |
| |contracting rapidly. |

Capability assessment

Recommendation

Sell TV, and use the resulting proceeds to pay down debt and build a war chest that can be used to fund further acquisitions in the core business. We anticipate that with the slowing travel market, there will be distressed sales coming to market and some may prove attractive for TGL.

Key Points

External economic environment has changed

High opportunity cost…...

Similar Documents

Premium Essay

Pestel Analysis

...1 Macro-environmental analysis (PESTE-analysis) A company which wants to enter into a new market must first understand the target market’s business environment and how to create and retain customers by providing better value than the competition. As the environment changes, businesses must adapt in order to maintain strategic fit between their capabilities and the marketplace. When we are analyzing the macro environment of a company we usually use the PESTE analysis to help us to clear our goal, identify all the factors which are affecting our company directly or indirectly. Such us political factors, economic factors, social factors, technological factors, environmental factors and legal factors. Political factors. Political factors can influence marketing decisions by determining the rules by which business can be conducted. The relationship between government and business organizations can have major implications not only for the respective parties, but also other companies (Jobber 2004: 146) When we are talking about political factors we have to take in mind the trading policies. Finland’s general trade policy emphasized dismantling barriers to trade and investment and participation in an open world economy. The key challenges include customs duties and nontariff barriers to trade and trade distorting measures that are still prevalent in many markets. Finnish Competition Authority is an organization to protect sound and effective economic competition and to......

Words: 2680 - Pages: 11

Premium Essay

Pestel Analysis

...2.3. PEST ANALYSIS POLITICAL/ LEGAL ENVIROMENT Government and RBI policies affect the banking sector. Sometimes looking into the political advantage of a particular party, the Government declares some measures to their benefits like waiver of short-term agricultural loans, to attract the farmer’s votes. By doing so the profits of the bank get affected. Various banks in the cooperative sector are open and run by the politicians. They exploit these banks for their benefits. Sometimes the government appoints various chairmen of the banks. Various policies are framed by the RBI looking at the present situation of the country for better control over the banks ECONOMICAL ENVIROMENT Banking is as old as authentic history and the modern commercial banking are traceable to ancient times. In India, banking has existed in one form or the other from time to time. The present era in banking may be taken to have commenced with establishment of bank of Bengal in 1809 under the government charter and with government participation in share capital. Allahabad bank was started in the year 1865 and Punjab national bank in 1895, and thus, others followed Every year RBI declares its 6 monthly policy and accordingly the various measures and rates are implemented which has an impact on the banking sector. Also the Union budget affects the banking sector to boost the economy by giving certain concessions or facilities. If in the Budget savings are encouraged, then more deposits will be......

Words: 813 - Pages: 4

Premium Essay

Pestel Analysis

...These factors are usually classified into two groups (Bourgeois, 1980) i.e. ‘‘general’’ and ‘‘task’’ external business environmental factors. • Micro Environment (General External Business Environment ) The Micro environment is a relatively remote environment and the elements that compose it have an indirect influence on the organization. This environment is typically composed of factors such as social values, educational, political, economic, legal, behavioral, demographic, natural environment, natural resources, and technological (Asheghian & Ebrahimi, 1990; Grant, 1999). A PESTEL analysis is a framework or tool used by marketers to analyze and monitor the macro-environmental (external marketing environment) factors that have an impact on an organization. The result of which is used to identify threats and weaknesses which is used in a SWOT analysis. PESTEL ANALYSIS of Australia stands for: Political : The political atmostphere of Australia is stable and the country enjoys a democratic structure based on English common law. Capitalist venture are welcome and encouraged.the queensland area is a major hub of development,and the government is involved in ensuring that safty and growth of its people and environment are protected and supported. The area of gold coast is particularly fabled,as it features surfing,nightlife,fine dining, and access to natural areas of the surround region (gold coast city council,2011)Any business venture in this region......

Words: 849 - Pages: 4

Premium Essay

Pestel Analysis

...factors are usually classified into two groups (Bourgeois, 1980) i.e. ‘‘general’’ and ‘‘task’’ external business environmental factors. • Micro Environment (General External Business Environment ) The Micro environment is a relatively remote environment and the elements that compose it have an indirect influence on the organization. This environment is typically composed of factors such as social values, educational, political, economic, legal, behavioral, demographic, natural environment, natural resources, and technological (Asheghian & Ebrahimi, 1990; Grant, 1999). A PESTEL analysis is a framework or tool used by marketers to analyze and monitor the macro-environmental (external marketing environment) factors that have an impact on an organization. The result of which is used to identify threats and weaknesses which is used in a SWOT analysis. PESTEL ANALYSIS of Australia stands for: Political : The political atmostphere of Australia is stable and the country enjoys a democratic structure based on English common law. Capitalist venture are welcome and encouraged.the queensland area is a major hub of development,and the government is involved in ensuring that safty and growth of its people and environment are protected and supported. The area of gold coast is particularly fabled,as it features surfing,nightlife,fine dining, and access to natural areas of the surround region (gold coast city council,2011)Any business venture in this region would......

Words: 844 - Pages: 4

Free Essay

Pestel Analysis

...To: Harold Bashor From: Swarna Sub: PESTEL Analysis on Auto Mobile Industry Date: 04/06/2014 Business Brief The auto industry is a leading driver of global economic growth; the industry is a leading employer throughout the world, with 9 million people involved in making 60 million vehicles, or 5% of global manufacturing jobs. Indirect employment from automotive activity is fivefold, representing 50 million jobs connected indirectly to the auto industry. Other industries involved in the manufacture and service of vehicles include textiles, plastics, iron, steel, glass, aluminum, computer chips and rubber. The industry also involves significant research and development activity, representing investment of nearly $85 billion. It is estimated that the manufacture of vehicles contributes more than $430 billion to the governments of 26 countries combined. Automobile are primarily used to transportation and changed the world during 20th century particular in developed nations like USA and other developing nations like India, China markets. The automobile industry has succeeded like never before in the recent years but also seen major setback in global recession. This extraordinary growth that the automobile industry has witnessed is a result of a three major factors namely, increased average income of a per person, life style and innovation. Moreover in countries like India the liberalization steps, such as, relaxation of the foreign exchange and equity regulation,......

Words: 1981 - Pages: 8

Free Essay

Pestel Analysis

...PESTEL Analysis Political Factors: Political factors greatly affect the automotive industry. President Obama has recently announced new efforts to further fuel efficiency standards for medium and heavy duty trucks. This category ranges from large pickup trucks and school buses to the massive 18 –wheeler tractors. The new standard is expected to increase fuel efficiency between 9% and 23% with the largest trucks receiving the largest reductions (23%). This standard will be applied to 2014 – 2018 models and estimates $50 billion in savings for truck users in fuel over the lifetime of the vehicle. The new greenhouse gas standards will become final by March 2016 (Eilperin, 2014). Another long term plan was introduced by the White House states agreements were made between the president and 13 automakers to increase fuel efficiency to 54.5 miles per gallon for cars and light trucks. This plan is expected to be fulfilled by year 2025. A list of the automakers is as follows, Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota, and Volvo. Combined these companies account for 90% of vehicles sold in US. Achievement of both plans (most formerly mentioned) estimates that consumers will save $1.7 trillion at the pump or $8K per vehicle. Disposable income, and in turn, economic growth is expected to increase and create quality domestic jobs within cutting edge industries across the country. Additionally, these standards also reduce......

Words: 2746 - Pages: 11

Premium Essay

Westpac Pestel Analysis+Recommendation

...1. Westpac PESTEL analysis 1. Political and Legal analysis There are huge amounts of regulations and laws supervising the banking system in Australia. In this paper, we focus on one important and famous regulation: ‘four pillars’ policy. Basically, the ‘four pillar’ is a specific Australian policy to maintain the separation of ‘big four’ banks including Westpac and to prevent any merge and acquisition among these four banks (1997) .In terms of the report from both TUNSTALL (2007) and The Age (2006), the main objective of the policy is to keep the competition of the banking industry. Such the policy is a threat to the Westpac because the increasing competition will lead to shrinking interest margin definitely. And the profit channel such as making loans in domestic market will be in tough condition. While the ‘four pillar’ policy is also a big opportunity for Westpac due to the fact Australian banks were force to borrow offshore under the policy based on the speech of Macfarlane (2009). Additionally, according to the analysis released by IMF (2012), ‘Australia has limited foreign bank presence’. Therefore, it’s a big opportunity for Westpac to build up foreign presence to join the international banks and adsorb the cheaper foreign capital. 1. 2 Social and Economic analysis After the GFC, based on BBC many important economic entities cut their interest rate with the quantity easing policy issued by US, including Australia, to stimulate the domestic......

Words: 750 - Pages: 3

Premium Essay

Pestel Analysis

...1. Conduct a PESTEL analysis of China 1.1 Political Analysis China is well-known as one of only five communist nations left in the world, which determined its socialistic ideology and government are different from most countries all over the world. As claimed, china is an investment-welcomed nation since joined WTO in 2001. Leaders of China are also trying to build an open and comfortable environment to foreign investment. The influx of Foreign Direct Investment in China is increasing steady from 2007 and China has been the second largest nation of accepting FDI. (see Exhibit below) Wine has always been seen as a luxurious good in domestic market, so wine importation got a strict duty policy as duty of 14%, add-value tax of 17% and consumption tax of 10%. However, as more and more competition in international trade market, New Zealand has got zero-duty privilege in wine importation industry from China government, followed by Chile and Australia, who will get zero-duty privilege in 2015 and 2019 respectively. Although Chinese politics is stable relatively, there still are some issues like crime and corruption. In 2013, Xi Jinping took power from Hu Jingtao as present president of China and paid more attention to those issues in period of social transition. 1.2 Economic Analysis China’s economy had seen a rapid growth in these years, which was benefit from decreasing intervention and increasing market oriented. The first 20 years in 21 century are very......

Words: 530 - Pages: 3

Premium Essay

Pestel Analysis

...You have to do a SWOT and PESTLE analysis of the company given to you. * Please use the latest data from company website, annual reports, industry reports, news articles, etc. * The data points/facts mentioned should be latest - not older than Jan 2013. * 2 samples have been provided for reference of format, data presentation and kind of research expected. Please do not copy anything from the samples. * The sources need to be authentic and valid: * Wikipedia is not an authentic source * Anonymous Blogs/Academic sites/Student essays published online are not considered good sources. Avoid them. * You must have references for all your facts and data with proper intext. * Do not copy from existing SWOT /PESTLE analysis found on web. Please do your own research and analysis * Each data point/fact should properly referenced with the exact source. For e.g. If you say The net profit margin increased from 15.2% in FY14, the source of the information needs to be mentioned with a footnote inserted mentioning the webpage/pdf/source link. It will be checked. * Plagiarism should be strictly avoided * Try to use infograms/bullet points/smart art to highlight gists and summaries. They lend more readability to any article and are a great tool for quick surfing or browsing. * You will get a lot of useful and current information by analysing the annual reports of the organization under concern. Most of them are freely......

Words: 784 - Pages: 4

Premium Essay

Pestel Analysis

...r﷽﷽﷽﷽﷽﷽﷽﷽﷽﷽﷽﷽﷽﷽﷽﷽﷽﷽ section 8) e peak at 119.1 in January 2014 - Wyrzykowska, E. sYNOsed in only USA from 18% to 21%.n custoxc | | PESTLE ANALYSIS FOR POLAND I- Political factors 1. Government stability and likely changes Poland’s political landscape has evolved into a stable democracy since the fall of communism in the country. Its strong foreign policy assures it political and economic security. Ever since the setting up of a democratic framework, various governments of Poland have undertaken initiatives to privatize companies in several industries. The government is in the process of privatizing numerous financial institutions, as well as companies in the power, chemical, and petroleum sectors. The privatization of companies is one among many measures the government is taking to reduce its budget deficit. However, Poland’s political and bureaucratic systems face widespread corruption, which has been a barrier to foreign investment. 2. Tax policy The Polish tax system is comprehensive and tightly regulated. Any taxpayers conducting a business activity in Poland may be subject to the following taxes: All taxes are imposed entirely based on Acts passed by the Polish Parliament, which means that taxes cannot be imposed based on decrees issued by the Ministry of Finance or any other authority. This ensures the certainty of law and protects taxpayers from unpredictable changes in legislation. Additionally, in case of uncertainties regarding the......

Words: 2206 - Pages: 9

Premium Essay

Pestel Analysis

...PESTEL analysis 2.1 Political McDonald industry deal with different kinds of political problems as they have outlets over 119 countries. Certain location the company deals with problems like overwriting rules and regulations due to health implications of fast food. Political situations in Singapore are not problematic for McDonald as it requires to monitor the rules and regulations which is handling fine. In general, McDonalds are affected due to regulations of fast food industries set by the government policy for example health consciousness and cleanliness policy. Health problem have been a main concern for most people. people are having diseases such as high cholesterol because they are consuming too much oily food and not doing any cardio activities. They are also facing a backlash from parents as a result of the rising in obesity and eating habits. The restaurants are bringing in healthier choices to cater to customer’s needs. For example, McDonald’s recently brought in grilled chicken wraps and Salad Chicken McGrill which are a better and cleaner choice compared to the rest of the items available. 2.2 Economic Singapore has a rising turnover for Food and beverage sector estimated to be S3.6 billion annually. Even though a small part which only contributes about 1% to GDP; it is a important aspect to the tourism industry. According to a latest survey done by Sydney-based Research Company, BIS shrapnel, an average Singaporean paid about $1900 eating out. Eating out......

Words: 1590 - Pages: 7

Free Essay

Pestel Analysis

...PESTLE ANALYSIS OF MAHINDRA AND MAHINDRA AUTOMOTIVE * Automotive Division of Mahindra & Mahindra Ltd. is in the business of manufacturing and marketing Utility Vehicles, LCVs and services for last 52 years. * It is the market leader in this segment enjoying more than 503 of the market share. PESTLE ANALYSIS OF MAHINDRA AND MAHINDRA AUTOMOTIVE 3 TOPIC | PAGE NO. | OVERVIEW | 5 | PURPOSE OF PESTLE | 6 | POLITICAL FACTOR | 8 | ECONOMICAL FACTOR | 11 | SOCIAL FACTOR | 13 | TECHNOLOGY FACTOR | 15 | LEGAL FACTOR | 17 | ENVIRONMENTAL FACTOR | 19 | SUMMARY | 21 | PESTLE ANALYSIS OF MAHINDRA AND MAHINDRA AUTOMOTIVE 4 * Political, Economical, Social, Technological, Legal, Environmental. * It encompasses the important factors that influence strategic management. * It gives an overview of the different macro environmental factors that the company has to take into consideration. * It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. PESTLE ANALYSIS OF MAHINDRA AND MAHINDRA AUTOMOTIVE 5 * What environmental factors are affecting the organisation? * Which of these are most important at the present time? * Which of these are most important in the future? PESTLE ANALYSIS OF MAHINDRA AND MAHINDRA AUTOMOTIVE 6 Political Environment Economical PESTLE Legal Social Technology PESTLE ANALYSIS OF......

Words: 1023 - Pages: 5

Premium Essay

Picard Pestel Analysis

...B. PESTEL analysis The political factor: There is a new government policy called “manger-bouger” which aims at prompting the youth to have a healthier way of life doing sports and having a balanced diet. The economical factor: The economic crisis has affected almost every industry in the world. Consumers find themselves with less money in their pocket. But the frozen food market is based on quite low and affordable products for all consumers so the risk that consumers find cheaper alternatives to eat is not that high. The levels in the industry sales should keep steady. Nevertheless, the aspects of the economy that is most affecting the frozen food industry is the huge price increase of raw material since 2010. Distributors will have to reflect on their price this rise in order to keep their margin. The social factor: The “traditional” family scheme with the wife cooking for her husband and kids is disappearing because women are most of the time working as well. Women have therefore less time to cook but more and more men are cooking for the whole family. But more generally, people don’t spend so much time on preparing the food anymore. Yet, French hedonism on food is still a custom. Indeed, French consumers are very demanding for quality and diversity even if they do not have time to cook. Besides, because of a lower budget and of a need to eat fast working people tend to eat at the office where kitchen are provided. Technological factor: There......

Words: 566 - Pages: 3

Free Essay

Pestel Analysis

...PESTLE Analysis for MARKS and SPENCER Introduction Marks & Spencer is a British retailer with over 800 stores in more than 30 countries around the world. It is the largest clothing retailer in the UK, as well as being a food retailer. Most of it’s domestic stores sell both clothing & food, and since the year 2000 Marks & Spencer have started to expand into other ranges such as home wares, furniture & technology. Marks & Spencer became the first British retailer to make a pre-tax profit of over £1 billion “BBC News online 1998” Though a few years later Marks & Spencer were hit by the “credit crunch” which has had a dramatic effect on the company as they struggle in the current economical climate. Political Factors The government sets regulations for companies to abide by such as Health & Safety British Standards such as, planning for hazard identification, risk assessment and risk control. If companies do not abide by these regulations they will be fined or even in some cases be forced to close down. Marks & Spencer did not abide by the British Standards as they were charged for neglecting health & safety regulations after a door fell on an employee. George Blair was allegedly injured after a warehouse door in their store at Braehead, near Glasgow was left hanging on loose fixtures. Marks & Spencer are alleged to have ignored repair requests, allowing the door to fall into disrepair. Marks & Spencer pled not guilty to this; there is still no outcome of this trial. ...

Words: 1090 - Pages: 5

Free Essay

Pestel Analysis

...Pestel Analysis PESTEL ANALYSIS: A REPORT ON UNILEVER INTRODUCTION TO THE COMPANY The Fast Moving Consumer Goods (FMCG) environment is rapidly changing. Especially, the increasing popularity of line extensions seems to depend on advantages inherent in brand leveraging. FMCG manufacturers go into R&D in order to come up with the product that best satisfy consumers because customers become more critical about attaching themselves to a particular brand. They will also like to buy less expensive product due to current economic tide. Unilever is one of the biggest Fast Moving Consumer Good (FMCG) companies in the world. I have always been inquisitive about Unilever’s operations because I use some of its products, even right from childhood. This together with the current environmental challenges being faced by FMCG manufacturers motivated me to find out about Unilever’s operations and the current challenges it faces in the volatile business environment. Unilever was founded in 1930 through merger by the British, Lever Brother; and the Dutch, Margarine Unie; now Unilever PLC in London, U.K and Unilever N.V in Rotterdam, Netherlands respectively. In 1872 before the merger, Jurgens and Van den Bergh, the Dutch, built factory in Netherlands for the production of Margarine made from milk and fact. In 1927, they formed Margarine Unie (margarine Union) together with two European Businesses, Centre and Schicht. Lever & Co on the other hand was founded in 1884 by British William......

Words: 317 - Pages: 2