WOW! Business 2015 - the UK's most popular CPD course for ALL business teachers

Join us for WOW! Business 2015 - the UK's Best Business Studies CPD

Business Studies Resources Popular resources on the {my channel} blog Resource tags for the blog RSS Feed for the blog Twitter feed for this blog Teacher Email Resource Newsletter Category listing for this blog Business Studies Blog Home Page
Tracker Pixel for Entry

Research Buster: External Environment

Friday, June 10, 2011
Print Tweet This!Save to Favorites

I have been telling my students this year that they essentially need to think of the external environment as being made up of two elements, namely PESTLE factors (Political, Economic, Social, Technological, Legal & Environmental) along with the competitive environment.  So this seems a logical structure to follow for this ResearchBuster.

 

Political :

This is one of the more difficult of the PESTLE factors as it is perhaps less visible, but don’t forget that governments are often big customers of business.  So decisions such as those to put the running of prisons out to private tender, or to build new submarines can provide lucrative opportunities for businesses like Serco and BAe Systems respectively.

Economic:

Consider the difference between cyclical goods and services (those purchased or in demand when the economy is doing well and people have high levels of disposable income) and non-cyclical goods and services (like food and utilities like gas and electric which people need all of the time, including during a recession). 

Firms who sell cyclical goods and services face tough times during an economic down turn, as demonstrated by the fortunes of the car industry.

Those such as Tesco who sell non-cyclical goods and services should fare better in a recession, but can they keep this level of sales when the economy picks up again?

And finally, note how firms like Whitbread Leisure and Dominos Pizza have won during the recession as a result of people looking for the best value for leisure spending.

Social : Given the focus on CSR as the AQA research theme, students of that specification will have no shortage of examples here.  But for the sake of completeness, and for the benefit of non AQA students, how about McDonalds and the way in which it has needed to develop it’s menu to contain healthy items?

Technological:

Firms must anticipate and react to technological developments that impact upon the markets in which they operate.  A high profile victim of changing technology right now is HMV, whose CD sales have plummeted with the move to internet downloads.  The future doesn’t look much better for subsidiary Waterstones as the Kindle Revolution continues, though HMV are looking to sell off this business in order to repay debts to the banks.
Legal :  It’s not just the recession that has hit nightclub operator Luminar.  The ban on smoking and change in pub opening hours as a result of licensing laws have started to hit it’s trade further.  And of course Unilever are currently reacting to the banning of it’s Marmite brand in Denmark.

Environmental:

Firms that don’t pay sufficient regard for the impact of their operations on the environment will pay the price both in terms of damage to their reputation and the risk of fines.  The BP Deepwater Horizon spill and accident is one that most students will be aware of to some extent.

Competitive Environment :

Porter’s Five Forces is an excellent model for assessing the competitive environment.  And this excellent previous Tutor2U blog post is what I used to get my students to apply their knowledge to own label foods manufacturer Northern Foods.



 

FOR MORE REVISION SUPPORT FROM THE TUTOR2U TEAM...

Follow the tutor2u team and all our subject blogs on Twitter

Register for free tutor2u revision classes at our sister site Zondle:

Use the following class codes to join our Zondle revision classes:

Economics: AS Micro 290-66327 AS Macro 290-66328 A2 Micro 290-66329 A2 Macro 290-66330

AQA AS/A2 Business: BUSS1 290-66325 BUSS2 290-66326 BUSS3 290-66323 BUSS4 290-66322

 



The cameras went behind the scenes at one of tutor2u's exam coaching & revision workshops this summer...

 

Discover more about our intensive exam coaching & revision workshops desiged to prepare for exams in May & June 2015:

AS/A2 Economics Workshops  |  AS/A2 Business Studies  |  AS Psychology


tutor2u online store

PowerPoint Lesson Activities Teacher Conferences & CPD Courses
Exam Coaching & Revision Workshops Pre-release Case Study Toolkits
A Level Economics Teaching Support Resources for Business Studies
Digital Magazines  


Enter your Email



EntrepreneurLIVE! 2014

Dates and Locations for EntrepreneurLIVE! 2014 Now Available - Click here for Details...

Latest resources

Resource categories Blog RSS feed Blog RSS Feed
© Copyright Tutor2u Limited 2013 All Rights Reserved