Unit 1 Assignment 2
Issues Date: 07.01.22
Hand in Date: 09.02.22
Examine the environment in which businesses operate and business markets.
Introduction:
This report will examine the effects of the internal and external environment on a large
business in the European Union and how the business has and will respond to changes. To
examine the environment in which the business operates and examine the business
markets. The large business in the European Union that has been chosen is The
Bridgestone Group Company. The Bridgestone Company has been around since 1906 has
dedicated itself generally committed to serving society with a higher level of standard for the
quality they produce to the society since they have been around for 116 years even through
World War 1 and World War 2. The Bridgestone Group Company has achieved great things
within those 116 years, one of these achievements is they developed Japan's first passenger
vehicles radials. The Bridgestone Company is the largest Global Tyre business throughout
the century and the world. The Bridgestone Company will fulfil their responsibilities within
society in the past, the present and the future, they will always be there for everyone and
their vehicles.
External Environment
The external environment has an impact on enterprises and is made up of a variety of
factors. Businesses frequently utilise these criteria to determine how and why they will be
successful or unsuccessful. One way for businesses is to use PESTLE Analysis which
stands for Political, Economic, Social, Technological, Legal and Environment. Businesses
that make use of PESTLE analysis, it gives companies their information of the context about
the business direction, brand positioning, growth goals, and threats such as another
productivity pandemic. It can assist in determining the viability of existing products and
services as well as the development of new products.
This is Bridgestone Company’s
PESTLE Analysis, this shows
their Political, Economic, Social,
Technological, Legal and
Environmental factors that
Bridgestone uses for their
company. (Ref 1)
Political
,Political variables have a significant impact on Bridgestone's long-term viability and
profitability, according to the PESTLE analysis. The company's sensitivity to changes in
political contexts in different nations grows as a result of its international presence. The key
to success in a dynamic international business environment is to diversify systematic risks in
a political context. A country's political environment is made up of several different
components. During the strategic planning process, The Bridgestone Company must
consider the following political concerns.
A stable and pleasant business environment with predictable market growth trends is
provided by high political stability. However, when there is political chaos the investors are
put off and stakeholder’s faith in economic and organisational performance is harmed.
Bridgestone is currently present in a number of nations, each of which has its own set of
political tensions. The growing tensions and instabilities in the global political environment
may have an impact on the Global Industry's growth and limit Bridgestone's growth
opportunities. The changes in government policy are detrimental to company performance
because they increase environmental uncertainty. It is critical for Bridgestone to keep track
of current political developments in the country, as changes in government may affect the
government's priorities for the development of various businesses.
The Bridgestone Company should closely examine demonstrations by pressure
organisations, social and environmental activists and the labour unions, as these protests
play a key impact in policy making. Bridgestone's ability to interact with the community and
achieve long-term company goals may be enhanced by close collaboration with such
groups. Furthermore, a well developed governance system combined with a democratic
political atmosphere improves the business environment for multinational corporations such
as Bridgestone.
The bureaucracy and corruption have a negative impact on the business environment.
(Ref 2) Bridgestone's business environment is becoming increasingly unstable as a result of
eroded public trust in commercial organisations. This is also because of the general political
and economic structure of countries with high levels of corruption and poor law enforcement.
Corruption can affect a variety of company processes which include licensing, contracting,
fraudulent dealings and as well as frequent lawsuits. However, if the Bridgestone Company
decides to join markets with a corrupt economic and political system, it would destabilise
society and would undermine the justice system. Meanwhile, that would endanger the rule of
law and risk the company’s long-term viability.
Bridgestone's profitability will be directly affected by entering nations with high tax rates.
Taxation has a negative impact on international trade and hinders exports. The Bridgestone
Company can enter markets with low taxation and profit margins, allowing it to invest in
research and development. Bridgestone may also conduct research into industry-specific
taxation rules in order to have a better understanding of the host government's aims and
interests in promoting industries. Furthermore, high trade restrictions (Ref 3) might
complicate the business environment by reducing exports and undermining ties with foreign
trade partners. Moreover, if the government of the country under consideration is not serious
about protecting business organisation's intellectual property rights. It would discourage
entrepreneurs from investing in businesses because of the significant danger of ideas being
,stolen. As a result, Bridgestone Company needs to research how intellectual property rights
are protected in the host country and adjust its business plans accordingly.
Economic
The Bridgestone Company must grasp at the economic elements such as foreign exchange
or interest rates, labour market conditions, inflation, saving rates and among others. This is
because they influence the country's overall economic environment. The Bridgestone
Company can assess the growth trajectory of industry and organisation by having a
thorough awareness of the economic environment. Bridgestone Company must examine the
following economic aspects in order to make informed decisions.
Organisational performance is directly influenced by a country's economic progress.
Bridgestone Company may benefit from growing economies in a variety of ways. It is also
crucial to comprehend the stage of the industry life cycle. Due to market saturation, entering
mature sectors might be more difficult than entering businesses in the growth stage.
Furthermore, the amount of money invested on essential infrastructure development by the
host country government has an impact on Bridgestone's commercial performance. A well
developed infrastructure improves the business environment and the Global Industry's
growth potential in the specific country.
The ability of Bridgestone Company to pursue its long-term growth objectives will be
determined on the rate of GDP growth. (Ref 4) The consumer’s ability to spend more on
supplied products is also indicated by a high GDP, the GDP stands for Gross Domestic
Product. High unemployment indicates that there is a surplus of labour available at cheaper
wages. Bridgestone's production costs could be reduced by operating in such a market. The
interest rate and its impact on borrowing ability and investment attitude should also be
carefully considered by the organisation. The high interest rate will encourage people to
invest and improve Bridgestone's growth potential. Finally, the fluctuations in the exchange
rate might affect profitability and international trade. Bridgestone may be concerned by the
high volatility of the local currency.
Wage rates and skilled worker supply are determined by labour demand and supply. The
Bridgestone Company needs to research and predict labour market conditions (Ref 5) in
order to figure out how to attract outstanding employees and use their abilities to boost
business success. Bridgestone Company can benefit from better employee productivity
when labour markets are flexible. One the other hand, operating in restrictive labour markets
may result in labour pay and other issues being addressed by powerful labour unions.
Bridgestone Company should also examine the availability of competent human resources,
since a labour deficit can impede corporate efficiency and make talent attraction and
retention more difficult.
Bridgestone's global expansion tactics are influenced by financial market efficiency, as
operating in highly efficient financial markets results in increased liquidity and a stronger
capacity to enter new markets. Bridgestone's ability to raise capital at reasonable prices will
be determined by the health and efficiency of financial markets. The current economic
structure has an impact on Bridgestone's business operations. A monopolistic or oligopolistic
, structure will have a different economic and regulatory environment than monopolistic or
perfect competition.
Social
Organisational culture derives strong influence from societal norms, values and trends.
That would have a significant impact on organisational culture. The Bridgestone Company
may use the PESTLE analysis to build effective marketing messages and achieve the
company's objectives by understanding demographic trends, power dynamics, consumer
spending habits and common values.
Bridgestone's marketing department may use the data gained from the sociological and
environmental analysis to target certain customer groups and boost the attraction of its
products to potential purchasers. In order to do macro-environmental analysis, Bridgestone
must examine the following societal elements. For multinational corporate firms like
Bridgestone, changes in demographic patterns such as population ageing, migration trends,
and socio-economic variables are critical. Bridgestone can choose the correct market
segments with strong growth potential by studying demographic parameters. Migration has
an impact on company and marketing tactics. It is critical for Bridgestone to comprehend the
general public's attitude about migration, as this might have an impact on Bridgestones
Company’s ability to bring international executives to the host country.
In society there are many communities where the acceptability of hierarchy and income
disparity may be seen in the power distance. (Ref 6) When entering markets with a high or
low power distance, Bridgestone Company must alter it’s business management procedures.
In many nations that have a rising inequality is shifting the power structure, which has major
ramifications for multinational corporations like Bridgestone. The Bridgestone Company
needs to research traditional gender roles in order to align its marketing and communication
methods. Traditional patriarchal societies with firmly defined gender roles will have different
marketing and human resource tactics than societies with little gender stereotypes.
International marketing managers consider culture to be a significant factor. Each society
has its own set of values and traditions that have a significant impact on consumer
behaviour. Bridgestone should create local teams and alliances to better understand social
attitudes so that marketing campaigns may be tailored to the specific cultural setting. (Ref 7)
Bridgestone also pays close attention to social and economic class division. Bridgestone will
need to use specialised marketing tactics, to offer luxury products at premium rates to a
market where the high-end market is rather limited. Similarly, where social class stratification
is low, market segmentation based on social class may be unproductive.
Customers have been encouraged to shop online as a result of the emergence of social
media and e-commerce through advertising. The Bridgestone Company must comprehend
internet shopping behaviour while taking into account demographic disparities, as younger
customers are more likely to shop online than older customers. When establishing marketing
and communication strategies, take into account the expanding use of mobile phones and
social networking sites.
Issues Date: 07.01.22
Hand in Date: 09.02.22
Examine the environment in which businesses operate and business markets.
Introduction:
This report will examine the effects of the internal and external environment on a large
business in the European Union and how the business has and will respond to changes. To
examine the environment in which the business operates and examine the business
markets. The large business in the European Union that has been chosen is The
Bridgestone Group Company. The Bridgestone Company has been around since 1906 has
dedicated itself generally committed to serving society with a higher level of standard for the
quality they produce to the society since they have been around for 116 years even through
World War 1 and World War 2. The Bridgestone Group Company has achieved great things
within those 116 years, one of these achievements is they developed Japan's first passenger
vehicles radials. The Bridgestone Company is the largest Global Tyre business throughout
the century and the world. The Bridgestone Company will fulfil their responsibilities within
society in the past, the present and the future, they will always be there for everyone and
their vehicles.
External Environment
The external environment has an impact on enterprises and is made up of a variety of
factors. Businesses frequently utilise these criteria to determine how and why they will be
successful or unsuccessful. One way for businesses is to use PESTLE Analysis which
stands for Political, Economic, Social, Technological, Legal and Environment. Businesses
that make use of PESTLE analysis, it gives companies their information of the context about
the business direction, brand positioning, growth goals, and threats such as another
productivity pandemic. It can assist in determining the viability of existing products and
services as well as the development of new products.
This is Bridgestone Company’s
PESTLE Analysis, this shows
their Political, Economic, Social,
Technological, Legal and
Environmental factors that
Bridgestone uses for their
company. (Ref 1)
Political
,Political variables have a significant impact on Bridgestone's long-term viability and
profitability, according to the PESTLE analysis. The company's sensitivity to changes in
political contexts in different nations grows as a result of its international presence. The key
to success in a dynamic international business environment is to diversify systematic risks in
a political context. A country's political environment is made up of several different
components. During the strategic planning process, The Bridgestone Company must
consider the following political concerns.
A stable and pleasant business environment with predictable market growth trends is
provided by high political stability. However, when there is political chaos the investors are
put off and stakeholder’s faith in economic and organisational performance is harmed.
Bridgestone is currently present in a number of nations, each of which has its own set of
political tensions. The growing tensions and instabilities in the global political environment
may have an impact on the Global Industry's growth and limit Bridgestone's growth
opportunities. The changes in government policy are detrimental to company performance
because they increase environmental uncertainty. It is critical for Bridgestone to keep track
of current political developments in the country, as changes in government may affect the
government's priorities for the development of various businesses.
The Bridgestone Company should closely examine demonstrations by pressure
organisations, social and environmental activists and the labour unions, as these protests
play a key impact in policy making. Bridgestone's ability to interact with the community and
achieve long-term company goals may be enhanced by close collaboration with such
groups. Furthermore, a well developed governance system combined with a democratic
political atmosphere improves the business environment for multinational corporations such
as Bridgestone.
The bureaucracy and corruption have a negative impact on the business environment.
(Ref 2) Bridgestone's business environment is becoming increasingly unstable as a result of
eroded public trust in commercial organisations. This is also because of the general political
and economic structure of countries with high levels of corruption and poor law enforcement.
Corruption can affect a variety of company processes which include licensing, contracting,
fraudulent dealings and as well as frequent lawsuits. However, if the Bridgestone Company
decides to join markets with a corrupt economic and political system, it would destabilise
society and would undermine the justice system. Meanwhile, that would endanger the rule of
law and risk the company’s long-term viability.
Bridgestone's profitability will be directly affected by entering nations with high tax rates.
Taxation has a negative impact on international trade and hinders exports. The Bridgestone
Company can enter markets with low taxation and profit margins, allowing it to invest in
research and development. Bridgestone may also conduct research into industry-specific
taxation rules in order to have a better understanding of the host government's aims and
interests in promoting industries. Furthermore, high trade restrictions (Ref 3) might
complicate the business environment by reducing exports and undermining ties with foreign
trade partners. Moreover, if the government of the country under consideration is not serious
about protecting business organisation's intellectual property rights. It would discourage
entrepreneurs from investing in businesses because of the significant danger of ideas being
,stolen. As a result, Bridgestone Company needs to research how intellectual property rights
are protected in the host country and adjust its business plans accordingly.
Economic
The Bridgestone Company must grasp at the economic elements such as foreign exchange
or interest rates, labour market conditions, inflation, saving rates and among others. This is
because they influence the country's overall economic environment. The Bridgestone
Company can assess the growth trajectory of industry and organisation by having a
thorough awareness of the economic environment. Bridgestone Company must examine the
following economic aspects in order to make informed decisions.
Organisational performance is directly influenced by a country's economic progress.
Bridgestone Company may benefit from growing economies in a variety of ways. It is also
crucial to comprehend the stage of the industry life cycle. Due to market saturation, entering
mature sectors might be more difficult than entering businesses in the growth stage.
Furthermore, the amount of money invested on essential infrastructure development by the
host country government has an impact on Bridgestone's commercial performance. A well
developed infrastructure improves the business environment and the Global Industry's
growth potential in the specific country.
The ability of Bridgestone Company to pursue its long-term growth objectives will be
determined on the rate of GDP growth. (Ref 4) The consumer’s ability to spend more on
supplied products is also indicated by a high GDP, the GDP stands for Gross Domestic
Product. High unemployment indicates that there is a surplus of labour available at cheaper
wages. Bridgestone's production costs could be reduced by operating in such a market. The
interest rate and its impact on borrowing ability and investment attitude should also be
carefully considered by the organisation. The high interest rate will encourage people to
invest and improve Bridgestone's growth potential. Finally, the fluctuations in the exchange
rate might affect profitability and international trade. Bridgestone may be concerned by the
high volatility of the local currency.
Wage rates and skilled worker supply are determined by labour demand and supply. The
Bridgestone Company needs to research and predict labour market conditions (Ref 5) in
order to figure out how to attract outstanding employees and use their abilities to boost
business success. Bridgestone Company can benefit from better employee productivity
when labour markets are flexible. One the other hand, operating in restrictive labour markets
may result in labour pay and other issues being addressed by powerful labour unions.
Bridgestone Company should also examine the availability of competent human resources,
since a labour deficit can impede corporate efficiency and make talent attraction and
retention more difficult.
Bridgestone's global expansion tactics are influenced by financial market efficiency, as
operating in highly efficient financial markets results in increased liquidity and a stronger
capacity to enter new markets. Bridgestone's ability to raise capital at reasonable prices will
be determined by the health and efficiency of financial markets. The current economic
structure has an impact on Bridgestone's business operations. A monopolistic or oligopolistic
, structure will have a different economic and regulatory environment than monopolistic or
perfect competition.
Social
Organisational culture derives strong influence from societal norms, values and trends.
That would have a significant impact on organisational culture. The Bridgestone Company
may use the PESTLE analysis to build effective marketing messages and achieve the
company's objectives by understanding demographic trends, power dynamics, consumer
spending habits and common values.
Bridgestone's marketing department may use the data gained from the sociological and
environmental analysis to target certain customer groups and boost the attraction of its
products to potential purchasers. In order to do macro-environmental analysis, Bridgestone
must examine the following societal elements. For multinational corporate firms like
Bridgestone, changes in demographic patterns such as population ageing, migration trends,
and socio-economic variables are critical. Bridgestone can choose the correct market
segments with strong growth potential by studying demographic parameters. Migration has
an impact on company and marketing tactics. It is critical for Bridgestone to comprehend the
general public's attitude about migration, as this might have an impact on Bridgestones
Company’s ability to bring international executives to the host country.
In society there are many communities where the acceptability of hierarchy and income
disparity may be seen in the power distance. (Ref 6) When entering markets with a high or
low power distance, Bridgestone Company must alter it’s business management procedures.
In many nations that have a rising inequality is shifting the power structure, which has major
ramifications for multinational corporations like Bridgestone. The Bridgestone Company
needs to research traditional gender roles in order to align its marketing and communication
methods. Traditional patriarchal societies with firmly defined gender roles will have different
marketing and human resource tactics than societies with little gender stereotypes.
International marketing managers consider culture to be a significant factor. Each society
has its own set of values and traditions that have a significant impact on consumer
behaviour. Bridgestone should create local teams and alliances to better understand social
attitudes so that marketing campaigns may be tailored to the specific cultural setting. (Ref 7)
Bridgestone also pays close attention to social and economic class division. Bridgestone will
need to use specialised marketing tactics, to offer luxury products at premium rates to a
market where the high-end market is rather limited. Similarly, where social class stratification
is low, market segmentation based on social class may be unproductive.
Customers have been encouraged to shop online as a result of the emergence of social
media and e-commerce through advertising. The Bridgestone Company must comprehend
internet shopping behaviour while taking into account demographic disparities, as younger
customers are more likely to shop online than older customers. When establishing marketing
and communication strategies, take into account the expanding use of mobile phones and
social networking sites.
