Essay on the External Business Environment
In this essay, the organisation that I will be looking at is John Lewis. The outcome of the essay is to analyse how John Lewis is affected by the macro environment, analyse John Lewis using PESTLE and evaluate the strengths and limitations of using PESTLE as a strategic diagnostic tool. To discuss the market system and apply a range of market theories to John Lewis and to understand the organisational environment.
There are many factors in the macro environment that will affect the decisions that John Lewis make, as well as any other company. The macro environment includes tax changes, new laws, demographic and government policy changes.
PESTLE stands for Political, Economic, Social, Technological, legal and Environmental.
Political factors include tax policies, employment laws, environmental regulations and trade restrictions.
The political factors that can affect John Lewis are VAT, tax policy, employment laws, environmental regulations, trade restrictions etc. There is added tax on all goods except for food because of the increase in VAT which is now 20% from 17.5%. Businesses that are owned by workers are more favourably looked at by the government. John Lewis is an example of how businesses should operate.
The John Lewis store on Oxford Street has suffered a 5.52% drop in sales as a result of the congestion charges that have been put into place. Since the introduction of the congestion charging scheme, less people are shopping on Oxford Street.
Economic factors include economic growth/ decline, interest rates, exchange rates and inflation rate, wage rates, minimum wage, working hours, unemployment (local and national), credit availability, cost of living etc.
Banks are not lending money to businesses or to people in general. This is because of the recession and people are reducing their spending. Therefore, many supermarkets such as Asda and Sainsbury’s are now selling household goods, as...
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