BMG 625 Module Handbook

Alliance Trust is one of the powerful companies in the industry of investment and financial service. This company has successfully executed business all over the world, which has created a strong brand image of this company in the global market. This company helps the investors to grow their capital by giving assistance to raise their income. In this essay, the macro analysis of this company is going to be done by incorporating PESTLE analysis. PESTLE analysis will help to evaluate some areas such as political, economic, social, technological, legal and environmental.

In this essay, the pestle analysis will be done in order to evaluate political factors, economic factors, socio cultural factors, technological factors and legal factors. Conclusion will be provided where the key points will be summarised.

Political factors play an important part in part in order to identify the factors that can affect the long-term profitability of the Alliance PLC trust company in the UK market. The political factors covered some areas such as political stability, and antitrust lawsassociated with this industry.

The political stability is the strong factor of this country. Even, UK also tries to maintain cordial relations with other powerful countries to avoid unnecessary inconvenience from others (Christodoulou and Cullinane, 2019). Political crisis due to the Brexit has also affected the financial and banking sectors. Apart from that, stringent regulation can also hamper the trade investment business. Therefore, this can be considered that there are both positive and negative aspects of the political factors in the UK industry. Alliance Trust PLC should consider all these factors and implement effective steps to identify any potential threats existing within this financial services and trade investment industry.

In the UK, anti-competitive and anti-trust business are prohibited. According to competition Act 1988, under the articles 81, 82 of the EC treaty, these laws determine the prohibition of anti-competitive agreements between businesses (Achinas et al. 2019).  The antitrust laws also allow the companies to have fair competition and protect the investors from any kind of unfair practices in business. Excessive political interference led to a financial crisis in the investment and financial services industry.

Economic factors play a pivotal part that determines some major areas of the UK industry. The UK is the fastest growing economy by its nominal GDP. The financial sector plays a crucial role in the UK economy. As per the reports of House of Commons library, it has contributed around 134 billion pound in the UK economy in the year of 2019. Due to the pandemic situation, the GDP got lower in 2020 at the rate of 2%. In 2021, the GDP of the UK will be 3.12 trillion which rank fifth in the global economy. Along with that, The UK is also a powerful country in terms of having foreign direct investment (FDI).

Many business organizations from around the whole world have invested in several industries in the UK. This has increased the capital of the UK economy.

Massive growth in business also instigates people to invest more in investment companies. The wage of the people increases every year with good percentile (David, 2019) .The income of the people is decent and that helps them to maintain a healthy lifestyle. This also encourages people from different backgrounds to invest more in trade investment organizations for better capital growth. The current corporate tax rate of the company is 19%.This has also been identified that the Bank of England has also provided around 100 billion into the economy in the year 2020.  This contribution has helped the economy to fulfil the gap in the economy.

These economic factors have made it easier for the Alliance trust Plc to analyse potential opportunities and threats of the industry in the UK.  Economic factors will also help the company to make effective changes in organizational structure for better growth in business.

Social factors play an integral part that helps to evaluate the macro environmental situation of the UK. The UK is one of the biggest consumer markets in the global market. The population of the country is 68 million. The income level of the country is comparatively high , compared to other powerful countries.  The unemployment rate in the UK is 4.8% and the inflation rate is 2%. Therefore, this can be considered that the convenient lifestyle of people has encouraged them to invest more in investment farms to get high returns. It has been identified that the people influence the lifestyle of the people in the UK. Diverse multicultural environment can also be seen in this country. The people in the UK are very much keen on enriching their financial growth by investing more on trade investment organizations and stock exchange markets. The investment and financial services industry is in high flux because of the huge earning sources of the people living in the UK (Walsh et al. 2019).

Diverse business culture is  one of the main area of the social factors. The diverse culture is also one of the reasons that has helped the country enrich the economy (Shalhoub et al. 2019). The diverse business culture also has also allowed the investors to expand their business in the competitive market. It also encourages people to invest more for their financial growth. In addition to that, the inflation rate did not grow over 2%.

Even, cordial relationships with powerful business organizations also motivate investors to invest more in different financial sectors to gain huge returns. This social factor will be very beneficial for Alliance Trust PLC Company to evaluate potential popular and implement ideas to expand their business in a sustainable way in the UK market.

Technological factors play an important role in the UK market of Alliance plc trust company. It is one of the most up-to-date countries in the world. London is the focal point of technological institutions and both financial. Day by day technologies is developing to offer the upgraded satisfaction of customers. According to Lember et al. (2018), upgraded business ideas are implacable for the new businesses personality to do marketing in the Uk. In the UK economy, the most powerful sector is Technology.  Young talents and freshers are focusing on these genres and circulating the businesses across the globe. However, the UK is going forward day by day. Another important point is the development and research for the company. From where companies get new motivation and new ideas. For a company, the general problem arises when future benefits are researched with unknown pros and cons.

Alliance plc trust company also follows some accounting measures to record their assets and materials. According to Acidic and Pinto, (2019) another technological factor is to buy computer software that is only for one purpose not usable for future applications. Indirect costs also hampered the company’s expenses. Tangible assets are also an impeccable fact of technology; these assets are also for a specific purpose. The cost is also incurred. There is a good deal of internal competition to invigorating growth. More innovative skills, qualities are needed in technological factors. There should be expertise in science and technological order.

Legal factors play a pivotal part in the pestle analysis of the UK. There is an uncertain factor that the difference between political and legal factors of the specific company. Legal factors led to the legal forces that a businessperson can do or not. Legal factors following some specific guidelines like Industrial Regulation, Licenses & Permits, Labor laws, Intellectual properties. Under this act, many other segments also available are maternity and paternity leave, holiday pay, minimum wage, sick pay, and some other rights provided. An act was passed in 2010 to stop discrimination i.e., Equality Act to fight against gender, colour, or any other differences. According to Kleffner, (2019) a business follows some legal factors like tax restrictions, inflation costs, export restrictions.

The important factor is to maintain the worker’s rights. Another discrimination happens when experts of university scholars assist in pestle analysis that many fashion retailers who sew clothes are from Asian countries. So, they dumped such a brand of Asia. According to Eu LaboIr Law, a worker can work for 48 hours a week. A rest of 11 hours in each 24-hour period. Employment law is the law that helps employers to gain their right to get the wages and it also known as labor law that signifies all the effectiveness of labour who work day to day basis and also to maintain the relation between labour union and employers. The UK allows workers who can work for more than 48 hours not on a direct payroll but with the help of the European Working Time Directive. Many changes occurred with the laws to re modify the workers’ beneficial parts. There are some legal factors that have hampered the business-like Employment law that depicts the right of the employees in UK. Legal factors are essential for the company to follow for its own benefits. Any law can save the company from losing prestige in front of the country.

Various markets have various environmental standards, which can affect the profitability of an organization in those markets. Even within a country often, states can have different environmental laws and liability laws. For example, in the United States – Texas and Florida have different liability clauses in case of mishaps or environmental disaster. Similarly, many European countries give healthy tax breaks to companies that operate in the renewable sector. The environmental risk score of Alliance Trust Plc is 3.8. According to Jang and Kim, (2018) over the past decade the concept of sustainable development has expanded from economic growth, environmental protection and social equity in business planning and decision-making.

Before entering new markets or starting a new business in an existing market, the firm should carefully evaluate the environmental standards that are required to operate in those markets. According to Abbas et al. (2019) environmental factors that affect business refer to the physical environment on Earth, which means everything from climate and weather to the availability of resources. There are various examples of environmental factors that affect business, which can be seen in large countries like the UK. Some of the environmental factors that a firm should consider beforehand are -Weather, Climate change, Laws regulating environment pollution, Air and water pollution regulations in Financial Services industry, Recycling, Waste management in Financials sector, Attitudes toward “green” or ecological products, Endangered species, Attitudes toward and support for renewable energy etc. UK has to face environmental issues like bad weather. Amir et al. (2018) mentioned that global warming is expected to be the greatest cause of this climate change. The Governmental Panel on climate change says a 1.5˚C average rise may put 20-30 percent of species at risk of extinction. But British summer attracts tourists from all over the world. According to as estimate, UK tourism earns more than 127 billion pounds every year. Plastic pollution in UK is a very common problem. Only a third of the UK’s annual 1.5 m tonnes of recyclable plastic waste being recycled. However, government, private corporations and other charity organizations have been taking steps and spreading information about recycling, less plastic waste and eco-friendly products and services. This year’s Environment day choose plastic pollution as its theme.

In this essay, the pestle analysis of Alliance PLC has been done in order to evaluate political factors, economic factors, socio cultural factors, technological factors, legal factors and environmental factors. In political factors, political stability and anti-trade laws have been discussed. In the case of economic factor, GDP, foreign direct investment and diverse economy has been discussed. In the socio cultural factor, living standards of people have been discussed that can influence the business environment of the company. In technological factor, cognitive technologies have been discussed that can also leave effect on the expansion of the Alliance Plc. In legal factors, some legal laws and rules regarding employment law and Eu LaboIr Law have discussed to analyse the legal factors of UK. Some environmental factors have also been depicted in environmental factors. Hence, this can be considered that, pestle analysis really makes it easier to evaluate the macro environments that can influence the business performance of the company.

Reference list

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Achinas, S., Horjus, J., Achinas, V. and Euverink, G.J.W., 2019. A PESTLE analysis of biofuels energy industry in Europe. Sustainability, 11(21), p.5981.

adicic, D. and Pinto, J., 2019. Collaboration with external organizations and technological innovations: evidence from spanish manufacturing firms. Sustainability, 11(9), p.2479.

Amir, R.M., Burhanuddin, B. and Priatna, W.B., 2018. The Effect of Individual, Environmental and Entrepreneurial Behavior Factors on Business Performance of Cassava SMEs Agroindustry in Padang City. Indonesian Journal of Business and Entrepreneurship (IJBE), 4(1), pp.1-1.

Christodoulou, A. and Cullinane, K., 2019. Identifying the main opportunities and challenges from the implementation of a port energy management system: A SWOT/PESTLE analysis. Sustainability, 11(21), p.6046.

David, J., 2019. PESTEL analysis of the UK. Retrieved October, 30, p.2019.

Jang, S.M. and Kim, K.I., 2018. The Effects of the Environmental Factors for ICT adoption on Globalization capabilities and business performance of SMEs. Journal of Convergence for Information Technology, 8(4), pp.219-224.

Kleffner, J.K., 2019. The Legal Fog of an Illusion: Three Reflections on” Organization” and” Intensity” as Criteria for the Temporal Scope of the Law of Non-International Armed Conflict. International Law Studies, 95(1), p.5.

Lember, V., Kattel, R. and Tõnurist, P., 2018. Technological capacity in the public sector: The case of Estonia. International Review of Administrative Sciences, 84(2), pp.214-230.

Perera, R., 2017. The PESTLE analysis. Nerdynaut.

Shalhoub, J., Marshall, D.C. and Ippolito, K., 2017. Perspectives on procedure-based assessments: a thematic analysis of semistructured interviews with 10 UK surgical trainees. BMJ open, 7(3), p.e013417.

Walsh, K., Bhagavatheeswaran, L. and Roma, E., 2019. E-learning in healthcare professional education: an analysis of political, economic, social, technological, legal and environmental (PESTLE) factors. MedEdPublish, 8.