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PESTLE analysis
PESTLE analysis gives an insight into the external environment factors that could affect Commercial Technologies business operations in the UK.
Political
The political legislation in the UK affects Commercial Technology as profits generated by the company is influenced by the workforce it has and the nation’s economic health.
In the UK internal politics in the country is not stable with the ongoing election in the country. This has resulted in instability in the country’s financial system (Phipps, 2015).
There are strict restrictions in place for production and dispose of waste. Currently UK levies Value Added Tax according to the International Trade Union regulations.
There are strict regulations on import and export of goods.
There exists strict trade regulations (Gov.UK, 2015).
Economic
The ongoing general elections in the UK has resulted in decreased economic growth in the country. Economic growth of UK has nearly halved during 2015 ahead of the general election.
Compared with the GDP rate of increase in the past 3 years, during 2015 GDP growth fell to the slowest pace (Spence, 2015).
Unemployment rate has decreased to 1.86 million in the UK during 2014 (BBC, 2015).
The financial growth rate is rather slow.
During present times, the inflation rate is low in UK.
Social
Customers are becoming more aware of technological products.
Customers prefer to be well – informed about an electronic product before making a purchase.
With rising income people are more inclined to make a purchase, especially electronic goods.
The market size is increasing due to increased power of purchase amongst people.
People show readiness to purchase new and trendy electronic goods.
Technological
Technological changes are rapid.
Investment of research and technology is high amongst technology firms.
Firms have a basic infrastructure, especially the ones operating in the technology domain.
As distribution channels have changed, Commercial Technology can sell its products online.
Commercial Technology can generate competitive advantage by offering unique technological features in its electronic products.
Legal
The performance of Commercial Technology is directly impacted by government legislations and policies.
Anti-trust law is in place, so customer satisfaction must be ensured.
Consumer protection laws enable consumers to return products if they are not satisfied with its performance.
Intellectual property law will assist Commercial Technology in creating competitive advantage through technology.
Employment law ensures Commercial Technology adopts good employment practices.
Environmental
Carbon footprint is a major issue for Commercial Technology. The UK government has levied laws and policies to ensure greenhouse gas emission is decreased to 80% by 2050 (Gov.UK, 2014).
Recycling and waste management practices are required to be adopted by manufacturing firms.
There are laws regulating pollution, so the production process has to aim at reducing the amount of pollution as a result of the production.
Climate change is a major concern given issues in global warming.
Companies are required to abide by environmental laws levied by the government.
PESTLE for Commercial Technology
Fishbone diagram
The problem
At present the performance of products manufactured by Commercial Technology is low. During the past year there has been a marked rise in the number of products returned, and customer satisfaction with their products is low. The situation is so dire that the reputation of the firm is in line. Even regular customers have started thinking twice about making a purchase from Commercial Technology. The company is presently focused on decreasing its manufacturing cost, thereby increasing its profits even more.
The main factors involved
The firm made a switch to an untried maker, just to save on product manufacturing cost, but this resulted in decreasing the quality of products being manufactured. This is not a good move, as the cost saving Commercial Technology will be able to achieve is less. The old supplier was better as they offered high quality products at a nominal cost. The design of PCBs is less efficient as the components were placed too close to one another. Production time is low as the process in use presently is a well - tested one. Products are designed well, but there is no facility for proper production of the same. Engineers put in good efforts, manufacturing team is not able to meet the quality and design demands. Quality focus is essential.
Possible causes of problems
There are potential bottlenecks in the production process. Decreased quality is the main cause of the problem with increased returns and decreasing customer satisfaction. Decreasing work performance, especially from the production team, and the over ambitions of the design team, without taking into consideration the facilities Commercial Technology has for product manufacture is a major cause of the problems. One other cause of the issue is the management team. They are unable to successfully collaborate amongst the different departments in the organization. This results in lack of communication, so product manufacturing and design teams are working as two separate spheres.
Fishbone diagram analysis
The relationship between the problems existing at Commercial Technologies and the causes of the issues are represented in the Fishbone diagram. Through business analysis the four main problem areas identified were the management, the design team, the production team, and the low quality of materials being presently used for product manufacture. The main causes of these issues was lack of cooperation between the design team and production or manufacturing team. The production and design process are happening as two separate processes, which results in a product well designed, but now suitable for Commercial Technology’s manufacturing line.
Figure Fishbone Analysis
References
BBC news. (2015). UK unemployment falls to 1.86 million. Retrieved from http://www.bbc.com/news/business-31515556
Gov. UK. (2015). Business tax-guidance. Retrieved from https://www.gov.uk/importing-and-exporting-electronic-goods
Gov. UK. (2014). Greenhouse gas emissions. Retrieved from https://www.gov.uk/government/policies/reducing-the-uk-s-greenhouse-gas-emissions-by-80-by-2050
Phipps, C. (2015). General Election 2015. Retrieved from http://www.theguardian.com/politics/live/2015/apr/28/election-2015-cameron-victory-doable-parties-economy-ed-balls-live
Spence, P. (2015). UK GDP growth falls to slowest pace in three years with just nine days until election. Retrieved from http://www.telegraph.co.uk/finance/economics/11566370/UK-GDP-falls-to-slowest-pace-in-three-years-with-just-nine-days-until-election.html
