Executive Summary
The current research is based on an understanding of the importance of external business environment analysis. The PESTEL framework as an effective industrial tool is also credibly explored and incorporated in the discussion of the current study in the evaluation of the research. Concerning the framework’s use, the issue of conducting an external environment analysis and how it helps firms like Ashtead PLC efficiently identify their business strengths and threats and work on them accordingly. The current study also supports in the identification of effective strategies for the organization to conduct legitimate business, as well as how the corporation may get a competitive advantage by better understanding market variations, client changes, and business transitions. The current study, which gives real-life examples of the efficient application of the PESTEL components into the corporation, is critical in determining how organizations like Ashtead PLC could theoretically respond to those changes utilizing the PESTEL tool.
Introduction
This business research aims to look at Ashtead PLC’s external business environment, which is one of the leading industrial equipment companies in the UK. This report seeks to describe the internal characteristics of the firm, including how the company is controlled and how the structural division is handled within the company’s disciplines, by examining and comprehending the company’s organizational structure. The function of CEOs, chairpersons, senior board members and how their roles enable the company to be organized systematically contribute to its overall growth. To identify and understand how Ashtead PLC performs successfully externally, the PESTEL framework would be utilized to conduct a practical examination of the company’s external business environment. In addition, the current business report will provide a thorough demonstration and theoretical explanation of how the company might employ the PESTEL criteria. By effectively explaining how the elements may be applied to Ashtead PLC, the current material aims to establish the conceptual relevance of the study, the relevance of practical business, and the functioning of the company’s external business environments.
Task 1. The organization, management, and governance of a company
Overview of Ashtead Plc
Ashtead PLC, one of the largest and most reputable industrial equipment rental companies, has continuously supplied high-quality and honest services since its founding in 1947. The firm is headquartered in London, England, and is traded on the London Stock Exchange (Ashtead-group.com. 2021). The company is based in the United States, Canada, and the United Kingdom, providing services worldwide (Ashtead-group.com., 2021). Sunbelt Rentals, the company’s subsidiary, earns and generates 85% of the company’s revenue in the United States. The six hindered sesame locations of Ashtead PLC are currently available in the United States and Canada. Sunbelt Rentals, formerly known as A-plant, is a corporation that operates throughout the United States and Canada. The company focuses on producing high-quality items and devices that may be utilized to conduct quality industrial tasks with the least amount of disruption. During its history, Geoff Dabble was one of Ashtead PLC’s most potent leaders (Ashtead-group.com, 2021). Until November 2018, the firm announced that Geoff Dabble would be stepping down after twelve years, and Brendan Horgan would take his place. Sunbelt Rentals’ COO and Chief Executive Officer had recently joined the company. His cooperation had tremendously improved the company’s standards, allowing them to have an excellent organizational structure and effectively integrate their rental services without any operational issues (Ashtead-group.com, 2021). Due to the availability of a good history of quality rental and outstanding services, the organization has provided consistent services to its consumers and industrial units during its active years (Ashtead-group.com, 2021).
Organization Structure
With a non-executive chairperson, chief executive, finance director, senior independent-executive directors within its disciplines, and the remaining four non-executive directors, the organization can manage its whole development through a hierarchical structure (Ashtead-group.com, 2021). Brendon Horgan, the company’s CEO, and Paul Walker, the company’s non-executive chairman, are two crucial aspects in ensuring that the company’s governance structure remains consistent and carefully established. Angus Cockburn chairs Ashtead PLC’s audit committee, which is made up of independent non-executive directors. There are four other independent non-executive directors on the committee (Ashtead-group.com, 2021). Lucinda Riches chairs the pay committee, which also includes four different directors. With the backing of the chief executive officer, Brendon Horgan, the committee members have no personal financial interests and instead focus on implementing existing policies and policy changes (Ashtead-group.com, 2021). The committee’s primary responsibility is to complete all of the series, including providing adequate incentive packages to executive management to increase performance moderately and reasonably (Ashtead-group.com, 2021). Members of the pay committee also study and decide on overall salary packages while adhering to all applicable laws and regulations. The company’s chair is Paul Walker, and the nomination committee has six additional members, and Paul Walker, Michael Pratt, and Brendan Horgan are on the financed administration committee (Ashtead-group.com, 2021). The company’s chief financial officer is Michael Pratt, and its senior independent non-executive director and audit committee chairperson is Angus Cockburn (Huang and Bae, 2018). Jill Easterbrook and Tanya Fratto are independent non-executive directors at Ashtead PLC (Ashtead-group.com, 2021). Two of the most well-known independent non-executive directors are Lucinda Riches and Lindsley Ruth. They aid all of the company’s essential committees in remaining functional and effectively contributing to the advancement of the organismal structure’s development (Ashtead-group.com, 2021). Corporate board members assist the company stays productive by collecting timely, reliable, and consistent information on various aspects of the company’s operations by agreeing to the agendas (David, 2019).
Task 2. The significance of a PESTEL analysis for a firm
The importance of PESTEL Analysis
The ability to compare the external elements of any business, whether it is a startup or an existing one, utilizing the PESTEL framework helps the company to get and acquire all of the essential insights, allowing it to obtain some of the most critical knowledge of any organizational resources (Campbell, 2019). By recognizing changes, the PESTEL framework supports any business in conducting and organizing the understanding of all external aspects and future changes occurring in them (Boddy, 2016). These transitions are frequent and consistent, leading to solid business analysis and the company’s competitive business advantage and long-term viability. The organization’s overall dynamic and successful investigation is critical, and the PESTEL framework can assist in this (Bagchi et al., 2020). The framework’s significance becomes even more crucial when a company operates on a global and international level, which is critical for the organization’s routine usage of PESTEL assessments. Because of the PESTEL framework’s engagement, it is also feasible to understand external forces and their influence within the organization, and how they affect the firm (Baeten and Van Hove, 2021). The PESTEL study’s general framework enables company executives to identify opportunities and dangers, allowing them to function more efficiently based on facts rather than assumptions, which helps with overall organizational development. An organization can better understand market growth and determine the position, potential, and urgent business directions by using the PESTEL framework as a tool to examine the business and organizational unit (Gonzlez, 2019).
The significance of conducting a PESTEL study
Ashtead Group Plc is a United Kingdom-based public limited company. PESTEL analysis is a strategic tool for examining the macro environment of a business. Changes in macro-environmental conditions can have a direct impact on Ashtead Group Plc, as well as other Industrial Goods and Services companies. The Porter Five Forces, which determine strategy and the competitive landscape, can be influenced by macro-environmental issues. They can have an impact on a company’s competitive edge or the Industrials industry’s overall profitability. Other than competing pressures, the PESTEL study provides extensive depth regarding the operational issues Ashtead Group Plc will face in the current macro environment. For example, a profitable industry with a strong growth trajectory will not benefit Ashtead Group Plc if it is located in an uncertain political context.
The element of conducting a PESTEL study allows businesses of all sizes, from tiny companies to large enterprises, to correctly perceive external influences, allowing them to find possible opportunities. If they were found early, the options might be expanded, and risk mitigation could be carried out utilizing the PESTEL framework (Yusop, 2018). The external business environment of every corporation includes political, economic, social, technological, environmental, and legal issues. By recognizing the significant elements and properly incorporating them into the company valuation, the organization can gain a competitive advantage and establish a sustainable firm for long-term profit. One of the many essential components of the PESTEL analysis is the cost efficiency of the framework and the greater insight it gives for the firm (Shtal et al., 2018). IT aids company specialists and the quality management team get business insights into the organization’s and its firm’s external environments and provides alerts for everything that affects the company’s worldwide business performance (Shmatko et al. 2018). The aspect of effective exploitation of business opportunities becomes a possibility with the PESTEL analysis, which helps the company gain business sustainability and creates a practical business environment, which benefits both the company’s members and the people involved in it. When assessing any particular product or service, PESTEL is a measurement instrument that supports and enables the organization to effectively complete the business evaluation within the specified time (Sharko et al., 2017).
Task 3. Analyze the external environment of your chosen organization using the PESTEL framework
Factors in the PESTEL model that influence the external environment
The PESTEL analytical framework includes political, economic, social, technological, environmental, and legal elements. Various things fall under each of these six elements that are incredibly important and contribute to the company’s overall development effectively and form the company’s overall growth. Political factors affecting Ashtead PLC include trade restrictions, tax regulations, tariffs, and bureaucracies (Roy and Chowdhury, 2021). The general element of going or executing internal business operations pushes the organization to take care and monitor its political zones when conducting business beyond territorial borders (Pan et al., 2019). The company mainly operates under the name Sunbelt Rental, and it has approximately 600 locations in the United States and Canada. Divergent viewpoints of different political parties from various countries impact and influence the company’s overall business aspect. Changes in strategy due to differing political views affect policies, trade, and taxation, all of which impact the company and its operations (Nurmi and Niemel, 2018). The financial portion includes interest and exchange rates, inflation, economic growth, and unemployment rates. The company’s economic future is unquestionably one of the essential components and influences on the organization’s overall business.
The social component of the PESTEL framework includes cultural features and views, health consciousness and population growth rates, age distribution, and career attitudes (Needle, 2015). These are essential characteristics of the organization that aid in the company’s ability to efficiently conduct business and comprehend relevant societal understandings heavily influenced by the public. Research and development operations, automation processes, technical incentives, and the rate of change in the general aspect of technology are all technological aspects. One of the many effects that considering technical aspects has is the digitization of the firm for quick and easy accessibility (Morrison, 2020). Finally, external business is influenced by environmental factors such as temperature, climate change, pollution, meteorological conditions, and natural disasters or tragedies. Industry rules, labor laws, license approvals, and intellectual property are all legal aspects that allow companies like Ashtead PLC to operate and set safety standards in their fields (Montoya-Cruz et al. 2020).
Application of the PESTEL factors in Ashtead Plc
Ashtead PLC can benefit from the PESTEL research in some operational areas, allowing the company to successfully contribute to organizational improvement (Kotlyk and Jamal, 2018). Implementing the PESTEL components in the most critical aspects of the organization, combined with the involvement of a strong strategic team, would help the company acquire a competitive marketing position (Huang and Bae, 2018). This section will go over some of the most successful ways to apply each component to the many aspects of an organization’s operations. Trade restrictions, tax rules, tariffs, and bureaucracies, for example, would allow Ashtead PLC to monitor its political areas while conducting business beyond territorial borders. It would also assist the company in anticipating all prospective regulatory concerns, which might help avoid any potential danger that could be detrimental to the company’s entire operations (David, 2019). Economic data such as interest and currency rates, inflation, economic growth, and unemployment rates would allow Ashtead PLC to determine when specific industries are underperforming, and the market is catching up and optimizing. Ashtead PLC would adapt successfully to that piece of knowledge and would not be influenced without any interference (Campbell, 2019). Economic features would allow the company to recognize economic swings and price inflation or deflation, allowing it to respond to the market economy (Boddy, 2016). Cultural features and views, health consciousness and population growth rates, age distribution, and career attitudes are all sociological elements that can help Ashtead PLC successfully identify and recognize changes in their clients or end-users. This may aid the company’s ability to modify or adapt to changes to do business efficiently (Bagchi et al. 2020). Technical aspects such as development efforts, automation procedures, and technology incentives can help determine whether the target market is ready for new products or services to be launched (Baeten and Van Hove, 2021). The legal features and their practical application would enable the corporation to comprehend the rules and regulations that must be followed when selling products to consumers or renting out space to enterprises. Environmental issues should be incorporated into the company’s disciplines so that the organization and its products and services may be viewed in the context of a sustainable and delicate environment. Because change is a global concern, Ashtead PLC would benefit from producing and manufacturing environmentally friendly products (Gonzlez, 2019).
Conclusion
The current business study has thoroughly explored the areas where the PESTEL framework’s factors may be employed in Ashtead PLC’s context, following the framework’s introduction. The framework must be used as an effective instrument for analyzing and evaluating the external business environment by an organization. The current report has benefited from applying and hypothesizing the framework’s characteristics in establishing how effective it may be for Ashtead PLC and how that would help their company. It has enabled the corporation in conducting business operations to effectively understand the external business environment by assisting the company in identifying ways to successfully discover corporate strengths and potential threats earlier in the processes.
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