Portfolio Task 02: Business Environment

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Table of Contents
Introduction...................................................................................................................3
Portfolio Task 02: Business Environment.....................................................................3
1.1 Political................................................................................................................3
1.2 Economic............................................................................................................3
1.3 Social..................................................................................................................3
1.4 Technological......................................................................................................4
1.5 Legal...................................................................................................................4
1.6 Environmental.....................................................................................................5
Conclusion....................................................................................................................5
References...................................................................................................................6

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Introduction
PESTLE analysis is a tool used for analyzing the impact of various factors on a
product or service. In PESTLE analysis P stands for Political, E stands for
Economic, S stands for Social, T stands for Technological, L stands for Legal and
E stands for Environmental impact on a product or service (pestleanalysis.com,
n.d.).

Portfolio Task 02: Business Environment

PESTLE analysis of Famous Thermal Spa is given below:

1.1 Political
Political factor is the impact or influence of decision making and state of a
government on a product or service. Political stability is good for business
environment. Unstable political condition may have adverse effect on the economy of
a country or region. For Famous Thermal Spa some political factors may have
significant impact on the business. If the government increases tax on the equipment
and materials needed for thermal spa, the cost of thermal spa will increase. This can
result in lower margin or higher price. Higher price can discourage the customers.
Other political factors which may influence the course of business are- fiscal policy,
political stability and so on (oxlearn.com, n.d.).

1.2 Economic
Economic factor is the impact of the economic condition on a product or service. Bad
economic condition discourages business operation to a great extent. Economic
condition determines the purchasing power of the customers of a given area. For
example, inflation will affect the price of Famous Thermal Spa. If the price increase
famous thermal spa will get less customers. We know that when the price goes up
demand for the product or service goes down. On the other hand, deflation will
increase the purchasing power of the customers. Other economic factors which may
affect the spa business are- economic growth, interest rate and so on (oxlearn.com,
n.d.).

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1.3 Social
The impact of society, culture and traditions are included in the social factor. The
business idea Famous Thermal Spa may not be accepted by every society. For
example, spa business may not have a good profit in the conservative societies. On
the other hand, in a society where people are conscious about their health and
beauty may accept the spa business. While implementing the spa business the
analysis of cultural values and traditions should also be kept in mind. If the people of
the society have a positive attitude towards the business, the business can flourish.
If they have a negative attitude the business may face difficulties (oxlearn.com, n.d.).

1.4 Technological
Technological advancement and use of technology is a huge factor for producing
goods and services according to customers need. Technological changes highly
affect business at the present age. In thermal spa business new machines and
methods can ensure good service. On the other hand, advanced technologies used
by the competitors can be a threat to the business. The technological advances can
be automation of the process, more effective method, research and development
and so on. Some advantages of technological innovation are:

Greater efficiency
Better customer satisfaction
Better operation
Overall cost reduction

In spite of all advantages adoption of new technologies can lead to increase in cost
(professionalacademy.com, n.d.).

1.5 Legal
Legal implications are needed to be fulfilled while operating a business. The legal
issues of Famous Thermal Spa are:

Employee rights
Business regulations
Discrimination act
Employment act
Health and safety act
Customer rights

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Legal requirements are helpful in running the business in the right direction. Though
some of the laws implemented by the government can be barrier for the business.
Famous Thermal Spa has to ensure all of the legal regulations are met properly to
ensure good reputation (oxlearn.com, n.d.).

1.6 Environmental
The environmental factors are related to the impact of the business operation on the
environment. This factor is less important for Famous Thermal Spa because
thermal spa is not the type of business which will have adverse effects on the
environment. Though the machines used in spa can generate some heat which can
be bad for the environment. Energy consumption is another issue regarding the
environment. Because less energy consumption means less disturbance to the
environment. Another factor regarding environment can be waste management of
Famous Thermal Spa. Dumping the waste without proper planning can have effects
on the environment (oxlearn.com, n.d.).

Conclusion
PESTLE analysis is a useful tool for finding the important factors that influence the
success of a product or service. For Famous Thermal Spa political, economic,
social, technological and legal factors are important (mindtools.com, n.d.).

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References
mindtools.com,
Available

n.d.
at:

PEST

Analysis.

[Online]

https://www.mindtools.com/pages/article/newTMC_09.htm

[Accessed 28 August 2016].

oxlearn.com,
Available

at:

n.d.

PESTLE

Macro

Environmental

Analysis.

[Online]

http://www.oxlearn.com/arg_Marketing-Resources-PESTLE---Macro-

Environmental-Analysis_11_31
[Accessed 28 August 2016].
pestleanalysis.com, n.d. What is PESTLE Analysis? A Tool for Business Analysis.
[Online]
Available

at:

http://pestleanalysis.com/what-is-pestle-analysis/

[Accessed 28 August 2016].

professionalacademy.com, n.d. MARKETING THEORIES PESTEL ANALYSIS.
[Online]
Available

at:

http://www.professionalacademy.com/blogs-and-advice/marketing-

theories---pestel-analysis
[Accessed 28 August 2016].

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