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,
John Lewis will benefit from this because more people have access to the internet. The business has seen a large increase in their online sales and they sell a range of computers and tablets such as the iPad. This is because of the rising popularity in these items and the access that people have to the internet.

Legal factors include what is happening with changes to legislation. This may impact on employment, access to materials, resources, imports/ exports, taxation etc.

John Lewis must check leaflets, adverts etc because advertising must be accurate and it must not mislead the public. They must go by this because it’s part of the Trade Descriptions Act. As a business they must provide a safe environment for employees and customers, so they are kept safe. This could increase John Lewis’s costs because more training may be needed such as Health and Safety. This is part of the Health and Safety at Work Act.

Environmental factors include what is happening with respect to ecological and environmental issues.

The rising petrol costs can affect John Lewis and other businesses because of the transport costs that deliver products to each store. This can affect John Lewis because if the transport costs rise then the price of goods will have to rise. Also John Lewis gives out carrier bags that are recyclable but many businesses are now charging for carrier bags.
Climate change is the biggest environmental challenge we face today. Rising global temperatures