Business Context

Business
Context

Content Area: Business Context

• Business Environment
• Key Organisational Areas
• Digital support in businesses
• Project Feasibility
• Characteristics of end users
• Digital Value to a Business
• Change Management
• Risk

Stakeholders revision

Stakeholders

Overview of Business Context

In your exams, you must apply an understanding of the
business environment, including the importance of
serving customer, end user and business needs.
You must also apply understanding of how POLITICAL,
ECONOMICAL, SOCIAL, TECHNOLOGICAL, LEGAL and
ENVIRONMENTAL factors can drive the need for change
and use of digital skills technologies.

Defining different sectors

Primary

Secondary

Tertiary

Quaternary

BUSINESS SECTORS BBC

Content Area: Business Context

• Business Environment
• Key Organisational Areas
• Digital support in businesses
• Project Feasibility
• Characteristics of end users
• Digital Value to a Business
• Change Management
• Risk

Business Departments

Production

Research and Development (often abbreviated to R&D)

Purchasing

Marketing (including the selling function)

Human Resource Management

Accounting and Finance.

The new digital business

Business Departments

Production

Research and Development (often abbreviated to R&D)

Purchasing

Marketing (including the selling function)

Human Resource Management

Accounting and Finance.

Activity

You have been asked by your
manager to develop a roadmap
for bringing digital change to
your business.

Identify one way a company can
use digital technology in each
key business department and
explain why it would be a
benefit to introduce.

Production

Research and Development (often abbreviated to R&D)

Purchasing

Marketing (including the selling function)

Human Resource Management

Accounting and Finance.

PESTLE REPORT

ALINECLOTHING

You are going to demonstrate your understanding of PESTLE factors.
You have all been given the same scenario, but will be given ONE
PESTLE factor each to analyse.
You have been given guidance on things to consider.

You will put your findings in a PowerPoint, which you will present to the
class. Use as many slides as necessary to create an uncluttered, well
analysed report on ALine clothing.
If in a group, EVERYONE MUST PRESENT PART OF YOUR FINDINGS

Political factors

Political factors involve the ways and
extent to which a government
intervenes in economies or
industries. A government can impact
an economy through legislation and
policies or through its political
stability and the status of its
relations with other nations. Here
are several examples of political
factors:

•Trade barriers: Trade barriers are regulations that
governments put in place to protect domestic businesses from
international competition. Governments may impose tariffs on
imports or provide subsidies to help boost support and sales
for domestic businesses.

•Tax policies: Businesses must follow numerous tax regulations,
such as obtaining an Employer Identification Number.
Governments may also establish policies that increase or
decrease the taxes corporations pay.

•Political stability: The political stability of a government can
affect businesses in that country. For example, if there are
protests and strikes against government actions, businesses
may see a temporary lull in consumer support.

•International relations: A country's relationships with other
nations can directly impact a business' ability to export and
import goods and services. For example, during a trade war, a
company may not be able to import materials they need from
the other nation involved in production.

• Trade barriers: How might government policy on imports/exxports impact ALine?
• Tax policies: How might tax policies impact ALine e.g. manufacturing, import?
• Political stability: How can political stability/instability impact Aline?
• International relations: What is the relationship like between UK and India? Would it have

a negative/positive impact on ALine?

Political factors to discuss

Scenario: A UK based clothing firm (with twelve
stores) called ALine moved its manufacturing to a
company based in India, as it was more cost effective
than manufacturing the clothes in the UK. They hope
to have an online store soon. Six months later, there
was political unrest in India due to poor wages. Low
skilled workers all over the country went on strike.

Your task: Create a PowerPoint to explain how the
POLITICAL factors below could have impacted Alpine.

financial analysis, risk analysis and strategic planning.

Economic factors can directly impact
businesses' operations and profits. Economic
and political factors may overlap, such as
monetary policies that governments establish.
Economic factors typically include:

•Economic growth
•Interest rates
•Employment rates
•Foreign exchange rates
•Supply and demand
•Cost of raw materials
•Inflation rates
•Consumer spending power

For example: a rise in inflation may
result in a business laying off its
workers to save money. This action
may lead to an increase in
unemployment. Another example is
a decrease in the cost of raw
materials that allows a business to
increase its manufacturing
production, letting it sell more
products.

Economic factors

•Economic growth: How might a strike impact Aline’s economic growth?
•Interest rates: What could happen to interest rates, if a country is unstable?
•Employment rates: How would employment be affected by moving manufacturing abroad?
•Foreign exchange rates: How could foreign exchange rates affect the business?
•Supply and demand: If there is unrest, will this impact supply and demand of goods?
•Cost of raw materials: Will the cost of goods be impacted if they are hard to get, during strikes?
•Inflation rates: If inflation in the country rises or falls, or might it impact Aline?
•Consumer spending power: Does employment rate/inflation/interest rate impact spending?

Economic Factors to discuss

Scenario: A UK based clothing firm (with twelve stores)
called ALine moved its manufacturing to a company based
in India, as it was more cost effective than manufacturing
the clothes in the UK. They hope to have an online store
soon. Six months later, there was political unrest in India
due to poor wages. Low skilled workers all over the
country went on strike.

Your task: Create a PowerPoint to explain how the
ECONOMIC factors below could have impacted Alpine.

Also known as socio-cultural factors, Social
factors involve the demographics, beliefs,
attitudes and traditions of a region’s
inhabitants. These factors help businesses
understand the profiles and motivations of
their potential customers. Businesses can use
these insights to develop marketing strategies
that align with customers' needs and
behaviours. Examples of social factors include:

Social factors

•Cultural trends
•Population growth rates
•Education levels
•Income levels
•Age distribution
•Health consciousness
•Lifestyles
•Career attitudes

Scenario: A UK based clothing firm (with twelve
stores) called ALine moved its manufacturing to a
company based in India, as it was more cost effective
than manufacturing the clothes in the UK. They hope
to have an online store soon. Six months later, there
was political unrest in India due to poor wages. Low
skilled workers all over the country went on strike.

Your task: Create a PowerPoint to explain how the
SOCIAL factors below could have impacted Alpine.

Social Factors to discuss

•Cultural trends: What changes in people’s view, values or customs might impact ALine?
•Population growth rates: How might Aline contribute to India’s population growth rate?
•Education levels: How might education levels in India or UK impact ALines’s business choices?
•Income levels: How might income levels in India impact ALine and UK?
•Age distribution: How might this impact their business model?
•Health consciousness: How might well-being impact ALine?
•Lifestyles: How might customers’ preference for shopping options impact ALine?
•Career attitudes: How might employees’ career goals impact ALine?

Technological factors

Technological factors represent how
businesses and industries use technology to
produce and sell products and services or
run operations. Businesses that stay
updated on technological advancements
can use them to develop and improve their
strategies and processes.
For example, if consumers find it easier or
preferable to purchase items online, a
business may decide to refocus its efforts
toward an online store rather than a
physical storefront. Alternatively,
advancements in automation can help
manufacturers streamline production
processes and produce more goods at a
time.

Beyond advancements,
technological factors may also
include consumers' access to the
following:

•Technology
•Technological infrastructure
•Emerging technologies
•Automation
•Research

Scenario: A UK based clothing firm (with twelve
stores) called ALine moved its manufacturing to a
company based in India, as it was more cost effective
than manufacturing the clothes in the UK. They hope
to have an online store soon. Six months later, there
was political unrest in India due to poor wages. Low
skilled workers all over the country went on strike.

Your task: Create a PowerPoint to explain how the
TECHNOLOGICAL factors below could have impacted
Alpine.

•Technology: E.g. How could ALine use technology to develop their brand?
•Technological infrastructure: How can ALine develop their infrastructure, to
improve collaboration with the manufacturing firm in India?
•Emerging technologies: What new technologies are available to improve internal
processes?
•Automation: What process can be automated to save time and money?
•Research: How can ALine use research to develop their market brand and share?

Technological factors to discuss

Legal factors

LEGAL factors are the laws of the country in which a business resides.
These laws may overlap with other factors, particularly political factors, and
can impact how businesses in that country operate. As a result, businesses
must stay updated on legislation changes to ensure adherence to local and
national laws. Here are some examples of legal factors:

•Health and safety: Health and safety laws and
regulations require businesses to follow practices
that ensure the health and safety of employees and
customers.
•Equal opportunities: Equal opportunity laws
prohibit discrimination during the hiring process or
in the workplace.
•International trade: International trade laws may
regulate what businesses can import from and
export to other countries.
•Advertising standards: Advertising laws set
standards for how businesses advertise their
products or services, such as requirements that
these ads must contain truth or evidence to support
claims.
•Consumer rights: Consumer rights laws hold
businesses accountable for maintaining consumers'
rights, such as information privacy and safety.

•Product labelling: Product labelling laws require businesses
to label food and medicinal products accurately and notify
consumers of their contents.
•Product safety: Product safety laws require businesses to
ensure their products are safe for consumer use and provide
warnings as needed.
•Labour laws: Labour laws might include things like minimum
age and minimum wage for employees, as well as the
maximum number of hours an employee can work in a shift.
Businesses must adhere to labour laws to ensure they provide
proper treatment to their employees.
•Environmental laws: Governments usually require that
businesses, especially those in the automotive, agriculture
and chemical industries, adhere to regulations that protect
the environment from toxins and pollution. For example, an
environmental law for clean air may push a company to limit
its emissions.

Here are some examples of legal factors:

Health and safety: E.g. Would ALine face any legal issue if there was a H&S problem in India? What are their
responsibilities to their UK staff and customers to comply with H&S legislation?
Equal opportunities: What are the current for compliance in this legislation?
International trade: How might trade laws impact import their clothes from India?
Advertising standards: What standard do their need to follow when promoting their brand?
Consumer rights: What rights do in-store and online consumers have? How does this impact Aline?
Product labelling: E.g. Are there any import taxes imposed for labelling clothes in India?
Product safety: What product safety considerations should there be in UK and India?
Labour laws: How might employment laws in India impact Aline?
Environmental laws: In what ways does ALine have to contribute to the protection of the environment?

Legal factors to discuss

Scenario: A UK based clothing firm (with twelve
stores) called ALine moved its manufacturing to a
company based in India, as it was more cost effective
than manufacturing the clothes in the UK. They hope
to have an online store soon. Six months later, there
was political unrest in India due to poor wages. Low
skilled workers all over the country went on strike.

Your task: Create a PowerPoint to explain how the
TECHNOLOGICAL factors below could have impacted
Alpine.

Environmental factors

Environmental factors involve the
impacts that changes in the natural
environment can have on
businesses. For example, a scarcity
of timber due to deforestation may
affect businesses in the construction
and real estate industries because
timber, a crucial construction
material, will become more
expensive.

Environmental factors may
also overlap with social factors.
For example, if customers care
more about recycling,
businesses that use recyclable
materials in their products may
encounter more success.

SOME FACTORS: Weather, Scarcity of raw materials, Pollution, Climate change, Waste
disposal, Agriculture, Sustainability practices

•Weather: Is India prone to bad weather conditions that can impact Aline’s manufacturing?
•Scarcity of raw materials: What would happen if weather damaged cotton production in India?
•Pollution: Are there any pollution issues with manufacturing in India?
•Climate change: Do Aline have any responsibilities linked to climate change?
•Waste disposal: What obligations does ALine have regarding waster disposal?
•Agriculture: Can you find any links to agriculture? Research agricultural factors that could affect ALine.
•Sustainability practices: What considerations must ALine make to achieve sustainable practice?

Scenario: A UK based clothing firm (with twelve
stores) called ALine moved its manufacturing to a
company based in India, as it was more cost effective
than manufacturing the clothes in the UK. They do
not have an online store soon. Six months later, there
was political unrest in India due to poor wages. Low
skilled workers all over the country went on strike.

Your task: Create a PowerPoint to explain how the
TECHNOLOGICAL factors below could have impacted
Alpine.

Technological factors to discuss

REFERENCES

What Is a PESTLE Analysis?