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PESTLE Analysis to Understand The Environment of Denmark

University: REGENT COLLEGE LONDON

  • Unit No: NA
  • Level: High school
  • Pages: 14 / Words 3411
  • Paper Type: Assignment
  • Course Code: NA
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Question :

This assessment will demonstrate further questions which are like:

  • Explain the PESTEL Analysis of Denmark.
  • Elaborate on the external factors and the Porters five forces analysis.
Answer :
Organization Selected : MTR Crossrail

INTRODUCTION

Business organisation can be defined as those activities which are offering various products and services to the customers in order to earn some profits. (Afzal, 2016). Globalisation refers to the world trade activities that lead the business to perform their work at the international level. In context of business organisation at a global level it is defined as a business action and activity where company exchange their services across the world and in return they get foreign exchange from the buyers. This report is written from the perspective of MTR Crossrail which is developing and extending a railway in the London. It is an agreement between the Transport for London and MTR corporations. Further, this report highlight on PESTLE analysis to understand the environment of Denmark country (Ryder, 2015). Along with this Porter’s five forces will also be considered in this report to analysis the impact of various aspects in country. In the last, plans are extended in the organisation to complete the work in effective manner.

Background of MTR Crossrail

MTR (Mass Transit Railway Corporation) limited works as an organisation who develops various chain for the organisation among all over the world. In the context of MTR size, management employed local as well as international employee’s. Its enterprise is managed as Public state owned enterprise. Their is large scope for MTR to enter into the market of other countries also. This refers most of the present countries are developing their infrastructure due to which better results will be gained by management to perform work with more efficiency and effectiveness. Further, profits earned by organisation in last years is more than $3billion with in a quarter. They are formulating better transport system in the cities that is linked with railway perspective. Crossrail exists as a project in which is used to connect the London from east to west. Further, in the present scenario they are operating existing operations in Hongkong and London (Rogers, 2017). MTR works as an essential project in they employ 1,100 staff that is used to create jobs for local people. In the year 1972, MTR started to perform their business globally. Further, Crossrail project was started in the year 2009.

FDI Opportunity

Denmark is a Nordic country which is officially known as the Kingdom of Denmark. This is based on the Southern part of the world. Foreign direct investment attracts investors to make invest in their country. In the context of, FDI of Denmark the investment in the organisation is increasing with 699.80 billion from the year 2018 to 2019. As compare to the past years the investment of foreign companies is higher than from other years.

MAIN BODY

PESTLE Analysis of Denmark

There are various theories, strategies, policies and framework are present in the market which leads the organisation to analyse and understand the micro and macro environment. Therefore, it is mandatory for company to understand environment condition of a business in order to improve their productivity (Roberts, 2015). So the operations of the organisation are performed by management in effective manner. In the context of MTR Crossrail with the proper understanding of environment it is easy for management to manage their operations at international level.

PESTLE analysis is an essential framework by which it is easy for management to perform their work in a new country. The man purpose of PESTLE analysis is to make strategic plan for the growth of business. It is an essential tool through which marketers are able to analyse and monitor macro environment factors. This results with the exact information of external environment (Bille, 2015). This is easy for management of MTR to complete their work in effective manner in the Denmark. Moreover, PESTLE includes all essential factors such as Political, legal, social, environmental, economical and technological by which management consider all the essential aspect which impacts on the business (Morkovina and et. al., 2016). In the context of Denmark PESTLE analysis from the perspective of international organisation is mention as follow:

Political Factor

In the present scenario, all of the countries are flexible as they formulated their rules and regulation due to which business environment of a country must match with the global business environment. Like in the present scenario, Denmark government are deal their agreement from groups of international parties. Like with the ‘multilateral’ agreement it is easy for Denmark government to build positive relationship with the other countries. This also helps the industries to generate positive relations at global level, due to market area of a business is enhanced. In simple terms, all the rules, regulations, laws and legislation which are stated by government impact on operations of MTR such as use of less natural resources in their project. MTR is already performing their business at global level and as per the existing data Denmark government is also flexible with other countries companies (Liverman, 2016). So it works as positive factor for MTR in order to start their operation and functions in the Denmark. With the positive relations with other countries FDI is also boost because foreign companies invest in Denmark to gain high market share.

Economical Factor

The economy of Denmark is considered as a modern and prosperous that is reached at $353.11 billion in US $. Economic aspects of the PESTLE analysis undertake all those aspects which are related with financial matters of the country. Such as interest rate, inflation rate, tax rate and GDP of a country. Its also impact on profits of organisation like if the salary rates and labour wages are decided by government at high prices then it is complex for MTR to earn more revenue. In the present scenario, the purchasing power of Denmark citizens is impacted due to the financial crisis in several industries. This determines that the competition among industry is intense at international level, while the productivity growth has not increase. Due to which there is total mismatch between prices and quality of products. MTR must make lavish investment in the development of Denmark infrastructure if organisation wants to make their project successful in the market of Denmark (Blandin, 2017). Moreover, it is also a positive factor for companies because FDI enhances the goodwill as well as financial strength of the organisation who operates their business in other countries from their origin source.

Social Factor

There is large difference between the lifestyle of a developing country citizens and developed country citizen. Social factor undertakes the lifestyle of people, values, belief, culture and background of an individual. Level of education for local residents of Denmark is high so it work as positive factor for organisation. Denmark is a modern country with the strong financial position due to which better results are seen by management of MTR. So due to high income people and individuals spend good amount of money to maintain their status. This governs by operations are impacted as good quality services are required by individuals. This governs that the changes among the developing countries are changing very fast due to which more people are able to perform and in dealing with the adoption of modification in society. Like the individual who provide value to their work are positive factor for the MTR. As these individuals leads organisation to boost their productivity by performing their work in appropriate manner. FDI is one of the crucial factors for a country (Hausman and Johnston, 2014). As it is directly related with the economic growth of a country. It is also related with social factor because with the access or entry of foreign companies the employment opportunities, cash flow, skill and capabilities of employees in the country is also increased. This results the work perform by management is done on effective basis. This results better performance is done by management which works as a positive factor for the MTR to adopt the culture value of other persons and to perform business activities in there countries.

Technological

From the several years, technology is introduced at all places due to which all types of business activities are impacted. This determines technology is the most powerful tool which is enhancing the business performance of organisation. Technology is one of the most powerful tools for MTR that is used to boost and makes the project successful. Denmark and its individuals are aware and friendly with technology so it work as positive aspect for organisation to improve their performance. Moreover, all organisation which are performing their business at global level are easily able to perform their work due to implement of technology aspect. Like it helps management of MTR to develop an effective communication channel among the employees. This result it is for management to transfer essential information in short period with more transparency. Foreign direct investment is the another essential aspect by which countries are performing their work at global level with the similar and constant financial growth (Gann, Davies and Dodgson, 2017). So with the better contribution of technology factor MTR completes their all projects in accurate manner.

Environmental

MTR is performing their work at a global level so it is important for them to focus on all those aspects which are related with business. Among this one of the most important factors for business is environment. This determines all the works are performed under the environmental conditions of country. It is also beneficial for business management to perform all work under less emission. In the year 2015, the total GHGs emission only in Denmark is above than the level of Oxygen. Emission of Carbon dioxide is increasing it governs the oxygen level of country is increased. On other side, other local and global companies also need to perform their work as per environment conditions. In context of FDI, if any country is increasing the number of industries in the country, it is also enhancing the pollution in environment (Cramer, 2017). Therefore, the government of Denmark introduced various policies due to which pollution in the country is controlled. This also refers task and operations will be ethically performed if management follow their rules in positive manner. MTR is also aware about all policies and also implementing them due to which business performance is done under the government rules and regulations. This is also beneficial for the MTR as it improves the image of organisation in the country.

Legal Factor

In the Denmark country, there are various task are performed by MTR. So it is essential for management of the organisation to enhance and their work possibilities as per the legislation of country. Further, with carbon emission act, 2006 the government of Denmark is open for new ideas and methods as it enhance economic of country. This governs that there are flexible rules for new organisation so to expand market area legal factors must be implement in all operations. Government rules as well as the MTR authorities are responsible to monitor and check that all the work are performed by management under their rules and regulations (Dodgson, 2015). Further, the transport network among the Denmark is flexible and people are also liberalise because they follow all rules and regulations. This results it is easy for management to complete the work and increase the business size as it is related with business productivity of the MTR (Bullock and et. al., 2017). Similarly, the transport authorities of Denmark and MTR consider there work according to the rules due to which business management perform their work as per the trade policy and price of organisation.

PORTER’s Five Forces Analysis For Denmark

Porter’s five force works as a model which is used to identify, monitor and analyse the five forces which is used to shape the industry effectiveness. This forces are consider as per roles due to which business effectiveness are measured by management in effective manner. Five forces analysis is utilised by management to complete the work to perform as per consideration the management. The main motive to implement Porter’s five forces is used to develop an effective corporate strategy. Further, it is also utilised to manage the work because it is implemented in all segment of the country. Five forces model in the context of MTR is mention as follow:

Threat of New Competitors

The threat of new competition is increasing in the market and also in all industries. As the global business is increasing at international level due to which business management is performing their work through adopting all essential changes in the organisation (Flender, 2019). Competitor are essential part for organisation that leads management to gain top position in market by using all techniques with positive approach. Similarly negative side demonstrate price is impacted due to high competition. In the context of MTR the approach for new competition is low. Further, some points related with this are mention as follow:

  • Legislative barrier such as patents registered by management and trademark are considered as a major barrier for the organisation.
  • Start-up cost to invest and start a transport system is too high due to which other business organisation is not able to enter in the business.

Power of Supplier

Bargain power of supplier is too high as these are the persons which supplies raw-materials and other resources to the MTR. Moreover, with their evaluation it is analysed it work as positive factor as it develop positive relation for customer's. On negative side, operations as powerful supplier not deliver goods effectively. Due to which business management is able to enhance their work as it relates with profit margin of organisation. Like most of the transport system and materials which is used by management of MTR are of good quality due to which business performance is raised or low according to quality of goods. The bargaining power of supplier is also depend on other factors such as size of organisation, conveyance method etc. So with concept of supplier power it is easy for management to look quality and cost aspect in each function of MTR on individual bases (Ayati and et. al., 2018).

Power of Customers

Customers are the most essential part for organisation due to which its business activities is increased and enhance the profits for of the company. Moreover, the power of buyer depends upon the power of industry. Like MTR is operating their business in transport industry. Along with these firms also generates monopoly in market by providing high quality resources to customers. With proper power of customer's it is concerned that it impact on goals and objectives as buyer increase sale of products. Due to which bargain power of customer is low. This results the price is decided by management and customers buy them at any prices because organisation is high in power (Mamic, 2017).

Threat of Substitutes

Substitutes refers to those products which are different from the work but the motive of both products is similar. Like, MTR develops the transport system for railway which is used by individuals to travel from one place to another. Both positive and negative work as a threat because it impact on overall productive of organisation. There are other methods of transport system are also present which are bus, plane and ship, this all works as substitute for railway. So the threat of substitute product is low in market as it impact on goals and objectives of MTR because of monopoly business in market. This results competitive and unique edge is gain by management in market(Gap, 2017).

Industry Rivalry

The level of profits in a particular sector or industry decides the competition in the industry. In the context of MTR, some factors which are related with differentiation of product, productivity capacity and the economics of scale. In the present scenario, competition among industries is low so proper management must be done to perform the work in organised manner. In the last, industry and its competition impact on positive factor as it impact on business and the size of industry. Negative aspect of industry refers to perform of work in increases of competition due to which market share for respective organisation will be decreases.

MTR monitor and undertake all aspects of Porter’s five forces due to which management is able to make effective strategies. This result MTR enhances their business size by making decisions that are related with foreign direct investment. Further, with the above analysis it is also easy to understand market and utilise those technological factor which provides competitive edge to market.

Also read: Consumer Behaviour and Decision Making Journey

CONCLUSION

From the above mention report it is concluded that majority of the business are performing their work at global level. So it is easy for them to increase their business size as well as too earn more amounts of profits through understanding the aspects of FDI. On the other side, to operate business in other country rather than origin PESTLE is a tool or framework which is useful to understand the external environment. In the last, Porter’s five forces is also cover in this to analyse industry situation of a country in which organisation is performing their work. Get more details about assignment help UK from our experts.

REFERENCES

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  • Mamic, I., 2017. Implementing codes of conduct: How businesses manage social performance in global supply chains. Routledge.
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