1. Political(1)Policies to reach energy efficiency. In order to reduce carbon emissions and avoid inefficient use of resources, the UK government formulates policies to reduce carbon emissions from buildings.
These policies are stated in the National Planning Policy Framework (www.gov.uk). One policy states that new buildings are required to be energy efficient. Another policy says that new homes should be zero carbon in 2016, and all buildings should be in coincidence with the content of the policy. (2)Political stability. Most countries have strong desires to be peaceful. The Great Britain has been a member of the European Union for many years, which could have positive impacts on the political stability.
(1)High GDP. The UK has one of the highest GDP per capita in Europe (MarketLine, 2013:16). According to the statistics in the MarketLine (2013), the GDP remained constant from 2010 to 2012, and it is forecasted to increase to 2.43 in 2014 (p.46). Thus, it indicates that companies doing business in the UK are likely to gain profits (Please refer to the figures titled GDP and GDP Growth Rate in the middle of the poster).
(2)Great investment environment. The World Bank’s Doing indicators tell us that the UK is the seventh best country in the world to do business (MarketLine, 2013: 16). Thus, there is a tendency to say that the UK is a great investment environment. (3)The reduction of corporate tax rate. In the UK, the corporate tax rate fell to 23% in April 2013, and it will probably keep on declining to 20% in April 2015 (MarketLine, 2013:17). With the reduction of tax rate, firms are more likely to expand their business and gain more profits. However, some new entries should have strong desires to enter the market.
3. Social(1)Lifestyle Change. The UK puts its emphasis on encouraging and improving the quality of R&D. According to MarketLine (2013), gross expenditures on R&D were £26.03 billion in 2010 and £27.4 billion in 2011(p.3). Therefore, it is easy to deduce that the UK customers are more likely to buy innovated products nowadays.
|Year |2010 |2011 | |Gross Expenditures on R&D |£26.03 billion |£27.4 billion |
(2)Employees with great academic backgrounds. It is known to all that the UK has many highly reputable universities. The Times Higher Education World Reputation Rankings in 2013 names four UK institutions in the top 20 universities around the world (www.timeshighereducation.co.uk). Employees with great academic backgrounds play an important role in boosting the development of the technology in the UK.
4.Technological：(1)Just in Time. JIT uses computerized system to manage the flow of production. With the use of JIT, Portakabin could establish relationships with suppliers, control stocks efficiently, increase stock accuracy, and deliver goods on time. The use of JIT ends up in the result of lean production. Lean production itself is a result whose aim is to reduce the quantity of resources used that might encompass labor, materials, space and time. It can also bring the company towards squeezed levels of waste and inefficiency that tend to be environmentally beneficial.
(2)Innovation. Portakabin uses a new type of insulating foam to cut out waste.
In addition, tools used for transporting products are recycled throughout the supply chain.
5.Environmental(1)Natural environment. The poor weather conditions in the UK can lead to the delay of construction process. Moreover, environmentally-friendly materials (like ozone-friendly materials) and renewable energy to construct buildings are desirable in the society. So, Portakabin should take social responsibility for creating less pollution.
(2)Construction sites and locations. Customers consider many factors (like less traffic pollution, less noise, convenient transportation, and wider local community, etc.) when they choose accommodations or workplaces.
(3)Influences from other competitors. Leading companies in construction & engineering are Kier Group, Morgan Sindall Group, Balfour Beatty, and Carillion (MarketLine, 2013: 3).
(4)Potentials for sustainable development. The government encourages that construction companies should comply with the following requirements (www.businesscasestudies.co.uk): • Consumption of less energy and generation of minimum waste • Utilization of renewable resources whenever possible • Reduction of the negative impacts on occupants and other related parties
6.Legal(1)The Health and Safety (Consultation with Employees) Regulations 1996. It states that the company must ensure the health and safety of its employees and customers (www.legislation.gov.uk).
(2)The Construction (Design and Management) Regulations 2007. The regulations place specific duties on clients, designers and contractors to ensure health and safety (www.legislation.gov.uk).
(3) Part IV of the Environmental Act 1995. It sets up such regulations regarding air quality protection in the UK (www.legislation.gov.uk). (4) The Air Quality (Standards) Regulations 2010. It transposes into the English law requirements of Directives 2008/50/EC and 2004/107/EC on ambient air quality. Equivalent regulations have been made by the devolved administrations in Scotland, Wales and Northern Ireland (www.legislation.gov.uk).
Conclusion: In conclusion, the company has to put its concern into how to respond to these external factors. Based on PESTEL analysis, our group agrees that Portakabin should continue using lean production to gain competitive advantages in the construction industry. The first reason is that customers are more likely to use innovated products as a result of their lifestyle change. In addition, the use of lean production is environmentally-friendly, which could help the company comply with these legal regulations. Lean production is also a wise choice for Portakabin to reduce waste and cost.
Reference1.Country Analysis Report: United Kingdom, In-depth Pestle Insights. Available from: http://advantage.marketline.com.ezproxyd.bham.ac.uk/Product?pid=ML00002-031 [Accessed on 23 August 2013].
2. Construction & Engineering In the United Kingdom. Available from:
[Accessed on 23 August 2013].
3. Improving the Energy Efficiency of Buildings and Using Planning to Protect the Environment. (2013) Available from: https://www.gov.uk/government/policies/improving-the-energy-efficiency-of-buildings-and-using-planning-to-protect-the-environment [Accessed on 24 August 2013].
4. Protectecting and Enhancing Our Urban and Natural Environment to Improve Public Health and Wellbeing. (2013) Available from: https://www.gov.uk/government/policies/protecting-and-enhancing-our-urban-and