In order for an organization to make effective decisions and plan effectively, the organization must be able to have a thorough understanding of the wider meso-economic and macro-economic environment where it operates. Meso economic environment is that environment where the business operates but has limited influence over. Macro-economic environment, on the other hand, includes factors that impact an organization, but the organization has no direct control. Understanding these factors is very important for an organization since it makes it possible for an organization to take advantage of the opportunities available and minimize the risks that an organization may encounter. Conducting PESTEL analysis entails scanning these environments to spot and understand the broad and future trends (Burgemeister 2003, p. 13). PESTEL analysis acts as a useful tool for understanding the business environment in which an organization is operating. For example, PESTEL analysis helps an organization understand risks associated with market growth or decline. This is important because it helps an organization in making a decision as to whether to venture in a given market or not. For instance, before newspaper business can venture in the British newspaper industry, it is crucial for that company to conduct a PEST analysis. The analysis will help the company have a good understanding of the British newspaper industry in light of the politics at play, economic situation, socio-cultural, technological and environmental issues involved. If the PEST analysis shows the British environment to be conducive for business, then the company can go ahead to establish a business in the country, otherwise, the company will stop making such a move to avoid risks revealed by the PEST analysis (Burgemeister 2003, p. 15). PEST analysis also acts as a useful business orientation tool. In this regard, PEST is used to establish when the organization or product is with regard to what is taking place outside that might affect activities taking place inside an organization at some point in time (Burgemeister 2003, p. 15). PEST analysis for the British newspaper industry Political Britain is one of the countries that enjoy strong political stability in the country. The political stability enjoyed in the country has created a conducive environment for doing business. The newspaper industry, in particular, has enjoyed growth in Britain due to political stability. In fact, the British government usually promotes the growth of the newspaper since it is used as a means of communicating with the people. Nevertheless, there has been a growing move by politicians and celebrities in the country to have control of newspapers. This follows a recent Royal Charter that proposed regulation of the newspaper industry (IBISWorld 2013). This kind of political interference is posing a real danger to the industry that has enjoyed freedom for decades. Despite the move by politicians to regulate the industry, the future of the newspaper industry in the country remains bright. Economical British is one of the countries that have suffered most from the financial crisis accompanied by a recession that rocked the country in 2007. The newspaper industry is among the sectors that have been worse hit by the recession.
Market Analysis of the Newspaper Industry