As many of us appreciate, sound business strategy takes into account the wider macro-environment framework within which a business operates, with this succinctly being summed up by the acronym PESTLE. In 2021, it could be argued that the influences imposed on businesses by the external environment have never been stronger or the over-riding reference point for decision-making, so what should you be considering?
Businesses need to consider overall Government stability and specific strategies with regard to the pandemic, the equipping of the NHS, taxation, grants, funding and initiatives to support the economy. Additionally, there are Brexit impacts and other global supply challenges to consider. The reactions of trade bodies and industry-specific laws and policies cannot be ignored, with a good example being the new Agriculture Bill. Any upcoming elections or advances in the Scottish independence agenda are also important. Growing young adult activism is a trend to monitor closely.
The economy and the COVID recovery plan are top of mind for many, as are national debt levels and ways to encourage consumer spending. Current and future Government spending and interest rates need to be considered, alongside exchange rates and tariffs. Budget announcements may well be significant, whilst inner city business decline is evident.
Our lives and values have changed during the pandemic, resulting in new lifestyle and consumer trends. Our relationships with digital technologies have strengthened and our faith in social media channels, rocked by fake news. Ethical issues have come to the fore and the way in which brands are viewed has changed. Our demographics have also shifted slightly, due to the pandemic and Brexit.
Technology take-up and usage have soared during the pandemic and new AI and other emerging technologies tempt with their competitive advantage possibilities but also come with cyber threats. A Fourth Industrial Revolution is predicted, but are you ready? There is much funding to be accessed and e-commerce will continue to grow exponentially, as consumer purchase behaviours alter and global communication and virtual working boom.
Employment, Health & Safety and Commercial Law will continue to be the framework in which businesses operate and we can anticipate that environmental legislation will continue to increase. New trading policies already support post-Brexit trading and regulatory bodies may strengthen their powers – as we have seen with the FCA winning its Supreme Court case against leading insurers. Pandemic-influenced legal scenarios and employment legislation will need to be carefully considered, with an avalanche of litigation predicted.
Our climate change concerns have heightened and people expect businesses to do the right thing within society, through informed corporate social responsibility practices. The war on plastics continues apace and consumers – particularly Millennials, are particularly concerned about corporate footprints, renewable energy and sustainability.
Once you’ve debated and concluded the relevant external factors for your business, organisation or charity, the next step is to assess how well placed you are to deal with them; survive and even thrive going forward; we call this an internal strategic analysis. How best to do this? See our next strategic blog during February.
There is much more to say about 2021’s challenges and we are here to help you through them, with all the resources you require in what could be one of the most challenging business years we have ever experienced, please get in touch, if you need help.