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South Zealand Business College

HOH Water Technology A/S Finland


An understanding approach to company environmental analysis using PESTEL framework

Prepared by:

YouvrajThapaliya

Environmental analysis using PESTEL tool

Key words:
Environmental analysis, competitive advantage, PESTEL framework

Introduction:
HOH water technology A/S was founded in 1987 as a water treatment Specialist. The main mission of the company is to provide clean water to the customer needs. The company other activities include s, water treatment equipment and facility design,importation,manufacture,maintenance and sales. Taking Finnish market into consideration, t he main target of this report is to analyse the present and potential market share of the HOH products/service in local Finnish market; in terms of itswide product range and service.Therefore, it is importantto analyse the external environmental factors that influencesthe organizational goals and objectives in its industry frame.Hence, because of its peculiar behaviour, PESTEL analysis is taken as an appropriate and one of the key external environmental analysis tool; in understanding the wide range of external factors that interacts with the HOH organizational daily business practices.

Analysis:
PESTEL framework can be useful tools to begin as an environmental analysis, concerning the wide external environmental factors,that influences the organization in wide terms. Hence, PESTEL checklist, whichconsists of the Political, Socio cultural,Technological, Environmental and Legal aspects of the environment are explained below. Political: Given the external paradigm in the PESTEL, political factors;because of its nature and the capacity to directly Influence in the corporate business practices, it is one of the most influencing elements while examining the external environment of the organization.Arguably; the future of the business enterprises lies upon the various political variables; ranging from the nations political stability, change in local government rules and regulation, government attitudes towards enterprise, tax laws, interrelation between government and organization, intervention strategies,

Environmental analysis using PESTEL tool competition and so forth. Examining the HOH history in Finland, it has never encountered such situation from the politics spectrum. Additionally, the nature of the Finnish politics is stable, and good democracy practises. The Finnish political influence towards Multinational Corporation can be experienced as empowering and foreign investments are welcomed. Some of the key points to be noted are: HOH has a solid foundation history and good relation with local government HOH enjoys awide network among the corporate and government bodies. Economic: Minimum, the future of an organization lies upon its successful achievement in terms of financial capabilities and revenue growth. So far, HOH has achieved a good economic growth, increasing market share, and therefore; it can be forecasted that , it will have a speeded market share in the coming future. Despite the Finland stable GDP, lower unemployment rate (8.2% as of January 2011) and stable currency (Euro) which means; atleast stable or increase in Finnish citizens purchasing capacity. Also, HOH huge investment in R&D and improved market strategies, the future of HOH market share in broader Finland can be predicted as healthy achieving and gaining strong competitive advantage. Social: Today, environmental issues such as; climate change, global warming and sustainability have been one of the most arguable topics of debate and discussion in corporate world. Organizations are not seen as an individual entity, but rather , it exists in broader political, social and environmental contexts. Therefore, being a social entity, it should exist as an essential enterprise having a good social and corporate responsibility for its wider stakeholders. HOH Finland has incorporated a good environmental strategy for instance, HOH water management, corporate sustainability issues and other green initiatives, by which a company can not only gain financial achievement but rather can gain company reputation, branding and sustainable competitive advantage in the longer term.

Environmental analysis using PESTEL tool Technology: HOH was the first company to introduce a reverse osmosis plant with built -in energy recovery with efficiency larger than 95% (HOH, 2011). Like other terms, technology plays a vital role in todays organization performance. In the adoption of modern technological inventions, todays organization can benefit from the core technology, in terms of easy operations, transformation of its services, reducing cost and innovative initiatives in its product and service. HOH Finland stands as a core competitor in its industry frame, in not only adopting the technology, but also investing in R&D and other inventions . Environmental: Business corporations are one of the major contributors of CO2 emissions and causing massive destruction leading to climate change, global warming and other environmental destruction. Therefore, it has to consider environment as equally important entity as other factors. Arguably, environmental issues can be the core element for the success and branding for todays and future business enterpri ses. Environmental issues should be viewed not only as a threat, but it can be used as an opportunity for organization efficiency and competitive advantage. HOH states that HOH has specialised in supplying standard water treatment systems to smaller industries and service businesses that have seen the necessity of having a high level of water quality in order to be able to supply high -quality products and services at a competitive price (HOH, 2011). Legal: Depending upon the differing national rules and regulation, organizations are subjected and bound with the local government legislations and legal bindings. It ranges from local employment rules, safety issues, CSR, Competition law etc. Likewise, HOH Finland has successfully incorporated the local Finni sh law and will be able to follow the future rules and regulations if further changed. This shows HOH Finland a fully competitive organization with respect in implanting the legal bindings that Finnish government has to offer to the local business enterprises.

Environmental analysis using PESTEL tool


Preliminary Concusion: We believe that the PEST analysis is relevant to HOH because it enables us as researchers to see the macro environment factors, which help us to evaluate the attractiveness of the market for marketing our product.

Industry Analysis:
Market size and potential can be assumed through the number of potential customers available and volume production within the targeted industry. For HOH market size and potential can be estimated through the possible market segment like, juice, soft drink and bottle drinking water,and non -alcoholic product producers. Through their production volume and their key ratio we can understand the customer size. HOH water technology was established with the target to provide only quality products and guaranteed services treating their customers with responsibility to all aspects concerning water treatment plants for domestic use. Through their knowledge and with high quality products their target is to provide the customers with customized solutions on water filtration, purification and softening. Finland market is already developed in cold and soft drinks industries and HOH is new player.

References:

Environmental analysis using PESTEL tool eStandard Forum (2009) Business Indicators Summary [online] available fromhttp://www.estandardsforum.org/finland/business -indicators?id=149Accessed [25/05/2011]

HOH (2011) Desalination of seawater, Energy Recovery [online] available from http://www.hoh.com/07_sektorer/swro.htm Accessed [25/05/2011]

HOH (2011) Standardized products [ online] available fromhttp://www.hoh.com/09_Organisation/about_us.htm Accessed [25/05/2011]

Statistics Finland (2011) [online] available from http://www.stat.fi/til/tyti/2011/01/tyti_2011_01_2011 -02-22_tie_001_en.html Accessed [25/05/2011]

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