Orange Business Analysis
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PESTEL
Industry competition is exercised in the context of an external environment that influences the behavior of operators (supply and demand). The PESTEL framework is an analytical model of the external environment. Each letter of the PESTEL framework corresponds to a field of analysis: Political, Economic, Social, Technology, Environmental and Legal aspect. The objective of the PESTEL analysis is to identify the present and future impact of these environmental factors on the actors. Attention is focused on structural changes (trends and sustainable) as opposed to economic events. As consultants, our aim is to give you recommendations and create strategies that take several macro-environmental factors into consideration, so that the strategy formulation process will be as sensitive to current and future environmental factors as possible.
To ease the reading, the following analysis will be divided into five factors which are also split into two parts; regarding the strength/opportunity aspect as opposed to weakness/threat aspect when it is appropriate. For each statement, an in-depth analysis of what your group should pay attention is provided (mostly the positive or negative effects)
Political factors:
Strength/Opportunity:
The BEREC (Body of European Regulators for Electronic Communication) was created in January 2010 in order to monitor and ensure the development of the market of networks and electronic communications services. It is an opportunity because it will ensure the dynamic of the market, stimulate competition and provide support to operators to ease the development of internet and mobile access, and to general extent the penetration of new digital services in poorer (often outlying) EU regions. Moreover, given the high quality and respectfulness of your services, BEREC will release positive statement towards your development, resulting in free positive communication about Orange Group.
Economic factors:
Strength/Opportunity:
According to ARCEP, there is an increase in household consumption of communication services over the medium term. This is a positive effect, because it implies that the consumers will be willing to adopt new and more developed offer in parallel with their current consumption.
Social factors:
Strength/Opportunity:
ARCEP(2012) pointed out the growth in behavior of nomadism and therefore the development of mobile phone and related services such as mobile web etcIn parallel, the year 2011 is marked by a continuous increase in the penetration rate for internet services. Besides, it seems that there is a bandwagon effect and race for new mobile phone models, and especially from youth population. Not to mention that one of the most typical index of demography has also a positive impact, knowing that the population growth in France is in favor of increasing the number of subscribers. Those trends will lead the Group to engage actively its Orange Labs in research and development, in order to meet the potential growth of the demand. It is also judicious to mention that there is an increase in the development of social network and creating a community help people to feel good even at work. Knowing that Orange has faced many social issues previous years ago, it could be interesting and strategic to think about implementing such tool within the company.
Weakness/Threat
Concerning the threats or weaknesses, it is stated that there is a high rate of equipment on the segment of mobile phone, and a decrease in the purchasing power