Analysis of a local business

PESTE Analysis:

Case study Telus Corp

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Introduction

Businesses' operations are affected by two distinct environments, that is, internal factors and external factors. External factors are forces outside a company that has a positive or negative impact on the success and existence of the business. These are factors that are beyond the control of the business.

PESTE analysis is a strategic tool that helps analyze the different types of external factors. The company's operations can be affected by political, economic, social, technological, and environmental factors.

Company overview

The company under discussion is Telus Corp, a Canadian multinational public company dealing with Telecommunication Information Technology Consulting Health Safety Security. It was founded in 1993 and has its headquarters in Vancouver, Canada, providing various products and services in wireline and wireless segments. It is the parent company of other subsidiaries such as Telus communication, Telus health, Telus Mobility, and Telus International.

Telus communication deals with data, internet services, and television services. Telus health handles companies that are related to health worldwide. It connects patients with a physician through a mobile app, which allows patients to receive virtual treatment. Telus mobility is a wireless network operator which sells wireless services in Canada. Finally, Telus International is a multilingual digital customer experience provider and digital IT solutions to global clients (Talus Corp, 2021).

Like any other business organization, Telus Corporation is faced with various forces in the surrounding environment. Taking a deeper look at these external factors, the following paragraphs will coherently discuss how each element affects the operation and success of Telus Corporation.

Political factors

These are factors related to the government authorities of the jurisdiction on which the company or organization is based. In most cases, a company is affected by the laws or policies implemented by the government at which the registered office is located. Various political factors affect a business in its external environment. This means the company cannot control the forces generated outside of it.

One of the factors under this classification is political stability. High political stability provides a friendly avenue to run a business with predictable market trends. This impacts the company positively, with the firm increasing its productivity. On the other hand, political chaos deters investors from investing in such an environment. Telus Corporation is currently present in different countries which have their political tensions. Growing tension can affect industry growth and limit opportunities available to Telus Corporation.

Another political factor that influences the business environment is tax policy which refers to the choice made by the government on the amounts to be levied, who to assess, and when the payments are to be made by businesses and individuals to the tax authorities. The government charges a specific percent on the profits made by the company in its everyday operations after a given accounting period. Political factors have a vital role in shaping the processes of Telus Corporation in terms of its profitability in a particular market or country. Telus Corporation has been exposed to more than one political environment and system risks as they have operations in many countries. Understanding this, Telus Corporation can try as much as possible to diversify these systematic risks of the political environment.

The second element under the political factors affecting Telus Corporation's business environment is labor law. This refers to the rights and responsibilities in employment, particularly in the relationship between the employer and the employee. The employer has to ensure the employees are treated as per the provisions of the labor laws in the region in which the business is established.

The third element in the political factors of a business environment that may affect Telus Corporation is trade restrictions. There are restrictions placed by the government preventing certain activities in the course of business transactions. More so, Telus Corporation has to look at other factors such as the risk of military invasions, level of corruption, favored trading partners, and the Anti-trust laws related to wireless communications in the market they choose to operate in.

Based on the political factors outlined, Telus Corporation has various strengths concerning aligning the organization's culture to the political aspects. One of the areas in which the Telus Corporation establishment has aligned with the factors is having strong distribution networks that have changed the relationship between China and Canada. By complying with quality standards, the company has reduced the costs of lawsuits and forfeiture of licenses.

However, some current challenges are affecting Telus Corporation! This corporation has failed in integrating its subsidiary forms with different culture and political systems. Also, the business faces a massive challenge in market development with a bad reputation for employee treatment.

Compared to other competing organizations, Telus Corporation has a more effective employee attrition rate and has spent many resources in training and developing its employees. In the future, Telus Corporation is likely to benefit through increased revenue by the adjusted sales tax policy. The new policy can guarantee a great and bright future for Telus Corporation as it can impact the company's operations and open new opportunities, hence increased profitability. This creates an opportunity for businesses such as Telus Corporation to earn more profits in the future if they sell more of the two products individually as there is a reduction in the overall amount of amounts paid as taxes. The company faces risks such as a change in tax policies and labor laws, resulting in the telecommunication business losing the current income status associated with current tax provisions.

Telus has challenged Canadian law: "A majority of judges in the 4-3 decision ruled an Ontario judge erred in allowing Avraham Wellman to be included in a class-action case against Telus even though he was a business customer of its mobile phone service.

Telus had argued Ontario's consumer protection law didn't apply to business customers like Wellman, and he had to abide by his contract's provisions for deciding disputes outside of the court system, through arbitration." CTV News, 2019)

Economic factors

Economic factors refer to the forces in the economy that influence the buying patterns and habits of consumers. Consumers being the most significant determinant of sales made by any given business associated with goods and services, affect the company's performance.

When the consumption patterns change due to economics, the business experiences variations in sales with a negative performance rating based on metrics that link performance to sales. Economic factors in the external environment are specifically the factors that the business cannot control but affect the business's performance.

One of the economic factors that may affect Telus Corporation is the gross domestic product (GDP). It gives information on the performance of the economy in which the business operates. When there is a strong gross domestic product, the economy is interpreted to be performing well. In such an economy, firms and enterprises such as Telus Corporation can hire more employees and easily afford to pay their employees higher wages and pay for other employee benefits. There is a higher consumption of the products in a strong GDP economy, resulting in the company generating more revenue, thus increasing productivity.

The second factor under the economic factor is inflation which refers to the persistent increase in the price level in the economy. With high price levels, production costs increase due to the higher cost of raw materials (Khan et al., 2015).

With the high cost of production, businesses are forced to charge higher prices for their products which discourages consumption and the revenue earned by the company. For instance, Telus Corporation can venture into a market whose cost of production is relatively low in terms of labor, technology, and the entire operation costs, which will result in cheaper services and hence more profitability.

The third element under the economic factors of a business environment likely that affects Telus Corporation is the disposable personal income, which depends on the income level of the consumers and the income taxes imposed on citizens. As used in the context, disposable income refers to the amount of revenue left after an individual pays the income tax and other expenses. It is distributed between savings and consumption on product data and internet services offered by Telus Corporation. Suppose the people are left with more disposable i. In that case, there will be a higher consumption of the company's products as more people will afford additional services on a more regular basis compared to when there the disposable income is lower.

Telus Corporation has several strengths in its adaptability to the economic factors outlined in the discussion. One of the strengths of Telus Corporation is its involvement in helping salvage the economy during these trying times of the COVID 19 pandemic.

One of its subsidiary companies deals with heath. It connects the patient with the physician through mobile apps such as Akira by Telus health and Babylon by Telus health. This saves the patient's transport cost while traveling to see the doctor as we encourage people to stay home and practice social distancing. Also, the company's strength to economic forces relates to a flexible pricing strategy that allows the company to adjust its prices depending on the prevailing market conditions. This allows the company to mitigate losses that inflationary effects in the Canadian economy may cause. Also, they use factors such as growth rate, inflation, and economic indicators to make an intelligent guess on the state of the economy and how it will be shortly. With such efficient information in the form of the economy, the company can easily control inflation's effects even when there are slight changes in any economic variable.

However, the company has faced challenges resulting from the recession caused by the Covid-19 pandemic, with some of the operations and branches being shut down. The pandemic resulted in a massive decline in the number of customers visiting the business enterprises, thus reducing the average income generated from the sales. With lower sales, the business may not fund all expenses and costs incurred in producing coffee products. In the future, Telus Corporation is likely to profit from the growing income in the United States, which offers an opportunity for the company to expand into new ventures and diversify its products. This would generate more revenue for the company as well as support growth and expansion.

The company is faced with extreme market risk caused by the volatile market conditions from varying interest rates to price variations and forces of demand and supply. What is more, the economic uptick and increase in customer spending, suspected after the pandemic, pose a perfect opportunity for Telus Corporation to capture new customers and increase its market share.

Either way, the stock markets seem to trust the way Telus is planning to grow with 5 G technology. "Telus recently accelerated its capital spending for 2021, which will help it integrate fiber optic across its network. Similarly, these projects will help support the 5G rollout across its network. While infrastructure spending will remain elevated in 2021, Telus believes these investments will accrete significant adjusted EBITDA and free cash flow growth in 2022 and beyond." As reported by Robin Brown from the Motley Fool. (Brown, 2021)

This means that some technological, social, and economic factors are converging so that Telus will have a better market perception. We live in tough times, and many people are looking for different ways to recover their income, so the stock market is an attractive alternative. This means that most of the shareholders will bet their money on stable stocks such as Telus offers.

The economic factors involving Telus are so significant that even a ranking recognizes it as a global leader in sustainability and social capitalism:

"For the fifth consecutive year, Dow Jones Sustainability World Index ranks TELUS among leading global corporations; TELUS listed among the top North American organizations for 20th year in a row" (Globe Newswire, 2020)

Social factors

Social factors have a very significant impact on the culture of an organization in the environment. These are factors that affect the opinions, attitudes, and interests of the consumers. This has a direct impact on the sales and services, and revenues earned by businesses. These factors affect the industry in various ways, all of which contribute to the income generation potential of the company (Grünig, 2017).

One of the impacts is that they determine where the business will set up a physical store, what stock to carry, and how aggressively the online selling options are pursued. In the telecommunication industry in which Telus Corporation operates, there are certain critical social factors. One of the factors is demographic trends. Changes in the patterns of social-demographic trends such as migration, aging, and social-economic factors, really affect an international brand like Telus. Understanding the demographic trends can help Telus Corp mark and target the right market segment or segments with a high prospect of growth. Understanding a demographic factor such as trends in migration can help Telus Corp plan how to acquire the labor they need to operationalize their activities.

The second aspect of social factors that are likely to affect the business is gender roles, which refer to how people are expected to act, speak, and conduct themselves based on the assigned sex. Telus Corp needs to have intense research on how traditional gender roles align with marketing and communication practices. How people perceive things is different from one place to another. Some believe that only men should use mobile phones, which will affect the company's operations, where many of the population comprises women. The third social factor that Telus Corporation has to align itself to is equality and power distance. Talking of power distance, it is the societal differences that put people in different classes, hierarchies, and income inequality.

Telus Corporation has to align its operations with the right group or category, either high or low power distance. Changes in many countries, caused mainly by economic shifts, affect many businesses like TELUS Corporation.

Telus Corporation has some strength when it comes to adapting to the stated social factors. Telus Corporation has successfully acquired a high skilled workforce through successful training and learning programs by studying the demographic well. This is evidenced by their effort in investing massive resources in the research of the location, acquisition of the labor, and also consequent training of the human resource acquired from the process (Khan et al., 2015).

However, some weakness has also been noticed. Telus Corporation has not given as much attention to research, development, and financing as it could be required. It has not done enough compared to its competitors, which has failed to compete in the social fields. The future of Telus Corporation concerning the social environment lies in the fact that the world is going online, especially in this time of the COVID 19 pandemic. Because Telus Corporation mainly deals with the internet and data, it will have a greener pasture in the coming future.

One of the main problems the pandemic has brought is education. Since schools are closed, and the provinces are searching for a way to get back to school, most educational institutions have tried remote teaching.

This is the season why 5G technology in all Canada is essential for educators and students. So the ay Telus is taking advantage of the problem is by having available the 5G technology, which is available across the country and still growing to get most of the Canadian schools. "By year's end, TELUS 5G is expected to cover more than 70% of Canada's population". (Mark Davidson, 2021)

Telus has an excellent opportunity to make a difference as a business and as a Canadian benchmark that cares for the country's future.

Let's remember that companies are not only meant to make a profit but to improve society. By developing better technology and creating a way for people to connect in such hard times, they can make a real difference in today's society.

Also, by providing families and friends with a way to keep in touch safely, they might help schools and education and people who are struggling with psychological and emotional issues due to the pandemic. This means not only a more educated country but a healthier one.

Studies show that Canadians struggle with suicidal thoughts: Of great concern is the sharp increase in suicidality this fall; 10% are experiencing recent thoughts or feelings of suicide, up from six per cent in the spring and 2.5 %throughout pre-pandemic. ( UBC, 2021)

It is not so hard to imagine how technology improvement by TELUS can make a real difference in Canadians social and psychological lives.

Talus tries to keep a good reputation and social responsibility; that's why they introduced the concept "Help us Improve" and let customers to feedback via the official website. This is an open customer communication channel.

Technological factors

These are variables that have a close connection to the development of technology. It is the fourth factor of PESTE analysis and has very great importance in the success of any business organization. Several technological factors affect Telus Corporation. One of them is social media marketing. There has been a developing trend in the way marketing of products are done in the recent past. Communication and information technologies have brought about more innovative marketing methods to enhance consumer collaboration (Auster 2018). In that light, Telus Corporation can take advantage of this opportunity offered by social media marketing to improve its operations and performance.

Another technological factor is technological development levels. Competitors have done a recommendable job of going digital and embracing technological advancement. To stay relevant, Telus Corporation should carefully consider blending in the technological innovation. They should consider a 5G network and enhance the user experience, increased speed, and expanded access. There is always room for improvement, and as such, TELUS Corporation should aim at increasing their market share through focusing on the merging technological innovation.

The last technological factor to discuss is shortened product life cycles. New technology has enabled businesses to shorten the lifecycle of new product development.

Telus Corporation has made some steps to ensure they remain relevant in the market and provide quality services based on the above technological advancement. New technology has provided an opportunity for Telus Corporation to practice a differentiated pricing strategy in the new market. Through excellent services, Telus Corporation will maintain its loyal customers, attract new ones, and increase its revenue. Furthermore, TELUS Corporation has developed a strong distribution network that can reach most of its potential market. Even though another organization emulates TELUS Corporation's technology, they cannot emulate the culture behind the technology. TELUS Corporation has a robust technology-based on culture, and that is a thumb up.

However, there are still some gaps that TELUS Corporation needs to fill, especially in this technology field. They are investing less than their competitors in the line of technology, research, and innovation. TELUS Corporation is faced with much threat. It does not have a regular supply of innovative products in that over the year, and the company has developed products that resemble those of competitors. They also don't produce new products regularly as their competitors do.

As we have seen before, some factors, such as technological and social, meet in different points. For example, TELUS empowers people with disabilities with customized technology and connectivity with its program "Telus tech for Good."

"First launched in Alberta and British Columbia in 2018, this national expansion will support more Canadians with disabilities who require professional assistance to independently use or control their mobile device. The program offers customized recommendations, training, and support on mobile devices and, based on individual need, the assistive technology required for persons with disabilities to use their mobile device." (Saara Rahikka, 2020)

Environmental factors

These relate to environmental consciousness and the changing climatic conditions. They are external influences on a business that it has limited control over and plays a critical role in the success of the business organization. The environmental standard, laws, and regulations differ across different markets—some of the environmental factors that a business organization needs to consider include recycling and waste management. In the recent past, environmental conservation has been coupled with technological advancement. There are some innovative ways of recycling waste products rather than disposing of them.

Many countries have placed some specific rules regarding waste management. Therefore an organization such as TELUS Corporation should be aware of them to operate from a safer side. Another environmental factor is weather and climatic conditions. Changes in weather and climatic conditions can have an impact on the operations of a business. A change in weather conditions can sometimes increase the cost of operations of TELUS Corporation, which will compel them to revisit their products and the entire market strategy. Renewable technology is another environmental factor that TELUS Corporation needs to consider. Some countries give subsidies as a way of encouraging investors to use renewable technology. A business can benefit from such an opportunity and go forward to investing in those renewable technologies. The final environmental factor to discuss is the attitude toward eco-friendly products.

In creating a more sustainable future, TELUS Corporation has done a great job investing in innovative technologies and sustainable business practices. They are funding and empowering businesses globally to help solve some of the biggest challenges in environmental conservation. In 2020, they launched TELUS Agriculture to help improve the quality and safety of food by leveraging their technology for the greater good. However, excessive resource depletion by TELUS Corporation can draw a negative response from media, customers, and other stakeholders.

Any business organization should consider the country's regulations concerning the environment; understand the resources considered rare and the species that are endangered by activities of the company (Kara, 2018). The future of TELUS Corporation about environmental factors is the new environmental policies which will create a level playing field for all organizations and stakeholders. It is an opportunity for TELUS Corporation to capture new technology and gain market share in the new product category.

Legal factors.

These factors describe how the law affects the way businesses operate, and customers behave. A careful evaluation of legal aspects is required to avoid getting into some serious troubles. Several legal factors affect the business environment. One of them is employee protection laws. TELUS Corporation must follow the employee's health and safety laws as some countries have strict regulations to ensure labor safety.

Similarly, anti-discrimination laws such as equal opportunities should be upheld by an organization. TELUS Corporation should carefully study these laws when developing human resource practices as a discriminatory suit against employer harm the organization image and retain and attract the possible talent. Another legal factor is consumer protection laws. Consumer protection laws aim to protect the consumer against exploitation by business organizations. Business organizations should take into consideration these laws to ensure they stay away from the troubles.

TELUS Corporation must consider these factors to ensure that they comply with the consumer protection law. The last law is intellectual property law. They are designed to protect the company's patents and valuable ideas. Failure to protect property rights can result in losing competitive advantage, which may weaken the position of TELUS Corporation against other market players (Leyva, 2018).

Competitive factors

Competitive factors cover how businesses that offer similar products or services affect each other. These factors include price wars, imitators, and product differentiation.

Price wars are those attempts by the competitor to lower the price below the market price to gain more customers and increase the market. It happens when companies compete for customers by dropping their prices below the rate of competitors. Price wars benefit the customers as they can get products or services at a lower price. The size of the competitor is a factor that cannot be ignored. A small organization that TELUS Corporation may find itself In trouble because TELUS Corporation has an added advantages in terms of economies of scale. TELUS Corporation should be aware of this and develop strategies that will ensure they don't make losses or go under in the long run.

The second competitive factor is imitators, people, or organizations that try to copy another company's product design, such as, TELUS Corporation just because it is doing well in the market. They try to bring an alternative version of the products and perhaps sell at lower prices. The last factor is product differentiation, where businesses become more competitive by making unique products from that of competitors. It may be in terms of price, quality, or service.

To create a differentiated product, an organization such as TELUS Corporation establishes a strong brand image and has a unique spot for selling. A business organization should be aware of the level and the type of competition of the surrounding businesses. A wrong analysis of competitive factors costs the company its market share and consequently loss of revenue (Aithal 2017).

Global factors

The world is changing rapidly, and the global forces that affect businesses seem to change day in day out. Some of the worldwide challenges that are impacting companies include national and international policies. As a routine of any government, they will make a policy today and change it tomorrow. As such, an organization should review the policy of the country they wish to enter regularly. Some countries have agreed on free movement within their borders, and they have facilitated the training of labor forces and raw materials in and out of their territories.

An organization like TELUS Corporation should analyze such opportunities, which can translate as an added advantage on their side. Also, at global levels, tariffs and trade are other factors that affect the business to go global, like TELUS Corporation is. The North America Free Trade Agreement created in 1994 facilitated trade between the U.S, Canada, and Mexico.

Considering TELUS Corporation is located in Canada, they can seize this opportunity whenever they wish to secure a position in any of these countries. Finally, the national disaster is a global force that has impacted the performance and success of businesses. In the recent past, there has been an increase in the terror attack in some countries that make it hard to run a business. It has also contributed to scaring foreign investors away at thereby limiting development.

However, this is beyond the control of the company. Coronavirus pandemic has also emerged to be a natural disaster that is impeding business operation. It has led to the closure of businesses due to the economic crisis that is associated with it. Lockdowns have made reduced the market and, therefore, the demand for products. If the company fails to understand the global trendsetter may not compete effectively and hence lose its grip on the international market.

Conclusion

PESTE analysis is an essential strategic tool for a business organization that analyzes external factors that shape the business environment. These factors comprise various variables that affect the decisions of business organizations such as TELUS Corporation. In my opinion, an organization should take a deeper look at these factors and take the necessary precautions to ensure the efficient running of the operations. The application of PESTE analysis can help TELUS Corporation identify major external environmental forces that shape the strategy and competitiveness and support the decision-making process.

As we can see, by doing the Peste analysis to a company such as Telus, we can understand how all different factors converge in today's companies. It is hard to comprehend the law, social responsibility, technology, or competitive factors without knowing the context f the company.

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