Example Of Bae Systems Pestle Analysis Essay

Type of paper: Essay

Topic: Business, Australia, Industry, Politics, Government, Market, Environment, Strategy

Pages: 3

Words: 825

Published: 2021/02/17


Business operations are subject to various factors that influence their operations and performance. In addition, increasing competition requires businesses to position themselves competitively in terms of markets share and suitable products, as well as services delivery. In that view, businesses need to consider macroeconomic factors among other aspects in their strategic planning. In that respect, this report seeks to demonstrate the application of analysis in analyzing a business market environment. To achieve the objective, the analysis uses the case of BAE Systems’ shipbuilding operations in Australian and provides a comprehensive analysis indicating how it can be used in the company’s strategic planning.


BAE Systems Overview
The Company’s platforms & Services International comprises of the Group’s businesses in Australia, Saudi Arabia, and Oman, accounting for its 37.5% interest in the joint venture at pan-European MBDA. BAE Systems Australia has its headquarters in South Australia at Edinburgh Parks but works from sites all over the country in support of security and defense customers. The business in Australia delivers upgrade, production and support programs for customers in the commercial and defense sectors across the naval, air and land domains. Contracted services include the provision of sustainment, upgrades and training solutions. Platforms contracts involve naval ships, like the Helicopter Landing Dock program for the Navy of Australian. Contracts are usually multi-year and a fixed price (BAE, 2014)
It builds, design, integrates and support naval weapon systems and maritime platforms with operations and capabilities including shipbuilding. It is a leading shipbuilder in the marine and naval sectors with main shipyards at Henderson in Western Australia and Williamstown in Victoria. The type of vessels built includes offshore patrol and naval frigates vessels for the navies of New Zealand and Australia (BAE Systems, 2015). Others are research vessels, patrol boats, rescue and search vessels and tugs for other government agencies, police forces, commercial operators, port authorities and export customers. In addition, it makes Auxiliary Oiler Replenishment (AOR) from commercial tanker vessel for the Royal Australian Navy (RAN). Finally, he company is a major contractor for the Landing Helicopter Dock (LHD) program for the RAN`s that delivers two amphibious ships 27,000 tone (BAE Systems, 2014).

PESTLE overview

The model entails analyzing the macroeconomic factors that affects a business in the market. Its application would help the business align with its international strategy while recognizing the specific factors affecting Australia. (Keller, 2012). That is considering with the market being marked by rising preference for Commercial Off the Shelf and Military Off the Shelf and solutions, a continued to insist on a reduced operational tempo and short-term competitive contracting. The analysis would also help the business address the relevant factors in is a strategy that is based upon three objectives that are simple but linked including competitiveness performance and business winning. The strategy would be created a plan that makes sure it not only stands strongly in the competitive environment, but also consolidates and position the firm for the future (Sengupta, 2005).


Encourages and Aids the development of strategic thinking in an organization.
Provides a mean that helps an organization to exploit and identify new opportunities.
Helps to decrease the effects and impact of possible threats to an organization.
Provides an easy and simple-to-use analysis framework.
Helps in assessing implications of getting new markets both globally and nationally.
The users can simplify information too much.
The process has to be regular to be effective, and usually organizations do not make that kind of investment.
The users could get much information and forget that the tool`s objective is the identification of issues for the action to be taken.
Organizations usually restrict who is involved due to cost and time considerations. This limits the effectiveness of the technique as a major perspective may be lacking from the discussions.
The users’ access to external information that is quality is usually restricted because of the time and cost needed to collate it.
Assumptions usually form the basis for the majority of the data used, and decision are made based on such data subjective. (Porter, 1980).
Australia is a global leader and exporter in the high-speed, design of large, multi-hull aluminum vessels and also supplying a broad range of auxiliary marine services and products. The Australian maritime industry is huge and highly innovative, employing over 22,000 persons with revenues of $4 billion. (BAE, 2015) The factors influencing is operations and performance as follows


The electoral cycle of politics of both the State and Federal Governments makes it very hard for the government to appear to understand the problem of the reduction in manufacturing but do nothing about it. Thus, pressure can be expected on the government from all the quarters to take action to support the manufacturing skills in the sector. (New Zealand Trade & Enterprise, 2015). The commercial sector of Australia has no such champion as such and can exploit and adapt emerging market conditions. Currently, the industry is very much affected by its national context. That is the reason to why the driver group involves the trends that are discussed within the environment of national policy. That mainly comprise of the national defense policies, as well as the increasingly the general industry policy. (New Zealand Trade & Enterprise, 2015). Others include

 Legislation like the minimum wage

Trade agreements, restrictions or tariffs
Tax breaks and tax levies
It was a difficult period during the Global Financial Crisis for the Australian maritime sector, coupled with the Australian dollar being high that had resulted in marine products and services growing volumes being imported to Australia. In addition, the provision of public primary services is relatively inelastic and driven by government demand. The government purchases value over the past five years has remained relatively stable while the Australian industry has softened. The revenue share increase of the government market has therefore offsetted the commercial market decline. The industry commissions various water police services of the state purchase customized vessels from boat builders directly and repair services (New Zealand, 2015).


As national budgets for the Defense and other policy implications are highly political, acceptance of these operations by the society is an important factor in the actual defense activities. In addition, ethics is a crucial aspect in defense equipments production hence the business has an ethics training program and a Code of Conduct as well as Ethics Helpline that gives practical guidance and examples to help workers deal with crucial ethical issues. Further, it seeks want to ensure that each employee – returns safely to home at the end of every day. Finally, he business support communities making a highly valuable contribution to the society through Schools, charities, and not-for-profit organizations. Learn more on how we support their work through sponsorships, donations and workers fundraising. (Fred, 2011).


Shipbuilders, their sub-contractors and suppliers in every aspect of their work use technology. Defense sector ongoing technology improvements are made to all facets of submarines and ships, as navies require military leading edge technology. One of the business core factors is its technological base. Developments in technology and science that supply have highly influenced. In addition, it influences functionalities changes of the needed defense equipment hence demand. Research, engineering and development staffs engage in application engineering for specific orders of the customer and development of new product features and products, through construction techniques, and innovative designs newer ships are continually being enhanced. The challenge is to match up for all parties those with the required techniques with those who can provide solutions for the maritime sector but from the full spectrum of industry. In the commercial sector, new technologies are being incorporated by shipbuilders to ensure passengers and crew’s comfort, as well as the safety. Shipbuilders in Australian and several large foreign companies can also access markets through advanced technology means. That may also provide more opportunities for the business to win work in the more market. New Zealand advanced technology and expertise in fiberglass, composites, and carbon fiber construction skills is also relevant to the business operations (New Zealand, 2015).


The potential emissions impact on the immediate environment from shipbuilding operations can be very significant, given that shipyards are especially inevitably near and on water increasing the likelihood of some of those emissions being propagated. Through the Department of Innovation, Science, Industry and Research (DIISR) the Federal Government is working with the shipbuilding industry and marine in to address impediments to growth and pursue opportunities for development. Also, the Department works with research communities and the industry to help build globally successful and a more innovative marine industry that can respond better to environmental challenges. DIISR supports Working Group in the Marine Industry, which brings together various sectors in the marine industry including shipbuilding to address issues of concern cooperatively, provide a collective voice to government and to share information. In relation to issues of environmental impact by shipbuilding and other marine industry sectors, the government has been addressing regulatory impediments to growth in the industry (IMO, 2009). The Australian Government for some years has worked with industry through Working Group in the Marine Industry and separately to:
Build better linkages between the marine industry and government regulatory bodies to ensure consultation are effective in regulations development and implementation.

Encourage consistency and greater harmonization of regulations impacting on the marine industry

Ensure that marine industry and other key stakeholder’s views are taken into account properly in the marine reserve establishment and management. (OECD, 2011 )
As a main manufacturer, BAE operations have significant effects on the environment through the resources and energy used and the generated waste. However, It tries to reduce the environmental effect of our operations and helping our suppliers and customers do the same. In its product stewardship, it works to decrease products’ environmental effect at each stage of their life cycle –starting from concept, design and manufacture all through to the use and disposal. (BAE, 2014)


Australia has the responsibility for maintaining United Nations Security Council sanctions, as well as bilateral sanctions in respect of a number of countries. These sanctions require Australian organizations compliance with a range of measures. Sanctions could include export, as well as import prohibitions and restrictions of technical assistance and training as well as financing that could affect the company’s operations and partnership with customers in other countries. (Australia Government, 2015)


In view of the analysis, it is clear that the business operations are subject o various factors. He suitable economic conditions in the market increasingly provide opportunities for the business o enhance production. Technology advance also enhances the business innovations in products and service delivery. In addition, the business increasingly faces suitable political and legal environment as well as social acceptance of defense operations hence enhancing market demand that supports its increased production. However, the business needs to enhance is response o en environmental needs as a means of managing related risks that could negatively affect is operations. That would entail devising more environment-friendly production processes as well as materials sustainable sourcing. In ha view, the market offers numerous opportunities that the business can utilize for strategic positioning.


Australian Government. (2015). Compliance with government sanctions and regulations. Retrieved from, http://www.austrade.gov.au/Export/About-Exporting/Legal-issues
BAE Systems. (2014). Annual Report 2014. Retrieved from, http://bae-systems-investor-relations-v2.production.investis.com/~/media/Files/B/BAE-Systems-Investor-Relations-V2/Annual%20Reports/BAE-annual-report-2014.pdf
BAE Systems. (2015). Products and Capabilities. Retrieved from, http://www.baesystems.com/our-company-rzz/our-businesses/bae-systems-australia/defence-solutions/solutions-at-sea?_afrLoop=2757511595291000&_afrWindowMode=0&_afrWindowId
Fred, R. D. (2011). Strategic Management: Concepts and Cases. 13th Ed. New Jersey: Prentice Hall.
IMO (2009). Maritime Transport and the Climate Change Challenge. International Maritime Organization.
Keller, K. (2012). Strategic Brand Management: Global Edition. 4th Ed. New York: Pearson Publishers.
New Zealand Trade & Enterprise. (2015). The Australian Marine Industry Overview. Retrieved from, https://www.nzte.govt.nz/en/export/market-research/high-value-manufacturing/the-australian-marine-industry-an-overview/
OECD. (2011). The Shipbuilding industry’s response to the Green Growth challenge. Retrieved from, http://www.oecd.org/sti/ind/48365783.pdf
Porter, M. (1980). Competitive Strategy: Techniques for Analyzing Industry and Competitors. New York: Free Press.
Sengupta, S. (2005). Strategies for Competitive Advantage. Lake Town: Tata McGraw-Hill Publishers.

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