Using PESTEL to design effective strategies
A Network Rail case study

Page 1: Introduction

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When people think of rail travel they think of trains. They do not think about the infrastructure of the train network. This consists of countless bridges, viaducts, embankments, cuttings and tunnels. Background to Network Rail Independent companies built the first railways in the 19th century. From midnight on 31st December 1947 the government took control of the railway industry and British...
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Page 2: Strategy and the external environment

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The external environment is the context in which a business operates. This takes in various factors including those outside its control, for example, laws or standards. The external environment is the context in which a business operates. Each factor can have an effect on the business positive or negative and so companies make plans and strategies to try to anticipate these effects. If a company...
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Page 3: Political and Economic forces

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Political Railways have always been a political issue. In the 1960s, as car ownership increased, rail use dwindled and many lines closed. Government money has kept parts of the network operating. Further cuts to services would save money but increase social hardship and affect the environment by putting more cars on the road. Investing more in the railways would deliver social and environmental...
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Page 4: Social and Technological factors

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Social The rail network covers most parts of the country. This means that Network Rail has an important and sensitive relationship with the public. Nearly five million people live close to rail tracks, so noise needs careful control. Network Rail aims to develop a positive image or brand. Persuading the public that rail travel is a real alternative to car use is vital. Individual rail...
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Page 5: Environmental and Legal issues

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Environmental The greatest non-financial benefit of railways is environmental. Rail travel is much more energy-efficient than travel by road or air. For example, it is estimated that a car journey is six times more polluting than a similar distance by rail. Unlike roads, railways make few new demands on land and release lower levels of carbon dioxide. It is estimated that a car journey is...
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Page 6: Conclusion

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Organisations make strategy to fulfil their corporate objectives. These arise from the aims and influences of their stakeholders. A business organisation adds value by ensuring that total costs are exceeded by corresponding increases in value. Network Rail is committed to adding value but some of its costs and benefits are social rather than financial. As well as meeting its fiscal targets...
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