The aid of this assignment, I shall be dealing mostly on the Macro Environment with an overview of the PESTEL model and its importance for my company, highlighting the most important opportunities and threats faced by my company.
1.1 Overview of PESTEL model
In the macro environment it has 6 different segments which are continually changing. The segments which make up the macro environment is:
‘ Political
‘ Economic
‘ Socio-cultural
‘ Technological
‘ Environmental and
‘ Legal
1.2 Purpose of the PESTEL model
The PESTEL analysis is a useful tool for understanding the environmental influences in which a company is operating, and the opportunities and threats that lie within it. By companies understanding the environment in which it’s operating in, maybe taken as and advantage of the opportunities and minimise the threats. The PESTLE analysis is a useful tool for strategic decision making in understanding the risks associated with market growth or decline, and as such the position, potential and direction for a company or organisation.
2 Analyzing Juta and Company LTD Using the PESTEL Model
The company for my internship is Juta and Company LTD. There are environmental factors that the managers can control to a certain extent and ease, any negative outcomes that might obstruct the company’s growth. The company can only put systems in place that will protect them from possible threats of the macro elements, such as the PESTEL tool.
2.1 Political Factors
2.1.1 Political Stability
Juta can be disadvantaged negatively if the country is politically unstable. When Juta invests money into its publishing, it is done with the expectation of future returns for sustainability purposes. One example can be used when Juta in Cape Town burnt down, known as an accident-however it was declared as a riot in the Apartheid Era that triggered the fire. As a result this has in return affected the company’s growth into the country to the point where its managers need to be at the constant alert for unforeseen circumstances.
2.1.2 The Protection of Information Bill and it’s relation to Juta and Company LTD
The newly drafted Protection of Personal Information (PPI) Bill will affect the way in which the media deals with its sources and may increase the obligation of media houses to protect personal information (Hannah, 2013).
The PPI Bill aims to:
‘ Promote the protection of personal information processed by public and private bodies,
‘ Introduce protection principles that establish minimum requirements for the processing of personal information, and
‘ Establish an information protection regulator.
Additional obligations on the part of the media may include security of personal information, accuracy of personal information, providing reports of lost personal information as well as providing data reports on personal information that a media house may have (Hannah, 2013).
Figure 2.1: Zapiro – Info bill
Source: (Mail & Guardian, Zapiro, 2012)
The protection of information bill, when passed, will affect the media to its core, its policies, procedures, structure and especially the way in which it deals with information. Juta’s media series textbooks are all subjected to legislation before the new PPI bill. Because of this, the Juta media and journalism series are now considered to be out-dated.
2.2 Economic Factors
2.2.1 Interest and Exchange Rates
The rates of different currencies and the changes in the demand cycle in the different countries that Juta operates across the globe might result in a major blow in the prices of raw material needed for production purposes. As a result the company might seek for alternative ways of importing materials which can, slow down the production process and limit the amount of book publishing produced.
2.2.2 Production and Sales of Manufacturing Books
Table 2.2: Contribution of manufacturing divisions and major groups to the three-monthly total seasonally adjusted sales of the manufacturing industry at current price
Wood and wood products, paper, publishing and printing Seasonally adjusted sales August to October 2013 Seasonally adjusted sales November 2013 to January 2014 % Change between August to October 2013 and November 2013 to January 2014
Wood and wood products, paper, publishing and printing 32 684 880 31 029 589 -5.1
Wood and products of Wood 6 544 045 6 387 419 -2.4
Paper and paper products 14 619 429 14 502 526 -0.8
Publishing and printing 11 521 407 10 139 644 -12.0
Source: (Manufacturing: Production and Sales [Preliminary], Statistics South Africa, 2014
Seasonally adjusted sales of manufacturing products for three months ended April 2014 decreased by 1.8%. Five of the ten manufacturing divisions reported negative growth rates over this period. Manufacturing growth is much slower than expected. Wood and wood products, paper, publishing and printing division showed a 4.8% decrease over the three month period ended April 2014. (Statistics South Africa, 2014)
2.3 Social Factors
2.3.1 Consumer attitude and Opinions
People are more reading on the internet, listening to books on I-pods and in general shifting away from reading books, magazines or newspapers. Many people want information that they can access quickly, whereas purchasing books takes more time and effort than looking up the information on the internet. Publishing takes time, the information published in book form is out of date at publication because things change rapidly. The internet and electronic media can respond to change rapidly, whereas publications cannot. Also, environmental issues like the trees consumed in making books and magazines have become a concern. Economic issues with the prices for basics like gas, energy, food and water is increasing, there is less disposable income left for most people to purchase reading materials.
2.3.2 Corporate Responsibility
There is an ever growing urgency for corporate or private bodies to increase or broaden its impact it has on society. Society will always have issues which hamper its progress, e.g. illiteracy, lack of education, poverty, poor living conditions and the lack of the bare necessities in some rural regions. Organisations are now urged to develop and establish programmes to address these societal problems and through Juta & Company Ltd’s corporate social Investments these issues are being addressed.
Table 2.3
‘Juta also responds to ad-hoc requests for sponsorship and donations and where the request is not a business imperative, its contribution to education transformation is the criterion used for selection’ (Sustainability Report, Juta & Company Ltd, 2012).
2.4 Technological
The e-Book is one of the much technological advancement that impacts the publishing industry, worldwide as well as in South Africa. Technology has forever changed the way in which individuals interact with a book. The e-Books has not, yet, replaced the hardcopy form of the book, but has acted more of an extra service to the actual text. Portability and access through portable digital devices has made the e-Book a very popular item, especially amongst the individuals in the law profession. The reason for this is that prior to digital books, lawyers were manually searching for case references and records. But with the development of the e-book, a quick search through a pc or iPad can be done in a matter of seconds (Collini, 2013).
2.5 Ecological Environment
Pressure from governments and societies around the world has urged companies to revise their business strategy and policy to consider the impact those companies have on the environment. Especially with regards to the publishing industry where paper, which is sourced from trees, is one of the main resources. The urge or pressure of environmental societies on companies to reduce its footprint has made this a difficult task for the business environment. Juta addresses these environment issues and the passage below is a testament thereof.
Table 2.4
‘A further facet of sustainability is environmental impact. As a publisher, there is the inevitable concern to source environmentally friendly paper and recycle to ensure sustainability of resources and minimize our carbon footprint. Our concerted shift towards electronic delivery of information, and more recently, e-learning, goes some way to address this, however, it is our intention to analyse our practices and value chain thoroughly to enable us to build a comprehensive Reduction of Environmental Impact Plan.’ (Sustainability Report, 2011)
2.6 Legal
Intellectual property is the mainstay of the entire information industry. The law protects people’s rights to own their creative products, be their ideas, inventions, written works, computer programmes or even the names and logos of a company’s consumer items. (Publishers Association of South Africa, 2007)
Publishing houses may only publish original work from others, when a contract has been signed by both parties giving the publishers exclusive rights to publish the authors work.
The Copyright Act is one of the most important fragments of legislation governing the operations of companies in the publishing industry. Stern adherence to this act and its restrictions, are of extreme importance in the publishing industry, as well as the concept of plagiarism.
The concept of open licensed textbooks in South Africa has now become a reality for publishers. A perfect example would be the instance with the Siyavula projects, which aimed to provide open licensed textbooks to all learners in the country, urges educators and learners to openly share their teaching and learning materials (Siyavula, 2012). An article which was posted on the website, The Skills Portal 13 June 2011, entitled ‘ Textbook Plan in Motion ‘ states that Siyavula, headed by Mark Horner, released these textbooks under an open copyright licence, which can be freely read on mobile phones. The open copyright licence allows learners and educators to legally copy, change, print and distribute these textbooks.
The project alone will demoralise the copyright laws in publishing, however, to the projects defence, for further development of education and the quality thereof in South Africa.
3 SWOT Analysis for Juta and Company LTD
Table 3: SWOT
Strengths ‘ Juta investing in their employees, by paying for the further studies.
‘ Reaching out to homeless children and giving back to the community, by awarding scholarships and internships to students.
‘ Having a good management in their departments and unique proficiency of its general managers.
Weakness ‘ Juta not having their own e-book application, for clients/customers to get hold of.
‘ Due to the vast nature of the business, the company doesn’t have a direct interaction with its main consumers, as such it will have to rely on the decisions of its wholesalers and retailers.
‘ Closing down their Retail Stores, could mean closing the door on loyal clients, which cannot reach internet purchasing.
Opportunities ‘ The company should get involved in Film Companies, bringing publishing books for children to life, as documentaries or short movies- bringing awareness to the brand and growing the film business.
‘ Colliding with blogs and creating their own blog, keeping clients, scholars and investors up to date on what’s happening in the publishing world-making a fuss about a particular book, author or event to attract new readers and interest parties.
‘ The company should be able to detect opportunities in declining industries and capitalise on such window of opportunities. Such as magazine editorial companies.
‘ Juta should focus on building into emerging markets such as international, America, Asia, Ghana and Kenya.
‘ The company should use e-marketing as a primary media of advertising, instead of just on their website. They could use mailing list and promotions on buying books online.
Threats ‘ New merging technology cracking into the market. For example, blogs and e-mags.
‘ As a leader in the publishing market, Juta faces businesses from strong competitors, like Van Schaik Publishers and Heinemann Professional Publishing, who over the years have proven to be a major threat to the company. The recent lunching of their online purchasing website by Van Schaik Publishers and the fact that its products share the same shelf space with its competitor’s products, positions a major threat to the company.
‘ Disorganized Brand management with over the 400 authors publishing through Juta, it becomes difficult to manage the efficiency of all these brands across different portfolios.
‘ Substitute products are available from competitors but quality of Juta’s products and technology value-add discourage switching
‘ Illegal photocopying and 2nd hand market
‘ Free content in raw or unstructured format is increasingly substituted
4 Recommendation and Conclusion
Juta has no effect on the macro environment, by itself as a company that it currently operates in. The macro environment of the publishing industry is branded as having a number of regulations and legal aspects which governs it and intellectual property and copy right is at the core of this.
Even though Juta cannot directly affect what happens in the macro environment, however, it can implement strategies and policies to its internal environment to kiosk the proceedings happening in the external environment.
Also, I recommend that Juta investigate the Siyavula project, as it strives to provide quality learning material and knowledge and also congratulate them on a good managerial system running at Juta.
5 References
‘ Juta & Company Ltd. 2014. Available from: <http://www.juta.co.za/> [31 July 2014]
‘ Statistics South Africa, Manufacturing: Production and Sales (Preliminary) January 2014. Available from:
http://beta2.statsa.gov.za/publications/P30412/P30412Janaury2014 [31 July 2014]
‘ X.PERT Academy (2002), Project Management Fundamentals Course Notes, Cape Town, South Africa.
‘ Common Publishing Legal Issues and How To ‘Avoid Them By Howard G. Zaharoff Available from: <http://www.mbbp.com/resources/iptech/publishing_legal.html
‘ Sustainability Report, Juta & Company Ltd., 2011. Available from: < http://www.juta.co.za/download/6449/Sustainability%20Report.pdf> [30 July 2014]
‘ Mail & Guardian Online, Zapiro for April, Info bill, 2012. Available from: <http://mg.co.za/zapiro/fullcartoon/3654/> [3 August 2014]
1471 words