Business Environment of Cookson Group

1. About Cookson Group

Cookson is a UK-Based Material Science company which manufactures and supplies equipments, processes, materials and services to various end-markets. The three major divisions through which it operates its business are:

Performance Materials
Engineered Ceramics
Precious Metals ProcessingThe industry to which it belongs is miscellaneous manufacturers with the sub-category of Diversified Manufacturing Operations. It belongs to the Industrial sector (Cookson Group PLC, 2012). The company is headquarters in London, UK and listed in London Stock Exchange. The products manufactured by Cookson Group are being offered to more than 100 countries all across America, Asia-pacific, Europe, including NAFTA Region. The number of employees at Cookson Group is 15,500 and has manufacturing facilities spread over 40 countries (Cookson : CSR, 2012). The company’s annual revenue grew at an annual rate of 10.3% between the year 2007 to 2009 and it reported revenue of £2,826 million during the fiscal year ending in December 2011 which was an increase by 11%…

1.1Customer profile

The customer portfolio of Cookson’s comprises of ferrous and non-ferrous foundries, renewable energy providers, iron and steel producers and glass manufacturer. Electronics, jewellery, solar industries, semi-conductor packing and glass industries are also served by them (Cookson Group Plc: SWOT analysis and Company Profile, 2010).

1.2 Cookson’s Values

The main mission and vision of Cookson Group is to add a distinct value to the consumer’s business by making available the products , services and processes which allows them to enhance their efficiency and quality of their operations as well as products in turn (Cookson : ABout Us, 2012).

1.3 Cookson Corporate Social Responsibility (CSR)

It operates through ‘just-in-time’ supply chains which take very short delivery times between orders to delivery. Large number of small and medium size facilities is situated very close to the customers all through the major economic regions in the world, instead of centralised factories. The manufacturing processes at Cookson are not energy intensive which do not result in large amount of hazardous wastes or emissions.

1.3.1 Sustainability

Cookson maintains higher level of R&D expenditure which is monitored through Group Level KPI. There is increased focus on the traceability of precious metals within the supply chain and these metals are sources from environmentally and ethically sound sources through “Green Gold” and “ Conflict metal” Programmes (Cookson Group plc: Annual Report 2011, 2011).

1.3.2 Policies

It knows that its operations have impact on wide community of stakeholders and by taking necessary steps towards corporate social responsibility it can enhance its overall performance. Therefore it focuses on the following areas:

Code of Conduct: the Cookson Code needs all its employees and businesses to comply with the highest level of ethical and legal behaviour.
Products and Services: To promote sustainability issue it develops highly innovative products and services though the customers production processes as well as products.
Health, Safety and Environment: It works towards protecting the health and safety of its employees, customers, general public, contractors. It also tries to reduce energy consumption and does waste management through efficient operations (Cookson Group plc: Annual Report 2011, 2011).

2. External Environmental Analysis of Cookson Groups

Pestle Analysis

It is an efficient business management and measurement tool which helps in understanding the markets growth or decline, which in turn helps in founding the potential, direction and position for the business.

2.1 Political factors

The legislations in UK are quite favourable for steel manufacturing industry.
The political environment of UK is quite stable and very well organised than any other countries across the globe.
The tax rates are very high in UK however, because it makes the cost of production more automatically due to expensive raw materials.
There are strict policies in the labour contract so that labour exploitation can be handled by government.

2.2 Economic Factors

Weak production all through the global steel industry (Fletcher, 2012)
Global slowdown which is unsettling the investors has resulted in dropping profits of Cookson Group
Undermining of commodities companies because of warning issued by World Bank regarding slowdown in China which is major market for Cookson Group.
European Finance ministers thrashed their latest plans in which they had to tackle the Eurozone crisis, thus European markets are also not favourable for Cookson (Fletcher, 2012).
The group does not have control over the changes occurring in the foreign exchange currencies rates or inflation as well as interest rates.

Figure 1: Business Model and Strategy of Cookson (Cookson: Business Model and Strategy, 2012)

2.3 Socio-cultural Factors

Being a global company with global presence the work force diversity is there.
Every country where Cookson Group has their manufacturing facilities they have local labour, however the senior management is theirs.
Managing cultural diversity across 40 countries is difficult.
Moreover it has customers in almost 100 countries same way dealing with culturally different customers is also tough.
All the members of group officers, employees and Directors follow duty of loyalty towards the Group and they seek to be good corporate citizens (Cookson Group plc: Annual Report 2011, 2011).

2.4 Technological Factors

The infrastructure available at Cookson is of highest quality and very much advanced technologically.
It allocates a budget every year which is dedicated to research and development.
Based on its technology leadership Cookson Group has acquired global market leadership.
It boasts of its outstanding technical services along with reliable “just-in-time” supply chain (Cookson Group plc: Annual Report 2011, 2011).

2.5 Environmental Factors

They are committed towards regulatory compliance regarding allowed waste and noise, and air emission criteria.
It strives to reduce electricity and gas which is consumed during the operations and thus tries to reduce CO₂ emissions so that it can keep the environment safe from Greenhouse gases and do not contribute towards global warming (Cookson Group plc: Annual Report 2011, 2011).
They have developed a programme which trains the employees about reduction of energy usage and associated carbon dioxide emissions (Cookson Group plc: Annual Report 2011, 2011).

3. Conclusion

From the above analysis it is evident that the markets for Cookson Group will improve and the kind of values and corporate social responsibility it caters to the business environment is quite favourable for the company to grow its business. The environmental and technological factors are quite strongly supportive as it is working towards greenhouse gas emissions and corporate sustainability along with advanced technology. However the economic factors are a bit unstable due to dwindling Chinese markets, it had toi shut down its factory in China. But to handle the risk it has robust internal controls framework and risk management services too which again make business environment favourable for the company.

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