Regent College: Business and Business Environment Report for NatWest

This report provides a comprehensive analysis of the business environment, focusing on NatWest as a case study. It begins with an introduction to business and its environment, followed by an examination of the interrelationship between various organizational functions, such as finance, marketing, human resources, and supply chain, and their nexus with business objectives. The report then delves into the impact of the external environment on business operations, utilizing the PESTEL framework to analyze political, economic, social, technological, environmental, and legal factors affecting NatWest. Furthermore, an internal and external analysis of the organization is conducted using the SWOT analysis to identify strengths, weaknesses, opportunities, and threats. The report concludes by discussing the interrelation of strengths and weaknesses with the external factors, providing insights into how NatWest can navigate its environment. The report aims to provide a thorough understanding of business environment concepts and their practical application within a financial service provider like NatWest.

Business and Business
environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Covered in PPT......................................................................................................................1
P2 covered in PPT.......................................................................................................................1
TASK 2............................................................................................................................................1
P3 Relationship between various organisational function nexus with business objectives........1
TASK 3............................................................................................................................................3
P4 Impact of external environment on the business operations..................................................3
TASK 4............................................................................................................................................5
P5 Internal and external analysis of the organisation..................................................................5
P6 Interrelation of strength and weaknesses with the external factors.......................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business is an economic activity aimed at earning profits. Business is largely affected by
the environment that surrounds it. A business environment consists of elements which are
beyond the control of the company and affects its operation in huge manner. The environment
can be categorised into External and Internal environment. Change is the only constant thing in
the business environment therefore the manager have to ensure that all the operations are carried
out in a smooth manner (Aithal, 2016). NATWEST is one leading financial service provider in
the United Kingdom. The company focuses on providing the financial assistance to other
business houses so that their goals can be achieved in an effective manner. This report focuses on
thorough understanding the business environment and how it can be dealt in an effective manner.
Business plan will be designed and policies will be formulated to minimize the influence of
environment onto the operations. The interrelations between the various functional areas will be
carried out as well.
TASK 1
P1 Covered in PPT
P2 covered in PPT
1

2

3

4

5

6

TASK 2
P3 Relationship between various organisational function nexus with business objectives
There are a variety of functions performed in a business to achieve the specified task. The
function necessarily have to work together for successfully accomplish the objectives. The
various function performed in an organisation are operations, finance, marketing and human
resources. The communication between all the mentioned function is determined by the
organisational structure (Aterido, Hallward-Driemeier and Pagés, 2011). The interaction between
the functions is necessary to carry out its operations in the efficient and profitable manner. The
vital functions are as follows:
Finance Function
In consideration to the NatWest, finance is the most important function in the company.
The company have to ensure the timely availability of the funds to carry out the business
operations. The availability of finance is not only confined to the lending of money it also
includes the payment of salaries, bills and for the marketing and research programs. Finance is
the blood of the organisation as all the other functions are dependent upon finance.
Marketing Function
7

Marketing is vital no matter which sector which sector a company is catering. Effective
marketing strategies help in development of competitive advantage for an organisation (Bryman
and Bell, 2015.). The marketing activities for NatWest are necessary to compete in the market.
This function can only be fulfilled with adequate marketing budget allocated by the finance
department. The marketing function is helpful in enhancing the sales volume of the company.
The company can make use of various marketing tool to defeat the competitors such as Barclays
and Standard chartered in terms of market share when utilised effectively. The integration
between marketing and other function can facilitate goal achievement in a shorter duration of
time.
Human Resources Function
The human resource department is one of the crucial function which aid in achievement
of goals in a rapid and cost effective manner. The marketing function assess the need of
individual in the marketing as well as in the operation department which can be fulfilled by the
HR department (Cuervo‐Cazurra, 2011). The NatWest wishes to increase its sales volume in
insurance sector. Considering this the HR department will inculcate more individuals in the sales
force and will develop a tempting reward system so that the goals will be attained in the timely
manner. The integration between various function is necessary to fulfil the human resource
requirement in every field.
Supply Chain
Supply chain is defined to be the way through which the product or services are made
available to the customer (Drucker, 2017). The determination of the supply chain involves
integration between various functions of business. The market research identified the target
market where products are to be sold. The operations help in determine the level of profitability
to be maintained and finance department allocated the budget for the same. The combination of
these function help in identification of ideal supply chain for NatWest. The business objectives
can be achieved by effective marketing and supply chain strategy.
Operation function
The NatWest carries its operations in the banking and insurance areas. The operations
function determines the loans and finance to be allocated to a company. It does require to check
the background and the track record of the party to ensure whether to provide financial assistance
or not. The marketing department determines the pricing policy and interest rates to be charged
8

so to compete with the rivals in an effective manner (Hamilton and Webster, 2015). The
amalgamation between the operations and other functions make sure that goals are attained
within the specified time.
TASK 3
P4 Impact of external environment on the business operations
The external environment carries a significant impact on the functioning of business
operations. These external factors are beyond the control of the organisation. Therefore it is
necessary to evaluate the factors of the external environment so that policies and decisions could
be framed to minimize the effect on the business plans. NatWest is influenced by a large extent
due to components of the external environment. The management preferred PESTEL to develop
a thorough understanding of the factors and means can be developed to counter the effect of the
same. PESTEL is one of the most common assessment tool used to study the external
environment. It takes into consideration the political, economical, social, technological,
environmental and legal (Welford, 2013). The PESTEL of the NatWest is as follows:
Political Factor: The political factors takes into account laws and policies formulated by
the government. The prices of goods and services are determined by the taking into account the
political factors. The banking sector experiences continuous interference from the government.
The rate of interest and the credit reserve ratios are determined by the government which affect
the business of the bank. The country opting out of the European union will experience new
policies and laws by the centre government. The recent increase in the surcharge to 8% depleted
the level of profitability of the company.
Economical factor: The circumstances in the market and the banking industry share a
very close relation. The situation of recession in the economy affects the accessibility of the
capital by the banks. The value of the currency help in capital management. The situation of
inflation in the economy is a major drawback for the banking institution as such circumstances
arises due to decrease in the value of the currency (Wheelen and Hunger, 2011). Fall in the value
of the currency makes the international investors a little hesitant. The recent Brexit forced the
government to lower the rate of interest which hampers the profitability of the financial
institution.
9