Solution Business and Business Environment Assignment

Business and Business Environment
Section B

1.PESTLE ANALYSES ON LB FINANCE
1.1. POLITICAL FACTOR
LB finance is a leading finance company in Sri Lanka which owned by the famous MR.
Dammika Perera. Even though this is a finance company they practice some of the services
banks are providing so because of that there is a trade war between banks and LB finance since
they are doing something finance companies are not doing. Since 2019 the government of Sri
Lanka is not stable due to some reasons like Easter Attack and current situation Covid – 19,
despite those facts there is huge problem for most of the businesses of Sri Lanka the
Depreciation of Sri Lankan Rupee like others it affects to finance companies not directly but it
has an impact on them too. The recent interest dropping also effect to LB finance due central
bank and monetary fund of Sri Lanka decided to drop their interest rates on personal loan to
business people so that impact also affect on LB finance. And also, for their Myanmar branch
has an impact on depreciation of rupee since they deal with US dollars. And recent government
policies on protectionist have also have an impact on LB finance since they have a branch
overseas. And the tax incentive from the recent budget.
Having MR. Dammika Perera as the chairman is a plus point for our organization as politically
and in general. The trade war between banks and LB finance is a negative point all though
customers happen have trust on finance companies rather on some banks so it’s a positive point
in some areas, government stability of course a negative fact for the organization, depreciation of
Sri Lankan rupee and recent interest drop on personal loan is a negative fact for the organization
but on the other hand it also affected to fix deposits and savings so on the other hand it’s a
positive fact for company but not for the customers. And the recent international trade policies
are a negative factor for organization since LB finance have a branch in Myanmar. Tax incentive
from the government also a negative point for business.
1.2 ECONOMIC FACTOR
Since there is a recession going in Sri Lanka it affects many businesses it also effects on LB
finance too many employees are losing their jobs and no opening for new opportunities inside

the company while existing employees doesn’t get promoted or getting any pay raises due to this
situation. And the current economic growth decrease has also affected on LB finance since all
the interest rates dropped customers are afraid to deal with the organization even the existing
customers are retrieving their accounts and fix deposits. Current living situation has also had an
impact on LB finance since cost of living is really higher than what they earn.
Recession has a positive and negative factor on business. The organization has to work with a
limited resources whilst it’s a positive point in profit areas its also a negative point when we
don’t have enough resources to work and existing employees getting discourage since no
opportunities and not having a reward for their hard work. And loosing its customers since
interest rates drop and not getting any new customers. But having loyal customers is a plus point
for the business. And the recent situation of cost of living and living style of the general public
also has a negative impact on the business.
1.3. SOCIAL FACTOR
Even though above factors have an impact on the organization still it has a large crowd of loyal
customers who are still willing to deal. LB finance respect each and all cultural beliefs and
religions so they have special services for each and everyone. Even with this current situation
they manage to help their employees with the maximum that they can to make them satisfied and
loyal to the company. they have 127 branches around the country for easy use of the customers.
Having a good brand name and lasting for more than decade in the business and having best
awards for our services the organization manage to keep its loyal customers in track with them
it’s a plus point for them, and having different investment program for everyone cultures age
groups is a positive factor for the organization. And even though this tough time they are doing
their best to keep their existing employees satisfied for the organization good it’s a positive point
for them. Having branches around the country is a positive point for the organization more
branches mean more customers.

1.4. TECHNOLOGICAL FACTOR
Since we live in a fast-growing technological era, the organization also updated in every area of
technology it is easy for its customers to deal with them, new innovation like LB application to
do their online transactions, debit/credit card services are really helpful to the customers they
don’t have to present to withdraw money all the time they can use online trans actions or ATM
services for that. And most importantly privacy and security for their customers they highly
consider above two factors.
Its always a positive factor to stay in touch with the revolution of the technology since this is a
past growing era every business has to move forward with technology. LB finance also use the
new innovations to move closer to their customers with new and reachable tech since people tend
to use them its definitely a plus point to the company since we can earn profit form that fact to all
the service charges and other charges to maintain them but also the company has to spend some
money to keep up with technology its not a big negative point but some impact on that. Having
most secured systems and data base they manage to keep their customers privacy and security
it’s a plus fact for the company.
1.5. LEGAL FACTOR
LB finance is registered company and obliged to all the employment law, labor laws and
common laws. All the employees of the company get the minimum wage rates which given by
the government and yearly wage raise, since this pandemic the company is doing the best, they
can to make that happen. And above all they protect their customers. And also, they adhere to all
health and safety regulations.
To have protected by laws are obviously a positive fact for the organization since it protects
company from every harm coming from internal and external environment of the business. But
also, it’s a negative point when it comes to deal with disruptive employees which covered by
those laws since they can’t deal with them in a proper way. Adhering to all those safety
regulations also a positive fact since the company is safe guarded by them and also its customers.

1.6. ENVIRONMENTAL FACTOR
Due this current situation COVID -19 the company adhere to all the regulations impose by the
government even though it has a major impact on their business but safety of its customers and
employees are its priority, right now they can call the company customer services for its service
and get their work done. And also, they annually do a corporate social responsibility (CSR)
project but due to this situation they haven’t done it in two years. Still, they manage to keep their
customer loyalty.
This current pandemic has a huge negative impact on the business since it spreading faster than
anyone thought, since our customers do their daily action with us it’s a negative point for the
business. But being stable even though this pandemic they keep their customers satisfied it’s a
positive factor for the organization.
FACTOR POSITIVES NEGATIVES
POLITICAL  Due to current interest
rates more gain to the
company.
 Since they used to
give the best rates for
fixed deposit and
personal loan still,
they have loyal
customer base.
 Losing some of their
customers due to the
current situation and
government stability.
 Hard to make
decisions due to this
current situation they
are facing.
ECONOMIC  Since we they keeping
their stability, they
still have reassurance
of their customers.
 Even though
unemployment is a
 Not getting new
customers dur to the
current inflation.
 Losing existing
customers due to the
interest rates drop.

bad thing it’s a benefit
to the company.
SOCIAL  Vast customer base
due to vary services
they are providing.
 Increase of attitude
towards the
investment and
savings.
 Due to this current
situation change of
lifestyles.
TECHNOLOGICAL  Vast range of
technologies to use for
the company’s
betterment
 Different social
platform of
technology to promote
the business
 The lack of
understanding of the
different technology
and new technology to
older people
 The new technology is
costly and have to
maintain in a proper
way.
LEGAL  It is easy to handle
and take care of
official matters since
there are laws against
those factors.
 If the company is
correct against the
law, they don’t have
to be afraid of getting
any law suits they are
covered from the
 We have to adhere to
every law binding to
employee and
customer and we
cannot bypass any
factors.
 If the company go
against any law, it is
most likely to get us
to the court for simple
matters and it a huge

respective laws. loss for them.
ENVIROMENTAL  they got to be more
careful about the
health and the safety
of all around them and
the company.
 they got to experience
their customer loyalty
even the time is bad
for them and for the
industry.
 Due to current
situation, they cannot
provide the services
they are obliged to
their customers.
 Customers cannot
visit the offices at
their convenient for
their official matters.
2. SWOT Analysis on LB Finance
2.1. STRENGTHS
 Multi-talented and experienced workforce
 Diversified ethnic groups with equal opportunities to be successful and achieve their
potential
 Skillful and well-qualified management team
 Being one of the top brands in Sri Lanka with a positive conduct and value-based
environment
2.2. WEEKNESSES
 Millennial workforce commonly low employee engagement
 High internal competition turn to employee dis-satisfaction is not properly managed

 Some employees cannot cope with performance driven culture
2.3. OPPORTUNITIES
 Ability to attract skilled workforce locally and overseas
 Availability of enough sources to attract
 Cater to new market segments
2.4. THREATS
 Brain drains to rivals
 Changes in employee regulations and governance
 Reduction in newer generation willingness to perform sales jobs
2.5. SWOT TO TOWS Analysis
2.5.1. Strengths to threats
 Being a top brand of Sri Lanka among the few finance companies and banks it is an
advantage among their competitors and also they do most of the CSR work to keep their
customers loyalty and trust. Because of having a recognized brand name it is easy make
lot of decisions for the company and its benefit.
 And having a skillful and well qualified management team and multi-talented workforce
the company can encourage them to encourage the younger newer generation to join and
work with the organization and recruiting them and selecting them for the job roles they
acquired their qualified management team is a really help it is an advantage for the
company since they don’t have to hire third party to perform that part of the HRM
function.

 Having different cultures and religious employees working for the company use that in a
positive way to show outside a good image of the company for attract more employees
and customers.
2.5.2. Strengths to Opportunities
 Same as above mentioned being a top brand in Sri Lanka use that as an advantage to
reach new segments of markets and widen the business area to gain more profit and
bigger customer base.
 Since they have a skillful and multi-talented workforce use that to attract new and fresh
youngsters to the company and use their new ideas and innovation for the betterment of
company future.
 Use their brand name to gain the new sources of investment for the company.
2.5.3. Weaknesses to Opportunities
 Encourage the millennials to join and work with the company using their company brand
name and CSR done by them and the achievements they have reached to be where they
are now and give them new opportunities to handle and make them interest on what they
do.
 Use the new sources to cater internal workforce satisfaction to work hard and give them
goals to so that they will be satisfied and reaching their goals the company also
automatically become profitable.
 Use teamwork programs and social events for employees to experience other cultures
and different attitudes of the people they work among so they get used to them and work
as a family.

2.5.4. Weakness to Threats
 Keep their brand a straight and quality service all the time to make sure they are giving
the best services to their loyal customers to keep their brand name at the top of the
industry and give a good competition to their rivals.
 Make their existing employees encouraged at all time to show the newer members
attracted to the trade and make a competition among them to get into working in the
finance field.
Conclusion,
From all the fact above mention most of the company decision are based on above factors to
reach the company objectives. Their management decision all base on and towards to become a
major player in the financial industry. They have to work hard to become the best in the industry
so from above factors we take seriously and all the employees are given a major role in all
function and goals they have to reach.
3. HOW STRENGTHS AND WEAKNESSES OF THE ORGANIZATION
INTERRELATE WITH EXTERNAL MACRO FACTOR AND INFLUENCE
COMPANY OPERATIONS.
The macro-environment is more general - it is the environment in the economy itself. It has an
effect on how all business groups operate, perform, make decisions, and form strategies

simultaneously. It is quite dynamic, which means that a business has to constantly track its
changes.
All the strengths and weaknesses of the organization depend on the external macro factor also
known as PESTLE factor. These factors have uncontrollable influence on how organization
decisions and strategies are being taken. And it can change from time to time depending the
PESTLE changes. These factors can be either good or bad but it’s the management responsibility
to take good decisions depending on the changes happen on above factors. As an example, the
current situation covid-19 is an external macro factor so all the organization operation are
changing according the situation like those organizational strengths and weaknesses are
interrelate with those factors and they influence all the operational requirements to change
according to that.
4. CRITICALLY IVALUATE THE IMPACT THAT BOTH MACRO AND
MICRO FACTORS HAVE UPON THE BUSINESS OBJECTIVES AND
DECISION MAKING.
What is the micro-environment?
The micro-environment is basically the environment that has a direct impact on your business. It
is related to the particular area where your company operates and can directly affect all of your
business processes. it consists of all the factors that affect particularly your business. They have
the ability to influence your daily proceedings and general performance of the company. Still,
the effect that they have is not a long-lasting one.
The micro-environment includes customers, suppliers, resellers, competitors, and the general
public.
What is the macro-environment?
The macro-environment is more general - it is the environment in the economy itself. It has an
effect on how all business groups operate, perform, make decisions, and form
strategies simultaneously. It is quite dynamic, which means that a business has to constantly