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.