Business Environment Analysis and SWOT Analysis

The report provides an in-depth analysis of the business environment in Yorkshire, including the organizational structure of Halifax and ghd, which are clients of Yorkshire. It also explores the interrelationship between external and internal factors affecting businesses in Yorkshire. The report uses PESTLE analysis to examine the impact of macro factors on businesses and SWOT analysis to identify strengths, weaknesses, opportunities, and threats. It is a useful resource for students studying business management and entrepreneurship.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Presenting different types and purpose of organization..............................................................1
Explaining the size and scope of different types of organization...............................................2
TASK 2............................................................................................................................................4
Explaining the relationship between different organizational functions and how it helps to
attain the objectives.....................................................................................................................4
TASK 3............................................................................................................................................6
Identifying the positive and negative impact upon Yorkshire by using PESTLE analysis........6
TASK 4............................................................................................................................................8
Identifying the strength and weaknesses by using SWOT analysis............................................8
Explaining how strength and weaknesses interrelated with external macro factors.................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment plays an effective role in every business such that it is a sum total
of all the external and internal factors that keep influences the business and its performance level.
The report main objective is to understood the deep meaning of the external and internal factors.
The report is based upon a case scenario of Yorkshire Bank which is one of the top and leading
bank in UK who operates more than 4000 offices at world level. Quoted firm also provides range
of financial services such as commercial banking, investment banking and market personal
financial services. The report explains the different types and purpose of an organization with
their legal structure, size and scope. Further it describes relationship between different
organizational functions of two clients of the banks and how they link with a firm's objectives.
Moreover, report identifies positive and negative impact of macro and micro environment by
using PESTLE and SWOT analysis and then explains how the strength and weaknesses are
interrelates with external factors.
TASK 1
Presenting different types and purpose of organization
In UK, there are different types of business and they all have different objectives and
some of them are as follows:
Public Sector: This sector includes the public goods and some governmental services
and their main aim is to serve for the welfare of the country, they did not produce the goods for
profit maximization. This sector is governed by government and financed by the local
government (Charter, 2017).
For example, Halifax is a public limited company which is a client of Yorkshire Bank.
Private Sector: The main objectives of private sector is to earn profit and run a business
towards a success. This sector is run by the private and individual groups and it does not control
by the state. Further this sector is one of the largest sector in UK in which government imposes
very low restriction on a business but it has been realised that it contributed some part for the
growth of an economy (Erasmus, Strydom and Rudansky-Kloppers, 2016).
For example, GHD is a private company who is another client of Yorkshire and it is a
multinational technical professional service who provides engineers and architecture a consulting
management services.
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Voluntary Sector: This sector is also known as third sector because it is a contrast to the
public and private sector (Laudon and Traver, 2016). This sector main aim is to serve for the
welfare of the society and its main purpose is to benefit and enrich society without a motive of
profit earning. This sector have no government intervention and whatever the profit is earned
that is invested back into the community or an organization itself.
For example, Co- op is a voluntary sector in which the Yorkshire bank provides financial
services in order to enrich the society.
Explaining the size and scope of different types of organization
Basis of
comparison
Public sector Private sector Voluntary sector
Size and Scope In UK, the size and scope
of public sector is wide
such that this sector
contributes around $
44,000 GDP per capita.
In UK, there are around
83 percent of the firm
which are listed private
and this shows that the
size is wide as
compared to other
sector (Fatehi and Choi,
2019).
The voluntary sector
did not share as much
amount and the scope
is also limited and this
shows that the size and
scope is limited as
compared to other
sectors.
Objectives This sector main objective
is to provide services for
the welfare of the public
and to raise the economy
of the country (Turner,
2019).
Their main objective is
to maximize the profit
by offering high quality
of products and services
to their customers.
Voluntary sector also
serve for the welfare
of a society and they
are more focused on
social wealth.
Legal structure The legal structure of
public sector is such that it
must have 3 directors and
it is controlled by the
government.
The legal structure of
private sector is such
that it must have at least
2 directors and at least
15 directors and the
The legal structure of
voluntary sector is
such that it is also
controlled by the
government and
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ownership of the firm is
run by an individual.
directors must have to
follow all the duties
which are come under
the Companies Act,
2006 (Recica and
et.al., 2019).
Advantages  Charges are
minimal and have
expert
administrative
services.
 This sector also
ensures an efficient
control of an
industry.
 The biggest
advantage of
this sector is
such that it is
restricted from
the liability.
 The sector also
have less
bureaucracy and
creates more
opportunities for
promotions
(Beatty,
Samuelson and
Abril, 2018).
 It helps to
work for the
welfare of a
society and
also enriches
the society.
 Also creates
social wealth
rather than
material
wealth.
Disadvantage  Lack of
competition also
leads to higher
prices.
 It has political
pressure and
corruptions.
 The sector is
very
competitive and
also have high
pressure
environment.
 This sector has
less job security.
 It is less
reliable as
compared to
other sector.
 This sector are
not closely
regulated and it
requires fund
to conduct the
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project in
further mode.
TASK 2
Explaining the relationship between different organizational functions and how it helps to attain
the objectives
As the Yorkshire have many clients because the firm is operated at global level and two
clients are ghd and Haliflax which are the top firm in UK.
Haliflax is the public company and follows flat structure such that it has a fewer
management level and each level controlling a broad area (Kopnina and Blewitt, 2018). This
type of organization focus on appoint the employees rather than match to a chain of a command.
In this type of structure the leaders or the managers also shares the research and information
instead of hoarding such that they are quite flexible and easily able to attend the changes as
compared to other structure.
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Illustration 1: Flat structure of Haliflax
(Source: Flat structure, 2018)

Ghd follows tall structure because the company operates at global level and as the
organization increases the structure also grows taller. It has more management level and all the
departments of the firm perform well. It has been analysed that tall structure is followed by large
organization and all the employees are ranked from high to low and it also require a rigid
hierarchy to maintain the workplace efficiency.
Organizational Functions of Yorkshire: The firm have different departments and they
are interlinked with each other and they work together in order to achieve the defined objectives
of the firm. These departments are as follows:
Human Resource department:This plays a significant role in a company such that it
provides training sessions to the new employees and also recruit the best candidate for vacant
seats (Wright, 2018). They also monitor all the department and make new policies in order to run
a business towards a success. Apart from this, this department also interlinked with R&D,
operational department in order to determine the needs of their customers so that they tells to
production department to produces the same type of products.
Research and developmental department: This department of Yorkshire helps to
research for new product and also makes changes in their existing products (Hakansson, 2015).
This department also identifies the needs of their customers and tells to production department to
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Illustration 2: Tall structure of ghd
(Source: Tall structure, 2018)

produce the services accordingly. Apart from this, R&D also checks the quality of the offered
products and allows the team members to ensure that services are meet with the standards.
Operational department: This department keep the business running efficiently and
also makes sure that the delivery of the products are on time. Further it also keep coordinating
with other department and also measures that the firm is satisfy the needs of their customers or
not. The department keep connecting with research and development department in order to
produce those services which are needed by the customers. In this way the department also
interrelated with other organizational functions and keep the business up to date and helps to
increase the financial performance (Love and et.al., 2015).
Finance department: This is another major functional department of Yorkshire which is
responsible for the management of an organization cash-flow and provide enough fund to each
different department in order to meet out day to day payments. Further this also deals with
planning, organizing and auditing the finance and also produces company's financial statement
that shows the exact profit earning and loss bear by a firm.
This functional department shows that they are interlinked with each other and work
together in order to achieve the business goals. Such that Operational department keep run the
business effectively and monitor all different department while HR department solve complex
problem of their employees and maintain employer- employee relation in order to run a business
in effective manner. Therefore, this shows that the organizational structure and structure are
interlinked.
TASK 3
Identifying the positive and negative impact upon Yorkshire by using PESTLE analysis
Political factor: This factor plays a significant role in order to determine the factor that
creates impact upon the Yorkshire bank (Hamilton and Webster, 2018). As the quoted bank is
operates in many countries, therefore it exposes itself to different types of political environment.
Apart from this, the bank also affected from the tax rates and government intervention and it
directly creates negative impact upon the firm.
 Negative impact: If the country's political situation is not stable then it affect the
business in negative way such that the financial performance of Yorkshire bank got
affected.
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 Positive Impact: political factor also creates positive impact upon the business
performance such that it is quite necessary for the firm to keep compliance with all the
tax rates and laws so that it helps for the smooth functioning of a business (Andersson
Forsgren and Holm, 2015).
Economic Factor: This factor is directly linked with the economy of UK such that its
inflation rates, saving rates and foreign exchange rates. As the quoted firm also have different
strategies in order to cope with this situation such if the country has growing economy then it is
beneficial for the banks to raise its profit and productivity.
 Positive impact: Economic factor creates positive impact when the inflation rate is in
control then the bank offer different variety of services to their customers and people also
enjoys this.
 Negative impact: when the economy of the country is not stable then it affects the
business in negative way, because customer do not want to invest in bank because of
higher price rates and as a result, the financial performance of bank decline.
Social Factor: Society's culture and the way of doing things also creates the impact upon
the culture of Yorkshire Bank. Shared belief and attitude of people also plays a significant role in
the bank (Chang, 2016).
 Positive impact: This factor creates positive impact upon the business such that cultural
influence such as buying behaviour and the necessities affect the people how to use the
banking options and they also desire a seamless banking experience which raise the
financial performance.
 Negative impact: Changes in socio- cultural also affect the system in negative way such
that the customer uses online banking and as a result, Yorkshire has to pay online
services though it is cost effective.
Technological Factor: the factor helps an industry to raise their current business such
that adopting new techniques into workplace helps to raise the business financially.
 Positive impact: Adopting new techniques leads to raise the business such that lower
down the rates of services which are offered to their customers and creates impact upon
the cost structure.
 Negative impact: the confidentiality is not maintained and as a result, it creates negative
impact upon a business (Erasmus, Strydom and Rudansky-Kloppers, 2016).
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Legal Factor: As Yorkshire is operated in many countries then it is quite necessary for
the firm to keep compliance with all laws which are described by the government such as Anti-
trust law, discrimination law and copyright.
 Positive impact: The factor create positive impact only when the quoted firm keep
adhering all laws and evaluate them as well before entering into new emerging markets.
 Negative impact: This creates negative impact upon the firm such that if the company
did not follow any law then the entire system got affected and also leave negative
impression upon customer's mindset.
Environmental Factor: By using advance technologies into working area which creates
positive impact and also reduces the use of paper. Even customer also apply online bank
transaction which leads to reduces the environmental footprints (Charter, 2017).
 Positive impact: The firm also uses sustainable act which creates positive impact and
helps to protect the environment.
 Negative impact: If the business did not comply with laws related to environment then it
creates negative impact upon business and leads to lower down the image as well.
TASK 4
Identifying the strength and weaknesses by using SWOT analysis
To determine the internal business environment, SWOT analysis is helpful which is a tool
to determine strength and weaknesses.
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Strength: It has a brand image in market and also provide the best financial services to
their customers at global level. It also increases its pre- tax earnings and then reduces its bad-
debts provision that clearly reflects its high quality of assets (Laudon and Traver, 2016).
Yorkshire also makes its efforts in order to reduce the expenses which creates obstacles in its
financial performance. In 2014, the bank is also awarded for its best new current account and
thus, it shows that it have a brand image in market.
Weaknesses:If the currency of UK is slows down then it directly it the financial
performance of business. In London, many branches of Yorkshire also shut down that leads to
reduce its customers and employee confidence (Fatehi and Choi, 2019). Moreover, it had to cut
its employees which leads to lower down the morale of employment and also affect the quality of
the services offered by bank.
Opportunities: Yorkshire has an opportunity to expand its customer base only by
providing the best financial services to their customers. As tit operates its unit at global level
then it may come up with innovative financial products such as low rate loan scheme which help
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Illustration 3: SWOT Analysis
(Source: SWOT Analysis, 2018)

bank to attract their customers towards them. Apart from this, Yorkshire also increases its
customer base by expanding its current business across cities that helps to draw attention of
many customers towards them.
Threats: The biggest threat for Yorkshire is such that it faces tough competition from its
rival firm such as Barclays and UBS who also offer similar financial services to their customers.
Another risk is, bank faces default risk of obligation by counter party that affect brand image of a
firm in negative manner (Turner, 2019). Apart from this, Yorkshire also faces interest rate risk
because of adverse movement of market against it, this force Yorkshire bank to lower down the
interest rate to raise its performance level. Moreover, the bank also faces some risk due to the
movement of foreign exchange rates that creates negative effect upon a business.
Explaining how strength and weaknesses interrelated with external macro factors
From the above it has been analysed that PEST is only focus on external environmental
factor while SWOT focuses on internal factor and its interrelationship also affect the decision
making of business. Such that the technological factor of external environment do affect the
opportunity of Yorkshire such that as the firm introduces new technology then it creates new
opportunities to raise the profit of a firm and directly it affect the decision making process. Apart
from this, adopting new technique into the workplace will also help to upgrade customer service
and as a result it sustain the brand image in market. In the same way, in order to emerge into new
market, it is quite necessary for a firm to keep evaluate the political stability otherwise it creates
the negative effect on the strength of Yorkshire (Relationship between internal and external
environment, 2018).
However, it has been critically evaluated that by identify the needs of the people and then
produces the same services will also create another opportunities for a firm to maintained its
strength. For example, by offering low interest rate financial services as per the demand of their
customers will help to act another opportunity for Yorkshire. Moreover, economic factor is also
related to its weakness such that if the country's economy is not stable then it affect the business
performance and it has been analysed that in London, Yorkshire branches are closed and it also
reduces its customer base that affect the business in negative way.
Apart from this, it is also critically evaluated that economy factor also interrelated with
threats such that as the company faces risk because of fluctuating movement of foreign exchange
rate and this also affect the business in negative way (Recica and et.al., 2019). If the economy of
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a country is stable then it helps to creates positive impact upon business and also raises its
financial performance as well. Thus, this factor also affect the decision making process such that
due to adopting new techniques into workplace helps to take the right decision and leads towards
a further level of success.
CONCLUSION
By summing up above report it has been concluded that business environment affect the
working culture of the business in positive as well as negative way. As report concluded that
there are in UK there are different types of organization such as public, private and voluntary and
they all have their own objectives in order to run a business. Further report concluded that in UK,
the public and private sector business have large scope and size as compared to voluntary sector.
Apart from this, report also concluded different organizational structure of ghd and Halifax who
are the clients of Yorkshire and also shows the interrelationship between different organizational
function and they all work together in order to achieve the business objectives. Further report
also concluded the negative and positive impact upon the business of some macro factors by
using PESTLE analysis and shows its strength, weaknesses by using SWOT analysis. Lastly.
Report concluded interrelationship between external and internal factors.
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REFERENCES
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Cengage Learning.
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Charter, M., 2017. Greener marketing: A responsible approach to business. Routledge.
Erasmus, B., Strydom, J. W. and Rudansky-Kloppers, S. eds., 2016. Introduction to business
management. Oxford University Press Southern Africa.
Fatehi, K. and Choi, J., 2019. International Business Management. Springer Texts in Business
and Economics.
Hakansson, H., 2015. Industrial Technological Development (Routledge Revivals): A Network
Approach. Routledge.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Kopnina, H. and Blewitt, J., 2018. Sustainable business: Key issues. Routledge.
Laudon, K. C. and Traver, C. G., 2016. E-commerce: business, technology, society.
Love, D. C. and et.al., 2015. Commercial bank production and profitability: Findings from an
international survey.435. pp.67-74.
Recica, F. and et.al., 2019. Innovation and the export performance of firms in transition
economies: The relevance of the business environment and the stage of transition.
Turner, S. J., 2019. Business Practices, Human Rights and the Environment.
Wright, P., 2018. Fundamentals of human resource management. Management. 5. p.27.
Online
Relationship between internal and external environment. 2018. [Online]. Available through:
<https://smallbusiness.chron.com/relationships-between-pest-swot-10083.html>.
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