Business and The Business Environment

This presentation discusses the business environment and its impact on NatWest. It covers topics such as PESTLE analysis, effects of PESTLE on internationalization, impact of macro factors on NatWest, application of PESTLE analysis, SWOT analysis, application of SWOT analysis, interrelationship of SWOT analysis with external macro factors, and the impact of internal and external factors on decision making.

Business and The
Business
Environment
(Task 3 and 4)

Content Covered
 Introduction
 PESTLE Analysis
 Effects of Pestle on Internationalization
 Impact of macro factor on Nat-West
 Application of PESTLE
 SWOT analysis
 Application of SWOT
 Interrelationship of SWOT analysis with external macro factors
 Impact of internal and external factors on decision making
 References

Introduction
Business environment is highly dynamic because of increase
in competition and also growth in globalisation of world
economies.
Today, every economy in the world is connected with each
other, so up and down in one part of world can cause
collapse in another.
This presentation will describe various factors that are
required to be analysed for assessing market forces in
more effective way.

PESTLE Analysis
It is an analysis which is used by NatWest to understand
market variables and predict their course of action. It
allows banking entity in formulating strategies which are
flexible for future changes.

Effects of PESTLE on
Internationalisation
It is a very famous analysis used by companies to develop
better understanding regarding changes in market places.
It also assist in exploring new markets that are offering
better return on investment.
PESTLE analysis is used as a tool to gain brief idea about
shift in various factors that ensures that all task will be
completed in a set period of time.

Impact of Macro factor on Nat-West
Organisation bears certain impacts of potential changes that
are there in Macro environment. They need to prepare
action plans to overcome any problem that might come in
future.
The macro factors are uncontrollable forces which can
hamper organisation operations and profitability.
Example of this is, Brexit lead NatWest to limit lending as
to secure more funds to face risk and ensure long term
survival.

Application of PESTLE Analysis
The analysis allows NatWest in analysing various factors
that can hamper its ability to offer better services to
consumers.
Political and Legal: At present, the situation is very
unstable and due to changes in laws and shifts in market
forces, it is becoming very tough for banking entity to
operate.
New rules such as Project Merlin Agreement states that UK
biggest banks need to lend money to SME and reduce
bonuses as to increases market activities.

Cont.…
Economic: Currently, the growth rate of UK is near to 1%
and government aims to bring down the CPR and RPI
from 4% and 5% respectively. This need to be covered by
banking entity in a proper manner.
Social: The diversity in UK increased due to migration and
globalisation which has created different types of needs in
between consumers that has to be fulfilled by NatWest.

Cont.…
Technological: There are constant changes that are taking
place and modernising banking in the country. NatWest is
investing a lot to maintain the adaptation and integration
process. It has introduced technologies like, Block-chain,
Biometric and Automation of accounts.
Environment: NatWest has made special provision for
companies that are focusing on environment issues and
sustainable development. It assist management of these
organisation in making process more efficient.

SWOT Analysis

Application of SWOT
The SWOT analysis allows organisation in determining its
strengths and weakness which allows it in exploiting
opportunities and overcoming threats.
Strength of NatWest:
 Customer centric banking
 Visible presence in urban parts of UK
 Aggressive marketing teams
 Technologically advanced
 Good brand image
 Part of Royal bank of Scotland

Cont....
Weaknesses of NatWest:
 Many cases in courts related to mortgage
 Several auditing issues hurting organisation image
 Limited market share
These issues need to be addressed by bank as to ensure that
its operational capabilities are not hampered and all task are
timely completed.

Cont....
Opportunities:
 For-ex market
 Emerging economies in international market
Conversion of these will aid in growth in profitability.
Threats:
 Competitors
 Fluctuations in the economy
They need to be conquered as to gain competitive edge.

Interrelationship of SWOT analysis with
external macro factors
SWOT aids in developing relationship between strengths
and weakness of organisation with external factors as to
manage them and gain strategic advantage.
For example, the change in political factors directly affects
the business rules and regulations. NatWest has a strength of
integrating changes quickly which enables it in managing its
operations.

Cont....
The SWOT analysis aided NatWest in aligning its own
strengths as well as weakness with different external
changes that are taking place in market place.
For example, NatWest has a strength of aggressively
marketing for its products and registering a better
presence in the market which will assist in gaining
competitive edge.

Impact of internal and external factors
on decision making
These two environmental factors are inter-related with each
other, changes in external environment can change
internal factors.
E.g., In case of changes in lending laws, banks have to
maintain minimum rate of interest and float loans to
entities with special conditions.
The cited banking entity will be using SWOT and PESTLE
to ensure that all factors are properly analysed.

REFERENCES
Drucker, P. F., 2017. The Theory of the Business (Harvard
Business Review Classics). Harvard Business Press.
Fertel, C. and et. al., 2013. Canadian energy and climate
policies: A SWOT analysis in search of federal/provincial
coherence. Energy policy. 63. pp.1139-1150.
Fracassi, C. and Tate, G., 2012. External networking and
internal firm governance. The Journal of finance. 67(1).
pp.153-194.

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