Concept and Impact of Business Environment

This presentation covers the concept and meaning of business environment, the impact of macro environmental factors on business operations, and the relationship between the strengths and weaknesses of NATWEST bank and external factors. It also includes a PESTLE analysis and discusses the social, technological, political, legal, and economic forces that affect the bank. The presentation concludes with a discussion on the SWOT analysis and the importance of understanding the external macro environmental factors.

Business and
Business
Enviroment

Contents covered
Following contents are covered in this ppt:
Concept of business environment
Impact/influence of macro environmental factors on Business
operations
Determining the Strength and weaknesses of NATWEST and
explaining their relationship with external macro
environmental factors
References

Concept and meaning of business
environment
Business environment refers to the all circumstances and
situation surrounding business. It includes basically two terms
that is business and environment. Business refers to the
economic system where products and services are exchanged
for one another for earning income as well as profit.
Environment is defined as the aggregate of all surroundings of
living things hat includes natural factors' and other living
organism that supports business in their growth as well as
development. In addition to this it also may lead to threats and
damages

Impact/influence of macro
environmental factors on Business
operationsMacro environmental are major elements that are uncontrollable
in nature and have great impact on various business activities.
These variables also have great effect on the sustainability,
profitability and growth of Bank. It has great influence on
employees, organisation policies, strategies as well as
decisions. The macro environmental elements include social,
technological, political, legal, economical and environmental
forces. Macro environmental factors have great effect on
overall development and growth of organisation.

PESTLE analysis
PESTLE analysis is an effective tool that can be used to
determine and identify the impact/influence of various
external factors on business. It also suggests various strategies
that can be used by firm for reducing the impact of these
forces on enterprise.
Economic Factors-As NATWEST is operating in banking sector
it has great influenced of economic forces on its business
activities. The growth of banks and economic factors are
interrelated. The economic growth or development of country
has positive impact on banks. Other economic forces such as
recession , economy breakdown, have great influence on the
investment policies that is offered by banks to its customers.

Political factors- These variables includes various boundaries,
code of conduct that are established by political parties are
need to be comply by banks. As these elements support
organisations to identifying various sources of investment and
allow them to increase their profitability and enhanced growth.
The involvement of legal authorities is essential as these
parties support firm in managing and establishing in their
position in banking market. Various political elements that
have negative impact on enterprise are Laws, corruption, tax
policies deregulated trend etc. These variables have great
influence as well as effect on business entity goodwill and
market share. It also assists business entity in reducing
competition.

Technological factors-These are the supportive forces that assist
banking industry in maintaining the record of customer,
recording transaction, and providing quick services as well as
additional facilities to its customer. It has provided
organisation an opportunity to attract more number of
customer by providing them with online transaction facilities.
These variables have allowed business unity to improve
quality of services and enabled therm to maintain healthy
relationship with customer. Technological factors may lead to
additional cost for firm and it has great influence on
employees as well. As increase in used of technology
organisation may create threat for them to lose job.

Social factors-These factors have great effect on the firm
profitability and revenue generation capacity. The various
social variables includes The growth of population, attitudes,
saving as well spending habit of individual, social and cultural
changes. These forces have great influence on various scheme
formulated by bank manager in order to attract clients. Social
factors have great impact on profitability of organisation. It
has also have great influence on marketing strategy of
NATWEST.

Legal factors-These forces have long termed impact on banks.
These variables include trade structure, laws related to
banking practices, currency regulation, etc. These forces have
great effect on the organisation sustainability and growth.
Change in various laws such as consumer, employment
legislation, health and safety law have great effect on the
growth and sustainability of firm. It also has great impact on
the various banking activities and services provided by them

Determining the Strength and weaknesses and
explaining their relationship with external macro
environmental factors
The swot analysis technique can be used to identify the strength,
weakness, opportunity and threats of NATWAST bank. This
model will assist business entity in analysing the ways for
overcoming weaknesses, reducing threats, exploring and
capturing various business opportunities in market. It also
assist bank manager in formulating suitable strategy to reduce
the impact of various macro environmental factors on their
business activities
Strength:
The banking company has expert team of employees that provide
effective as well as diversified solutions to its clients.
It has attractive as well as advanced Information technological
structure.

Weaknesses:
Damaged brand image due to controversies.
Do not emphasize on market penetration.
Opportunities:
Fostering growth.
The company has opportunity to expand its operations.
As NATWEST has wide customer base it can enter into
emerging market.

Relationship with external macro
environmental factors
Macro Environment factors are more concerned with variables
such as economic and non-economic factors like social
concerns, government policies, family that have great impact
on banks.
The external factors which is present outside the bank adversely
have adverse effect on its performance and goals.
If NATWAST bank is strong, then it can be exposed to a greater
level of threats than weaker organization.

Reference
Adebisi, S. A., Azeez, O. O. and Oyedeji, R., 2016.
Appraising the Effect of Boko Haram Insurgency
on the Agricultural Sector of Nigerian Business
Environment. Journal of Business Systems,
Governance & Ethics.11(1).
Caiazza, R., Shimizu, K. and Yoshikawa, T., 2017. Cross‐
Border M&A: Challenges and Opportunities in Global
Business Environment. Thunderbird International Business
Review.59(2). pp.147-151.

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