Business and Business Environment

This presentation discusses the various factors of the macro environment and their impact on businesses, with a focus on the banking sector. It also analyzes the internal and external analysis of Santander Bank using the SWOT technique. The presentation provides insights into the strengths, weaknesses, opportunities, and threats of the bank, as well as the interrelation of these factors with the macro environment.

Business and Business
Environment
(TASK3 & 4)

INTRODUCTION
Business environment of an organisation constitutes various
factors which creates a great impact on operational
activities. It includes changes in technologies, need of Eco-
friendly, ethical consideration and more which impacts
either in direct or indirect more.

Factors of Macro Environment

Positive and Negative impact of macro environment
Due to innovation and fast developing world, factors present in
environment impacts on every kind of business in both
positive and negative manner. Macro environment constitute
various external factors which are generally beyond out of
control from management of an enterprise.

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Political factors: Business of banking sector looks most
powerful but governmental laws acts as bigger giant in
increasing profitability.
Positive impact: New 8% government surcharge on banks
of UK generate high profitability.
Negative impact: New taxation policies, trade and tariff
controls, social and employment legislations etc. create a
great impact on business of banks.

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Economic factor: Economical conditions of a nation and
banking industry are economically tied with each other.
Positive impact: If economical condition of people is not
good then they used to borrow loans from banks.
Negative impact: Due to fluctuations in currency rates,
inflation period, stability and more, banks experiences
the backlash.

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Social factors: Purchasing behaviour of people and necessities
reveal the way they used banking services.
Positive impact: When society of a country develop more and
have high educated then they use much banking options which
create a positive impact on financial institutions.
Negative impact: Similarly, when education and level of
knowledge of people is low then they ignore to use services of
banks like depositing their money or taking loans and more.

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Technological factors: Innovative and updated technology aids banks
like Santander in providing much beneficial services to customers
like online banking, pay bills on smartphones, transfer funds etc.
Positive impact: Due to development of technology like ATM, scanning
cheques by smartphones and more help banks to get retention of
clients in a better manner.
Negative impact: It negatively impact on employment as adoption of
latest technology reduces requirement of human resource in banks
and other organisation which increases unemployment

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Legal factor: Legislation laws made by regulatory bodies of a nation are much
based on improving condition of people as well as save personal information
of them. It also helps in reducing corruption and other illegal activities occur
at enterprises by strictly imposing laws on them.
Positive impact: Laws and regulations help banks and other organisation in
carrying business operations in a legal and smooth manner.
Negative impact: By strictly following rules related to privacy, trade
structures and consumer laws etc. affect profitability of business.

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Environmental effect: Due to global factors and rise in globalisation,
organisations as well as government care less about environment. It leads to
rise to global warming therefore, to reduce it regulatory bodies of UK has
imposed various laws on enterprises which may put both positive and
negative impact in following manner:-
Positive impact: The greatest positive impact of environmental factors is that
using online banking and mobile app techniques help in reducing usage of
paper.
Negative impact: As online applications, usage of smartphones and more
reflects techno-friendly behaviour rather than Eco-friendly so it shows
negative impact.

Internal and External analysis of company to identify strengths
and weakness
In order to analyse internal and external analysis of business
environment management of a firm like Santander Bank used
SWOT technique in following manner:-
STRENGTHS:
It is one of the largest bank of UK in terms of giving mortgages
and taking deposits.
Having retention of 25 million customers as well as more than
20,000 employees shows greatest strengths of Santander Bank.

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WEAKNESSES:
Due to presence of various banks in a single street, it results of
various mergers and acquisition.
This financial institution has rated recently as one of the worst
bank in UK due to ineffective customer service.

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OPPORTUNITIES:
Through introducing innovative schemes like 123 product range,
improving services and opening new branches in urban areas
give opportunities to this bank in improving its reputation and
expanding business.
Adoption of latest technologies and giving better facilities to
customers aid this firm in grabbing more attention of them.

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THREATS:
Presence of many competitors like HSBC, Royal Bank of Scotland,
Barclays and more creates a major threat in increasing growth of
Santander Bank.
If interest rate move against liabilities then this bank will face
various issues in running business properly.

Interrelation of strength and weakness of company with macro
factors.
For analysing relationship of different components, management of Santander
Bank needs to analyse factors of micro and macro environment. In this
process, PEST/PESTLE
Political: Due to changes in government rules and polices, it creates a great
impact on growth of business and its operational activities.
Strength: It helps in conducting business operations in a proper manner.
Weakness: Control over activities of business has shown major weakness of
external environment on enterprises.

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Economical: Changes in Interest rate, currency rates, inflation and
deflation period etc. impacts on economical condition of people which
affects business of banks also.
Strength: If economy of country is good then banks of other countries
used to lend loans from financial institution from them. This would
enhance growth of business of Santander Bank also.
Weakness: But if interest is high then people will avoid to take loan
from finance institution.

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Social: Preferences, education ad background level of people also
impact on business of banks.
Strength: Change of lifestyle and status of people, they used debit
and credit type facilities instead of keeping cash which
increases efficiencies of bank.
Weakness: Demand of ethical business from banks impacts on
operational activity of banks and other institutions.

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Technological: Using latest tools and innovative techniques, Banks
can deliver better services to customers.
Strength: Usage of technique like 123 product range has aid
Santander Bank as third best firm in UK.
Weakness: Introduction of latest technologies in business demand
more finance.

CONCLUSION
From this mentioned report, it has concluded that business
environment of a company is filled with various
opportunities through which a company can gain
advantage to expand its operations in major sector.

REFERENCES
Chetwood, M. K.,and et. Al, 2014. Transforming
a legacy IT infrastructure into an on-demand
operating environment. U.S. Patent
8,775,232.
Crane, A. and Matten, D., 2016. Business ethics:
Managing corporate citizenship and
sustainability in the age of globalization.
Oxford University Press.

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