Impact of PESTLE on Internationalization

This presentation discusses the impact of PESTLE analysis on internationalization and how it helps organizations understand foreign markets and potential. It also explores the application of PESTLE analysis in the context of NatWest, a private entity operating in Britain. The presentation covers the impact of macro factors on business, the inter-relationship between strengths and weaknesses with macro factors, and the impact of micro and macro factors on decision making. References are provided for further reading.

Business and Business
Environment
Task 3 and 4

Table of Content
• Introduction
• Pestle
• Impact of Pestle on Internationalization
• Impact of Macro factor on business
• Application of Pestle analysis
• SWOT analysis
• Inter-relationship between strength nd weakness with
macro factors
• Impact of macro factors on decision making
• References

INTRODUCTION
Business environment is very dynamic today due to increase
in competition and also integration of economies into one.
Globalisation has led world to be a more integrated system.
This presentation will state about every factor that impacts
NatWest and how the bank handles them.

PESTLE
It is a very effective tool
which allows organisations
in analysing external
environment effectively. It
has six elements which
creates a huge impact on the
organisation.

Impact of PESTLE on
Internationalisation
It is a analysis which is used by organisation for
understanding foreign market and other variables that are
existing in present macro environment.
It gives brief idea regarding how the market forces are
behaving and how they can be dealt with. PESTLE also
assist business houses in gaining better knowledge of
potential of a market.

Impact of Macro factors on business
The company is heavily impacted by changes in the Macro
environment because of which it is important to analyse it
and prepare a contingency plan to overcome certain
situation.
An example of impact due to Brexit is that Tesco, a
multinational retailer giant can not employ labour from EU.
It has to spend more and get approvals from government and
then it can employ people.

Application of PESTLE analysis
NatWest is a private entity which has operation in Britain as
its primary place. It needs to analyse macro factors to
understand variations and make changes.
Political and Legal: The current scenario is unstable due to
government shifts and market variations. Also the bank is
known to be impacted by political stability in Asia pacific
region, if there is instability then it will affect organisation.
The UK government plan to levy 2.5 billion in one year to
raise extra 800 million pounds, it will be a threat to
NatWest.

Cont...
Economic: At present UK has registered a growth of .5% in
its GDP. The aim of government is to contain CPI and RPI
below 4.5 and 5.2 respectively.
Social: As stated by office of National statistics in 2014, the
median age has increased to 40 years from 33 years in UK,
which means that there will be more older aged individual
then young.

Cont...
Technological: This includes, Block-chain technology,
biometric, automation. NatWest is investing heavily to gain
better market positioning.
Environment: NatWest is providing specified funds to the
companies which are focusing on sustainability and
environment. It is the core issue at present and top
management of companies are trying to make their
organisation more efficient.

SWOT analysis

SWOT analysis of NatWest
It is an analysis which is used as a tool to evaluate internal
as well as external factors and gain competitive advantage.
Strength of NatWest:
•Consumer related banking
•Large number of branches and ATM across UK
•Aggressive market player
•State of the Art Infrastructure
•Massive presence in Urban market
•Subsidiary of RBS

Cont...
Weaknesses of NatWest:
•Controversial history
•Bad image due to their auditing issue
•Less market penetration
There are different issues that has to be addressed and these
weakness need to be converted into strengths so that
company can use them to gain competitive edge.

Cont...
Opportunities:
•For-ex market
•Emerging economies in international market
Threats:
•Competitors
•Fluctuations in the economy

Inter-relationship between strength and
weakness with macro factors
The SWOT analysis allowed NatWest in aligning its
strengths and weakness with various macro changes that are
taking place within market place.
For example company is good with developing its brand
image and presence in market which will allow it in gaining
more consumers.
Another example of alignment is that, banking entity offers
state of the art infrastructure and keeps on investing more
for adopting new changes effectively.

Impact of Micro and Macro factors on
decision making
These two environment are inter-related to any change in
macro factor can lead to changes in micro environment.
For example, in case of changes in labour laws, the
employees might demand raise in their wages and salary as
well as ask for flexible working hours. This will be an added
cost for bank.
NatWest understand the impact of micro and macro factors
because of which it keeps on analysing both environment
with SWOT and PESTLE to ensure that they have idea what
can impact business in future.

References
Dahan, N. M. and et.al., 2010. Corporate-NGO
collaboration: Co-creating new business models for
developing markets. Long range planning. 43(2).
pp.326-342.
Fernando, A.C., 2011. Business environment. Pearson
Education India.
Gebauer, H., Paiola, M. and Edvardsson, B., 2010. Service
business development in small and medium capital
goods manufacturing companies. Managing Service
Quality: An International Journal. 20(2). pp.123-139.

Thank-You