PESTLE Analysis of Business Environment

This presentation provides an overview of the PESTLE analysis of the business environment. It discusses the political, economic, social, technological, legal, and environmental factors that can affect an organization. It also includes a SWOT analysis of NatWest bank.

Business and
Business
Environment

PESTLE analysis
There are several factors that can affect the organisation in terms of
decision making, profitability, productivity etc. which is classified into
two categories that are micro and macro. Macro factors are those
which is not in the hand of company, they change as the economy
changes. It includes external elements that are political, social,
technological etc.

Political Factors
Nowadays NatWest is fighting for the survival because government is
serving support to all the banks for the intervening. As fears of
recession growth, the Bank of England, the European Central Bank
and the US Federal Reserve, each bank have announced an
emergency 0.5% cut in interest rates, But this new move has had only
a limited impact on the troubled stock markets. However, NatWest did
not want help from the UK government in the current economic crisis
instead they raised cash from Middle Eastern investors.

Economic Factors
These elements have been linked with the political environment, which
includes the future and current state of main economic factors which is
used to communicate the purchasing power, wealth, consumption and
saving with the government economic politics that deployed to affect
those factors. These all factors inflation, exchange rates and interest
rates and these will have great impact on the prices, cost, profitability
and competitiveness of the company. It is very important for the
NatWest to identify, monitor and forecast those economic factors to
which the company's market effort is large sensitive.

Social factors
There is complexity in demographics which includes changes in
population features educational standards, lifestyle attitudes, culture
and beliefs. The way the customer think, behave and buy are the
outcome of the difficult cultural conditioning by the friends, family,
peers, work and school as well as media. These are the condition
which help the customer to decide what to buy, when and where to buy
it or can be brought at cash or credit. Before 20 years ago, 30% of
people buy the product because they like that not they need that, but
nowadays it is totally different, organisation need to understand that
there is change in the demographic trends in their company as well as
change in social climate in various parts of the world

Technological factors
Technology have become the most significant factor that can affect the
business in the recent time. As the development of the information
technology have created a large impact on the banking industry. And
these factors have created opportunities for several business man in
the banking area. There are many technological tools such as email,
use of fax and internal have made all the transaction easy and fast for
the banks as well as customer. Nowadays, customer need not to go
bank to deposit their cash, fund transfer etc. Introduction of mobile
banking application have made all the transaction easy.

Legal and Environmental Factors
Different banks are controlled and managed by the various laws and
agencies in the different countries. Recently in the UK, single banking
licence have been implemented which allow different bankers to open
their branches in the UK. The government have put pressure on the
NatWest bank so that they can able to restore the British Treasury in
2009
It deals with the environmental related problems of the bank. The
location of the country where the bank have set up their branch and
traders, matters a lot to the company and customers. Also, climate
changes alter the bank procedures and ways of consumption that
respond to the market.

SWOT analysis of the NatWest.
Strength
• They have the track record to develop the new
and innovative products
• They have the strong distribution network
which help them to reach at the majority of the
customers.

Weakness
• They are not able to difficult challenges which
is arising due to new entrance in the banking
sector.
• They need more investment for adopting new
technology as their competitors have adopted
already.

Opportunities.
• There is new taxation policy which have affect
the organisation process of doing the business
and have opportunity to open new branches in
the country.
• New technology help them to reduce their
price of their products which help them to
attract large customers.

Threats
• The organisation is operating in the several
counties so their currency fluctuation effect the
company.
• Rising raw material can pose a threat to the
NatWest profitability.

References
Aguilar, F.J., 2017. Scanning the business environment. Macmillan.
Davis, K. and Blomstrom, R. L., 2016. Business and its environment.
McGraw-Hill.
Kennerley, M. and Neely, A., 2013. Measuring performance in a changing
business environment. International Journal of Operations & Production
Management. 23(2). pp.213-229.
Buchholz, R. A., 2016. Business environment and public policy: implications
for management and strategy formulation. Prentice Hall.