Analyzing the Impact of Macro Environment on Starling Bank's Strategies

This report analyzes the impact and influence of the macro environment on Starling Bank's strategies. It explores frameworks like PESTEL analysis, stakeholder analysis, and Ansoff matrix to understand the external and internal factors affecting the bank's growth and success. The report also discusses the competitive forces in the market sector and provides strategic planning recommendations for Starling Bank.

BUSINESS STRATEGY

Contents
INTRODUCTION.......................................................................................................................................3
PART 1.......................................................................................................................................................3
TASK 1.......................................................................................................................................................3
P1 Applying appropriate frameworks analyze the impact and influence of the macro environment on a
given organization and its strategies........................................................................................................3
TASK 2.......................................................................................................................................................5
P2 Analyze the internal environment and capabilities of a given organization using appropriate
frameworks..............................................................................................................................................5
TASK 3.......................................................................................................................................................6
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector for an
organization.............................................................................................................................................6
PART 2.......................................................................................................................................................6
TASK 4.......................................................................................................................................................6
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for a
given organization...................................................................................................................................6

INTRODUCTION
Business strategy is very important for a company when it seeks to grow in the market in
the strategic manner. While putting it in simple terms, it is set of plans, goals and actions which
outline how the business shall compete in the market with its product or service. It is vital that
business must take into account many factors such as market competitors, business environment,
company’s structure, its strength, weakness and many others. The organization chosen is Starling
Bank, a digital challenger bank which is headquartered in United Kingdom. This report shall
cover the influence and impact of macro environment, capabilities of internal environment,
porter’s five forces and theories and model for strategic planning.
PART 1
TASK 1
P1 Applying appropriate frameworks analyze the impact and influence of the macro environment
on a given organization and its strategies.
Macro environment is a conditio0n which exist in whole economy rather than in
particular region. In order to analyze the influence and impact of macro environment, the
following framework is being applied which are narrated below-
PESTEL analysis
It is a framework which is used to analyze the macro factors of the economy which are
discussed below in context to starling Bank-
 Political- It consists of the political environment of the country where the business is
being operated. In relation to Starling bank, the Brexit uncertainty have delayed its
expansion in European nations which have resulted in delayed expansion of the Bank.
 Economic- It includes the economic factors like inflation, fluctuation in foreign currency
etc. The Starling Bank has been impacted by the slow economic growth of United
Kingdom due to pandemic of Covid 19. This has affected its grow and success.

 Social- It includes the socio cultural factors like demand, supply, behavior of people etc.
In relation to Starling Bank, the company has advantage that millennial are ready to adopt
the digital financial services with flexible feature which helps in attracting the young
generation which will ultimately help in growing business.
 Technological- It includes the technological up- gradation which supports the business.
The starling bank deals with digital financial services and increased cyber safety concerns
have affected the company as it may cause the loss to the company due to cyber-attack.
 Legal- The new policies in Europe have been rewritten due to general data protection
regulation which have offered to citizens of EU the protection on new level. The bank has
obligation to protect the data of its customers and comply with all GDPR regulations in
order to promote customer trust and engagement.
 Environment- It involves the environment sustainability in order to protect the
environment. In relation to starling Bank, it has an advantage of attracting customers as it
has small carbon footprint as compared to other banks which deal in digital medium. A
study showed that people get attracted to such organization which works in eco-friendly
manner.
Stakeholders analysis
The power interest matrix bifurcates the stakeholders of the company on the basis of their
power and interest in company. In context to starling Bank, the stakeholders analysis is discussed
below-
 High power- High interest- It involves the stakeholders who are required to be managed
closely. The board of directors and key personnel of bank are the one who are to be
satisfied fully and make their engagement.
 High power- less interest- It involves the stakeholders who are to be keep satisfied. In
relation to Starling bank, It includes the employees of organization who have power in
organization but keeps less interest in working. They manage the working of bank.
 Low power- High interest- It includes the stakeholders who are required to be informed
only. In relation to Starling bank, the customers are the one who have less power vut high
interest in the working of bank as they are dependent on their working.

 Low power- low interest- It includes those stakeholders who are required to be monitored
only. In context to starling bank, it includes the suppliers as they are only to be monitored
but does not require excessive communication.
Ansoff matrix
This matrix involves four different strategies which are required to be analyzed by the
company in order to plan their strategy for the future growth. Starling Bank can use any of the
following strategy in order to grow and expand. These are discussed below-
 Market penetration- It focuses on the increasing the sale of the existing product or
service in the existing market. Starling bank can use this strategy to increase its sales in
its existing market with same services.
 Product development- It focuses on introduction of new service or product in an existing
market. Starling bank may use this strategy to attract new customers in its existing
market.
 Market development- It mainly focus on entering new market with existing product or
service. This strategy shall help in expansion of the bank in new market in order capture
new market.
 Diversification- It focuses on entering new market with new offering. It involves heavy
risk as Starling bank has to enter new market with new service which has heavy risk
involved.
TASK 2
P2 Analyze the internal environment and capabilities of a given organization using appropriate
frameworks.
It is important to analyze the internal environment of company so that it can use its internal
capabilities in order to achieve its strategic objectives. The analysis of internal capabilities and
environment are discussed below using following framework-
Resource based view

It is a manegerial framework which is used to determine strategic resources of the
company so that it can be exploited in order to achieve the sustainable competitive advantage.
The key insight of this is that not all resources are of equal importance nor they have the
potential to become the source of sustainable competitive advantage.
VRIO
Mckinsey’s 7S
TASK 3
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector
for an organization.
PART 2
TASK 4
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given organization.