Analysis of Internal and External Environment of Financial Services Sector and Competencies of Charles Schwab

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STRATEGIC MANAGEMENT
Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Conclusion.......................................................................................................................................9
References......................................................................................................................................11
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STRATEGIC MANAGEMENT
Introduction
The analysis of the internal and external business of a sector is very important in order to
determine the level of innovation taking place in the sector and the basis of innovation in the
sector. The analysis of the competitive landscape of an industry helps is determining the
attractiveness of the industry and also involves gaining ideas regarding the strategies which are
used for sustaining competition in that particular industry. The current report focuses on the
analysis of the internal and external environment of the financial services sector and the strengths
and competencies of Charles Schwab, one of the leading global companies belonging to the
financial services sector.
Discussion
The financial services market comprises of the revenue of financials or money related services
by entities such as organizations, sole traders and partnerships which engage in financial services
such as lending, investment management, insurance, brokerage, payments and fund transfer
services. As stated by Business Wire (2017) the financial services market is expected to reach
$1.5 trillion by2022, significantly growing at a CAGR of 5% during the forecast period. The
financial services industry is global in nature as it operates in all countries of the world which is
accompanied by global and domestic companies. As stated by Bejenar and Fuior (2015) the level
of competitiveness of the financial services industry is considered to be intense in nature due to
the existence of large number of global and domestic firms operating in the financial services
industry such as Charles Schwab, Fidelity, AXA, Industrial and Commercial Bank of China,
Bank of China etc.
The PESTLE analysis of the financial services industry is as follows:
Political- The main factor which influences the financial service industry is the political stability
of the country in which the companies belonging to the financial service industries are based and
the importance of financial services in the economy of the country. As opined by Financial
Services Monitor Worldwide (2018) the other major political factor which influences the
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STRATEGIC MANAGEMENT
financial service industries is the trade regulations and tariffs which are imposed by the
government of the countries in which the financial service sector companies are based.
Economic-As opined by PR Newswire (2014) the main economic factor which affects the
financial service sector is the type of economic system of the country in which the companies
belonging to the sector operates. The other economic factor which affects the financial service
sector is exchange rate and stability of the host country currency. The other economic factor
which affects the financial services sector is economic growth rate and unemployment rate in the
country in which the companies operates as it determines the purchasing power of the customers.
Socio-cultural- The main socio-cultural factor which impacts the financial services sector is the
demographics and skill level of the population in the countries, the companies are based. The
other socio-cultural factor which influences thefinancial services sector is the attitude and leisure
interests of the population of the countries in which the company is based as it influences their
buying and preference pattern.
Technological-According to Schwanen, Ciuriak and Kronick (2015) the main technological
factor which influences the financial services sector is the rate of technology diffusion in the
country in which the companies are based. The other technological factor which influences the
financial services sector is the impact of technology on the product and service offerings of the
company. The other technological factor which influences the financial services sector is recent
technological developments in the country, in which the company is based.
Environmental- The main environmental factor which influences the financial services sector is
the attitude of the customers of the country in which the companies are based regarding green
and ecological products. The other technological factor which influences the financial services
sector is weather and climate change of the countries in which the companies are based.
Legal-The main legal factor which influences the financial services sector is the anti-trust laws in
credit services industry of the country in which the companies are based. The other legal factor
which influences the financial services sector is the copyrights, patents and intellectual property
law governing the countries in which the companies are based.
Five Forces Analysis of Financial Services Industry
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