Strategic Analysis of Barclays Bank Using PESTEL Model

The assignment provides a comprehensive analysis of Barclays Bank using the PESTEL model. It covers the bank's internal strengths and weaknesses, as well as external factors such as political, economic, social, technological, environmental, and legal considerations. The document also explores the bank's competitiveness in the UK and Bangladesh markets, providing insights into its market position and potential for growth.

PESTEL Analysis

Table of Contents
1.Importance of PESTLE Analysis and its significance for organisation..............................3
2.List of the PESTEL factors..................................................................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
.........................................................................................................................................................8

INTRODUCTION
PESTLE Analysis is usually utilise for assessing the business macro environment as well
as is done before SWOT analysis. So, as part of developing process or establishing a business
into market this is essential for Barclays to perform the PESTLE analysis. In this report some of
its importance, impacts and lists are mentioned in this report.
1.Importance of PESTLE Analysis and its significance for organisation
PESTEL Analysis is considered as a techniques which is applied by the marketers in
order to analysis as well as monitor the external environment factors of marketing which has an
impact upon firm (Florin, 2014). Also, it can develop opportunities and threats both for the
business. So, the main purpose of performing this is to:
 Identify the recent external factors effecting a business
 Find out the outsiders factors which may modify in future
 Exploit opportunities or prevention against threats better than rivals.
Importance of PESTEL Analysis:
This analysis plays a vital role in the business growth. Either it is in product line
expansion or initiating a new business in another location, this is a key in formulating strategies
as well as planning. Therefore, some of its significance on Barclays Plc are mentioned below:
 This Assists Barclays Plc in finding essential changes into political, economic, social,
technological, environmental and legal factors. As economic factor consists all essential
trends related to economy like wise political factors involves political stability etc. this
aids Barclays in accomplishing their goals.
 Aids respective firm in performing strategic planning in order to expand its business.
 Alertness Development: PESTLE analysis assists Barclays Plc to prepared for future
threats which arise timely due to external factors.
 Exploit Opportunities: PESTLE analysis aids in exploiting opportunities which raise
from external factors as lower interest rates is an opportunities for Barclays PLC as this
enhances their services demand.
 Deeper Understanding: PESTLE analysis helps Barclays plc to easily understand all
external factors which effects business environment. At the time of developing new
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products, this enhances strategical thinking, deeper understanding of many factors such
as technological trends, laws and so on.
2.List of the PESTEL factors
PESTEL Analysis is useful for examining the surrounding where firm operates as well as
accessing external factors that influence the organisation in the market they operates (Grünig and
Kühn, 2015). Some of PESTLE factors of Barclays Plc are listed below:
(Source: PESTEL Analysis. 2019)
PESTEL FACTORS
Political Factors Economical Factors
 Political stability in existing market.
 Regulatory practices
 Importance of local government
 System of government
 Armed disputes
 Change of government
 Inflation rate
 Performance of economy
 Descending pressure on customers
expenditure
 Enhancing trade policy liberalisation
 Economic Cycles
Social Factors Technological Factors
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 Leisure interests
 Media Outlets
 Migration
 Roles of Gender
 Access to necessary services
 Levels of education
 Research and development
 Supply chain partners empowerment
 Protection of patent as well as rights of
intellectual property
 Mobile technology developments and
Dissemination
 Supply chain partners empowerment
Environmental Factors Legal Factors
 Consumer activism
 Norms of environmental
 Renewable technology
 Attitudes towards as well as support for
renewable energy.
 Laws of business
 Norms of healthy and safety
 Legal protection
 Data protection regulation
 Laws of environmental
Political factors:
It is the factors which effects the environment of business as well as trade market. It
includes political stability, trade regulations, employment laws, tax guidelines and so on. This
factors plays a crucial role in ascertaining the aspects which impact the long term profit of
Barclays Plc in particular market. Respecting firm is operating into Foreign money centre banks
in various countries as well as expose itself to many kinds of political system and environment
risks. For example: In during 2008, banking system shore up confidence, as authority of financial
service enhanced the requirements of capital ratio for whole UK banks. Barclays Plc had been
forced to rise £7.2 billion from the investors of middle eastern (Practical example of PESTEL.
2017).
Positive and negative impact:
 If any kinds of favourable variation occurs in tax guidelines this help the to increase their
profitability and also helpful to expand its services in many countries. Such As Financial
services maximised the capital ratio requirements this raise the confidence of all banks.
 If any types of political environment or factors is not in favour of bank then it impact
negatively. Such as 2016 was a challenging year for Barclays, as new capital rules are
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initiate from the government of UK and 8% surcharge introduced on the profits of bank.
This is a threats for Barclays as it is more taxing if banks have an overseas subsidiary.
Economic Factors:
This factors involves the exchange rate, economic cycle, interest rate and so on. Barclays
Plc can utilise nation's economic factor like growth rate, customers expenditure etc in order to
predict the growth mechanical phenomenon of not only sectors but also that of firm (Sammut‐
Bonnici and Galea, 2015). For example: In year 1992, Barclays Plc lost their market share
speedily and also in 2008 it profitability decreased by 14% (Practical example of PESTEL.
2017). As BREXIT while UK exits from Europe a important challenges for various banks. For
Barclays, Brexit does come with accomplish able negative consequences for capital, transaction
and standards, along with the impact for its worker, customer and so on.
GDP growth rate of UK (November 2018 to January 2019) fourth quarter is
Months GDP
November, 2018 0.20%
December, 2018 -0.40%
January, 2019 0.50% (GDP. 2019)
As GDP increases in Barclays maximised the investment and consumption. Investment
bank like Barclays assists companies who are seeking for finance. If investment enhanced it
impact them positively. Due to this financial connectivity also get increased which aids them to
expand their businesses successfully and develop positive path ways in order to get a sustainable
future. As channels of capital market is equivalent of 6% of growth domestic product in
investment into United Kingdom economy (Barclays investment bank).
Raising inflation are impacted the British SMEs for 2018. As per the Barclays Business
Banking, SMEs believe that this negatively effects its growth in 2018. Also, demand of the
customers are considered as a positive impact. Therefore, according to Barclays annual SMEs
Hopes and fears Index, this ask decision takers at UK SMEs which factors it expects to assists or
hinder its growth of business during year 2018, inflation is fear by 43%. as this enhanced the
enterprise costs, price rises mare quicker than wages that put pressure upon customers. Also in
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year 2017, Barclays introduced Digisafe in order to rise awareness of scams, frauds and
cyberattacks (Barclays. 2019).
Exchange rates are also considered as a market risk for Barclays. Changes in foreign
currency exchange rates impact Sterling equivalent value of items. As a outcomes, Barclays
capital ratios are delicate to the movement of foreign currency. Fail to manage their balance
sheet effectively and also impact adversely on leverage ratios and regulatory capital. Also
exchange rate impact the profit of Barclays if it engages in global trade. As currency stability is
essential as instability discourage the international investors.
Positive and negative impact:
 If Unemployment rate decreases in UK then this will be a positive impact for Barclays as
more number of customers wants to available various services of banks that assists them
to earn profit and accomplish the yearly targets.
 Economic factors is not in favour then it will impact negatively as BREXIT while UK
exits from Europe a important challenges for various banks. For Barclays, Brexit does
come with accomplish able negative consequences for capital, transaction and standards,
along with the impact for its worker, customer and so on.
Social Factors:
This is the culture or manner of performing things which effects the culture of the
company within environment. It presents the demographic characteristics, norms, population
values, that effects operation of firm (Grünig and Morschett, 2017). Shared knowledge and
feeling of population plays a significant role of Barclays Plc marketers to know about the
consumers of provided market and also creating a marketing message for International money
centre banks industry consumers. For example: In year 2000, Barclays Plc shut down approx
160 branches or more than that in rural areas (Practical example of PESTEL. 2017). It led them
to undergo through a bad publicity series. For respective firm and another banks, like shifting
towards monetary fund, finance and wealth management as a standard service in order to meet
requirements of pension age clients alongside credit and consumption services which has been
growth drivers (PwC 2016).
Positive and negative impact:
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 Social change may positively impact the banking sector as ageing population comes with
the commercial enterprise opportunities for Barclays. Pension age customers has more
income as well as higher expendable incomes.
Technological Factors:
These are the the factors that effects the operation of technology industry as well as
market favourably or unfavourably. Now a days technology have made life of consumers simple
in banking and developed issues related to the account details privacy (Moutinho and Phillips,
2018). Various clients face problems regarding net banking, Log in and so on. Individuals living
in country generally are not have more knowledge about bill payments, online funds transfer and
many more. For example: In year 2010, Barclays Plc was suspect of not being capable to assists
their clients to access its accounts to check balance as well as transfer funds (Practical example
of PESTEL. 2017).
Positive and negative impact:
 As this factors are changing then it creates a positive impact as it aids Barclays continues
to create new technology as well as expend in digital and mobile ability to better and
distinguish their offers, while remaining perpetually alert to and investing in fraud
hindrance, cyber risk, Information Technology security also suitable data management.
 This factors also impact negatively as more chances of hacking information has been
increased. Also digital interruption continues to represent upcoming challenges.
Legal Factors:
These factors are has few similarity with political factors. But it include more particular
laws such as consumer protection laws, discrimination laws, safety laws and so on (Lli
Torradabella and Saiz Alvarez, 2015). Banks are controlled through many laws as well as
agencies in different nation. Single banking license executed in Europe have permit banks in EU
to open branches without any interruption so that they can join the British Treasury for restoring
the economy, government of UK put pressure upon Barclays Plc in year 2009 (Practical example
of PESTEL. 2017). Therefore, court had prohibited the Guardian to publish paper which would
demonstrate that Barclays Plc set up many firms in order to obviate taxes.
Positive and negative impact:
 If Barclays are following the all laws and regulation this will impact positively as it
develops their values among consumers as well as gain more profitability.
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 If any kinds of illegal activities or operation are not going on according to all laws then
this will effects Barclays negatively. Such as in year 2012, Financial Conduct Authority
had also upraised up to $1billion in legal proceeding against Barclays as well as a
whistle-blowing claim. This also tarnish their reputation (Legal and environmental
factors. 2019).
Environmental factor:
Various market has different standards and norms of environment that can effects the
firm profit in those market. It includes offsets of environment, whether, climate and so on. Even
in nation often states can has many environmental as well as liability laws (Nurmiand Niemelä,
2018). Various European countries provide healthy tax breaks to firm which operate into
renewable sectors. Barclays Plc remains committed to enhance their efficiency of energy and
minimising their carbon footprint on an continuous basis as well as assisting its chain of supply
to decrease their emissions. For example: During year 2007, respective firm invested into release
trading ability and moved in customer market with low carbon products (Legal and
environmental factors. 2019). During year 2015, Citizenship Plan, Barclays committed to
decrease their own carbon foot print by minimising the consumption of energy through
sustainable development financing as well as carbon-offsetting openings (Annual Report 2017)
Positive and negative impact:
 If firm is offering some eco friendly services that do not harm environment and comply
all laws regarding various countries environment then it will be effects positively as this
aids them to expand their business in other nation easily without any interruption.
 It also impact Barclays negatively as carbon tax are applied to whole business as per their
carbon foot print. As more carbon foot print are used by company then tax is also high
which impact their funds and profitability.
CONCLUSION
From the above report it has been concluded that PESTEL Analysis is essential for
Barclays Plc. As through this they can analysis the external environmental factors. After
evaluation some of its importance are identified that are exploiting opportunities, finding
essential changes in various factors and so on. All the factors are listed and relevant practical
examples are explained. Some of the opportunities as well as threats of all PESTEL factors upon
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Barclays. Such as 8% government surcharge on the profitability of UK bank, expanding business
in digital banking and so on.
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REFERENCES
Books and Journals
Florin, N., 2014. A Study of Banks’ Competitiveness in United Kingdom and Bangladesh Using
PESTEL Model. Journal of Applied Management and Investments. 3(2). pp.74-82.
Grünig, R. and Kühn, R., 2015. Global Environmental Analysis. In The Strategy Planning
Process (pp. 89-96). Springer, Berlin, Heidelberg.
Grünig, R. and Morschett, D., 2017. Determining the Target Markets. In Developing
International Strategies (pp. 85-104). Springer, Berlin, Heidelberg.
Lli Torradabella, C. and Saiz Alvarez, J. M., 2015. Emprendimiento y análisis PESTEL de un
offshoring de servicios: una valoración práctica [Entrepreneurship and Pestel Analysis
of a Services Offshoring. Practical Assessment] (No. 88467). University Library of
Munich, Germany.
Moutinho, L. and Phillips, P., 2018. Strategic analysis. In Contemporary Issues in Strategic
Management (pp. 46-79). Routledge.
Nurmi, J. and Niemelä, M. S., 2018, November. PESTEL Analysis of Hacktivism Campaign
Motivations. In Nordic Conference on Secure IT Systems (pp. 323-335). Springer,
Cham.
Sammut‐Bonnici, T. and Galea, D., 2015. PEST analysis. Wiley Encyclopedia of management,
pp.1-1.
Segura, E., Morales, R. and Somolinos, J. A., 2018. A strategic analysis of tidal current energy
conversion systems in the European Union. Applied energy. 212. pp.527-551.
Online
Practical example of PESTEL. 2017. [Online] Available through
<http://marketingdawn.com/pestle-analysis-of-barclays-bank/>
PESTEL Analysis. 2019. [Online] Available Through
<https://research-methodology.net/theory/strategy/7137-2/>
Legal and environmental factors. 2019. [Online] Available through
<https://studymoose.com/environmental-analysis-of-barclays-bank-essay>
Annual report. 2017. [Online] Available through
<https://home.barclays/investor-relations/reports-and-events/annual-reports/2017/>
GDP. 2019. [Online] Available through
<https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/
gdpmonthlyestimateuk/january2019>
Barclays investment bank. 2019. [Online] Available through
https://www.investmentbank.barclays.com/igniting-growth-in-the-uk/supporting-uk-
economic-growth.html
Barclays. 2019. [Online] Available through
<https://newsroom.barclays.com/r/3561/rising_inflation_and_cybercrime_are_the_bigg
est_sme_fears>
PwC (2016) “Retail Banking 2020 report: Evolution or revolution?” [Online] Available through
<https://www.pwc.com/gx/en/banking-capital-markets/banking-2020/assets/pwc-retail-
banking-2020-evolution-or-revolution.pdf>
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