Business Model and Environmental Analysis

This assignment delves into the analysis of business models, focusing on their evolution and dynamic nature. It examines the influence of internal and external factors, including macroenvironmental forces, on business strategy and performance. The analysis utilizes frameworks like SWOT and PESTLE to assess the interplay between a company's capabilities and the broader business landscape.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Different types and purpose of organisations with their legal structure..........................1
TASK 2...........................................................................................................................................1
P3 Relationship between functions of various organisation...................................................1
TASK 3............................................................................................................................................3
P4 Positive and negative impact of macro environment........................................................3
P5 Internal and external analysis of organisation to identify strength and weakness............5
P6 Strength and weakness inter related with external factors................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment is an atmosphere where a business entity works and this term
affects operational and non-operational activities in any manner. When a person going to start his
venture then individual need to consider all aspects related to business environment in order to
ensure success (Ahmed, Aamir and Ijaz, 2011). Climate in which an organisation operates its
activities is divided into two parts, one is micro and other is macro. Both of these factors have
vital impact upon business activities whether positive or negative. Company chosen for this
report is NATWAST. It is a commercial bank which is located in United Kingdom and provides
fund to people at feasible interest rates. Major focus of this report is on many kind of
organisations which are private, public and voluntary. Herewith this, internal analysis that
includes study of strengths and weaknesses will also be discussed in this report and other than
this factors of macro environment are also to be analysed in this report further.
TASK 1
P1. Different types and purpose of organisations with their legal structure
Covered in PPT.
TASK 2
P3 Relationship between functions of various organisation
NATWEST is a large size retail and commercial bank which is set up in United
Kingdom. They are providing their support and services across the globe. This bank follows
hierarchical structures in their business and this system is reflected in their actions,
responsibilities, duties, obligations and many more and these are divided into appropriate manner
to staff members of company (Auzair, 2011). Top management has more duties than lower level
management.
There are various aims of NATWEST that are discussed as follow:
 It is necessary for for superior to improve their business operations as it aids them in
growth and development.
 It is must for company that they should produce good quality products and services at
reasonable rate so that each and every individual could buy it.
 It firm is able in improving their profits then they can easily serve better returns to their
stakeholders (Barnett and Salomon, 2012).
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 They have to cater each type of financial instruments to their clients under a roof.
 It is necessary for them to decrease unnecessary wastage so that management can sure
environment in and an efficient manner.
Many forms of functions of organisations are:
It is fundamental for any type of venture is to produce better quality products and
services so that they can cater needs and wants of human being in efficient manner. For this aim
in NATWEST, there are several units and they all have their own purpose which is completely
different from others.
Some functions of enterprise are stated as beneath:
 Sales and marketing
 Finance
 Human resource
 Administration
 Production Research and development
Sales and Marketing: To cater needs and wants of association it is must for an enterprise
that they have full knowledge about customer taste and preferences because all purchases that a
client made depends upon his/her choice. To conduct proper research, effective and better
strategies should be formulated in efficient manner so that all business activities could get done
in most profitable manner (Boons and Lüdeke-Freund, 2013).
Finance: In this context, it is required from employers that they keep all records in
appropriate manner. If they launch their initial public offer then company can easily raise their
fund for association. As result, division is related with other division because to conduct all
operations fund is necessary.
Human Resource Management: Main duty of this functional area is to manage all
employees whom are working in company and get their higher satisfaction and loyalty so that
they should work with full energy and enthusiasm.
Administration: Main function of this department is to provide support to working of
firm. It is essential for firm to manage all activities and operations in adequate manner because
of this action all targets would get attained in certain time span.
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Production: It is essential for association that they could put highly skilled labour in this
so that volume of production could get higher. To enhance level of productivity, management
can use various tools and technologies like innovated technologies and talented staff members.
Research and Development: This method has to be installed in corporation so that
information related to taste and preferences of customer could get by employer so that products
should be manufactured according to need and wants of corporation (Borio, Drehmann and
Tsatsaronis, 2014).
TASK 3
P4 Positive and negative impact of macro environment
External surroundings in which a business entity runs its operational and non-operational
activities, affect straightly to association and these effects are uncontrollable. To overcome losses
and to generate higher amount of profit. It is required from business owner that all factors of
environment should be analysed in proper manner so that negative impact could get minimised.
To state this purpose, management formulates some sort of strategies and policies.
If managers of NATWEST Bank want to recognise these aspects minimise negative
effects then managerial personnel use PESTLE analysis (Bryman and Bell, 2015). This tool is
quite easy in conducting and much helpful in understanding environmental aspects in broader
terms. This technique provokes managers in formation of strategies and policies along with
external thinking, and by taking aid of this methodology, chairman of corporation can easily
recognise all external threats and by analysing environmental study these threats can be removed
from business. Consequently, association would be able in obtaining all objectives in certain
duration. This analysis also increases goodwill of venture in marketplace. If decisions are made
without considering external environment factors then it could hamper working of venture.
PESTEL Analysis is elaborated below:
Political Factors: Banking segment is very powerful because it is liable for adequate
formulation of money in country. Laws and regulations that are made by government affect
business operations of bank in wider manner. For example, tax rates, interest rates etc. All acts
and legislations must be known and fully analysed by business owner. If government reduces tax
rates then it will increases profit rate of firm and on the other hand if some additional tax policies
has launched by Govt. then it will impact business operations in negative manner.
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 Positive Impact: The policies which are formed by governing entity is involved. Hence
new introduced activities of state can affect business of company effectively.
 Negative impact: Brexit has led to increased rates that can lead to more service and
product cost. This can ruin relations with public as well as government.
Economical Factors: This is a widest factor that affects business of banking industry
because both are interconnected. Purchasing potential of a human being is affected by per capita
income and development of country depends upon gross domestic product of nation (Chang,
Hughes and Hotho, 2011). Though, if activities of bank are profitable then recession never
impacts operations of NATWEST bank in negative manner. If economic condition of country is
stable then demand of financial products will increase and if per capita income is low of
individuals then populations is not able in buying banking items and facilities. Positive Impact: Any changes or increase in inflation's funds flow can lead to more
financial benefits to organisation. Negative impact: Since business environment is dynamic, this can lead to complex
situation in case of economical instability of organisation.
Social Factor: This point includes beliefs culture, tradition, lifestyle, way of living etc.
and these aspects influences working pattern of corporation in direct and indirect manner.
Fundamentally, a human being can take advice regarding loan from other persons and can get
better assistance regarding loan. If people understands their safety features than they will
purchase financial products like fixed deposits. On the other side of coin, it is clear that if people
are not very educated then they are not able in understanding need of financial products. Positive Impact: Through this, company can meet the level of interaction as well as
communication that can lead to effective recognition of organisation. Negative impact: As company has been adopting destructive innovation approaches for
modifying their services and products, this can lead to social resistance among society.
Technological Factors: As time passes, latest and new innovations get developed in
technologies and people use these tools in their business operations. Brand new innovation is that
there are several machines are installed in which a person can self deposit his money and then
individual receives confirmation that money is successfully deposited (Chavis, Klapper and
Love, 2011). If innovations are launched on short term basis them firm is not capable in
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implementing on them as per their arrival. A prominent technology makes smoother business
activities and also add additional value into them. Positive Impact: These elements can affect business activities of sited company through
accomplishing the business objectives in efficient and effective manner. Negative impact: Technology is more expensive for which company has to invest large
financial values in it. But after the modification of new technologies, it would be useless.
Environmental Factors: Use of technologies become people environment friendly and
reduces air pollution as people do not want to visit bank branch frequently as they have all info
in their phone related to their account. Concern about environment develops good image of
corporation otherwise firm became less respective in the eyes of clients. Positive Impact: This can help in reducing red-tapism and carry out work activities in
more effective manner. Negative impact: Company has to decline more document and paper work by which
decline in work can get done.
Legal Factors: All laws and legislations should be followed otherwise this act could send
business owner in prison along with many fines. If legal formalities are smoother than it is
beneficial for organisation and if it is not like than conducting operational activities will become
tougher for association. Positive Impact: This can lead to safe activities zone help in meeting consumer demands.
 Negative Impact: These legislations can lead to disrespecting their own policies and
management.
P5 Internal and external analysis of organisation to identify strength and weakness
Business environment is divided into two parts internal and external. As, extrinsic
atmosphere consist PESTEL analysis then intrinsic study acquires SWOT matrix in order to find
out strengths and weaknesses of corporation along with grabbing all opportunities and
eliminating all possible threats. To analyse all aspects in most efficient manner then TOWS
matrix should be install in working pattern of venture. Internal environmental includes
employees, employers, mission, vision, management and many more. On the other hand, external
involves stakeholders, shareholders, suppliers, customers, competitors, government etc. In
addition to this, NATWEST is a royal bank of Scotland group, which is one out of all largest
banks in United Kingdom.
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SWOT ANALYSIS METRIX
Strengths Weaknesses
 Venture is having successful track
record of evolving new and improved
services.
 Regarding to brand portfolio, over the
years this association has put their fund
in developing strong brand portfolio.
 NATWEST is a successful business
venture which is good in
implementation of banking services for
clients. This action is good in
generating results and revenues streams
in their business operations (Crane and
Matten, 2016).
 This bank is having talented labour
because NATWEST invests its funds in
training and development program of
employees. This program helps
employees in enhancing their skill and
specialisations.
 This venture is not able in facing
challenges that are present in
marketplace by new entrants in the
same segment and along with this
venture also lost their small market
share.
 Bank has necessities of putting fund in
implementing innovative techniques in
their business operations so that all
work could get completed with
maximum efficiency and customer
should get high quality services.
 Employees financial planning should
be done in effective manner by
considering all asset and liquidity ratio
(Chesbrough, Vanhaverbeke and West,
2014).
 Controversies that are related with
internal audits of RBS is a major
weakness that sabotage image of
corporation among customers.
Opportunities Threats
 According to need of clients company
can launch novel services which should
provide additional benefits and this
action is able in developing business
expansion opportunities for firm.
 Lower inflation rate will make lesser
 Competitors are more eligible in
accepting and inventing new
technologies and their this kind of
behaviour is reducing overall market
share of association in industry.
 There are some law issues that
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interest rates and more people would be
able in buying loans.
 Novel innovations in technologies
helps in working operations and are
bale in providing better services to
clients. This action helps in gaining
consumer loyalty and trust towards
company. This action then further
develop stronger customer base by
providing higher quality services.
decrements trustworthy situation of
organisation in front of clients (Demil
and Lecocq, 2010).
 In banking industry, business rivals are
increasing very rapidly and association
is not quite eligible in competing with
them.
P6 Strength and weakness inter related with external factors
Both SWOT and PESTEL analysis are main part of organisation. It aid in analysing small
and large scale business of environment. They are playing a main role for meeting targets and
goals of enterprise within a span of time. Intrinsic and extrinsic environment are inter linked with
one another (Dong, Wu and Hou, 2009). If company are facing any specific changes which affect
organisation operations divisions due to deep thoughts along with a difficult nature. Mainly,
these both terms are interrelated with one other. SWOT perspective include various parts which
impact company from inside. On another side, PESTEL include standards and controls or typical
segments from outside are authorized by governments.
There are different target identified through PESTEL and SWOT which are explained in
detail below:
 Updating present as well as upcoming obstacles or issues that are existing within the
corporation.
 Within a organisation, Some issues are needed to discuss all internal issues of suppliers,
customers, agents etc. On another side, external factors have to consider each and every
gauges and feelings that are fixed by governments for making a free space from isolation.
 Things which are expenses are mainly affect in a context of advance elements.
 Company is more friendly in solving additional issues as well as covered problems.
 Effective utilization of resources are fundamental for assembling creative things.
 Social affairs of same data as well as information by driving issues of research and
investigations.
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 Effective process for supporting issues or threats.
 Survey cost of future (Edquist, 2010).
All the above concentrate show a effective relations along with external and internal
conditions in this part as well as friendly while accomplishing affiliations. It has been considered
that these two analysis are essential base on running considerable undertaking. Above it is
examined that both analysis SWOT and PESTEL are inter related with each other in different
manner which impact affiliation is accomplished in a lighting way. These mechanical assemblies
are very helpful in the process of company along with it is also based on the system of leadership
(Grimpe and Kaiser, 2010).
With that SWOT and PESTEL help in gathering more data and information at a time of
analysing. It is helpful in applying a model of convincing for satisfying demands and needs of
consumers. Therefore, NATWEST is using these model for again learning establishment in taste
as well as slants of customer or normal society by managing a examination process.
CONCLUSION
According to above report, it is concluded that it is important for every kind of company
to identify its environment in a effective way. Through its result they can easily manage
alternatives. Hence, it will aid them in improving their profits as well as reputation a
marketplace. In this report, describe about different kinds of companies such as voluntary, public
and private. In enterprise, there are having various departments like as finance, marketing,
human resources and many others. If organisation have to develop or expand their business
which is important for them to build new items as well as services for their customers.
Companies manger which aid in analysing of SWOT and PESTEL to comprehensive its intrinsic
as well as extrinsic surroundings. Therefore, it will help in completing their rivals at commercial
centre along with that it also help in raising goodwill at a marketplace.
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REFERENCES
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Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
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Dong, M., Wu, C. and Hou, F., 2009. Shortest path based simulated annealing algorithm for
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Helms, M. M. and Nixon, J., 2010. Exploring SWOT analysis–where are we now? A review of
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Hoang, H. A. and Rothaermel, F. T., 2010. Leveraging internal and external experience:
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Jung, H. S., Kim, Y. and An, J. A., 2011. Effects of the Internal and External Factors of Small
and Mediumsized Corporations on Green Management Performances through the
Establishment and Utilization of Information Systems and Building Relationships for
Information and Knowledge.
Online:
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