Analyzing Economic and Global Business Environment for Virgin Money in the UK

This report analyzes the economic and global business environment for Virgin Money in the UK. It examines the impact of political, economic, social, technological, environmental, and legal factors on the company's operations. The report also uses the business life-cycle model and PESTLE analysis to analyze the company's operations.

Contemporary Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Analyze the economic environment within which businesses operate in the United Kingdom. 1
Analyze the global business environment and its effect on nation with an importance on the
United Kingdom. ........................................................................................................................3
CONCLUSION................................................................................................................................5
References:.......................................................................................................................................5

INTRODUCTION
Global business environment can be explained as the surroundings in various sovereign
nations, with components that impacts the business operations negatively and positively both. It
gets resources from the surroundings and providers its goods and services to the surroundings.
There are various level of environmental forces, these forces may be link with the national level,
regional level, or global level (Tabachnikova and Vinokurova, 2019). These forces provides
opportunity or threats to the company or its acts. All business functions practices to catch the
accessible possibility and face the issues that emerge business they just react. They modify their
internal business surroundings to live as well as to get success for an industry. This report is
based on virgin money, it is a financial services brand utilised by two independent brand
licensees globally from the virgin group. Its headquarter is in UK was founded in 1995 by
Richard Branson. The report will examine an economic environment with in which business
operate in UK. Further , report will justify the global business and its impact on nations with an
emphasis on the UK. This report will use some models and theories in order to analyse the
company operations.
MAIN BODY
Analyze the economic environment within which businesses operate in the United Kingdom.
Economic factors that impacts business as it is linked to business and influence the drive
of business just as labour and cost are always controversial economic factors that impacts the
economy. Various nations have started outsourcing operations from other nations. It includes
some factors that are listed in below points. UK has a strong rules of law, firmness and
incomplete in the working of its legal system, along with that world conflict declaration,
judgement and intervention services. This states that business from the world trust the UK legal
common laws is the most famous for cross border dealings, as it creates country competitive and
attractive place to perform business there.
 Vision, mission and objectives – It has aims of giving users the services which goes
beyond traditional banking system. Offering integer enabled services that will create
regular life of the people easy and hustle free by being honest and developed financial
institution. In order to manage the brand value and be the market disruptor. In the further
aims to serve advance and extra tax return.
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 Organisational structure – the business adapts the decentralization system, where
liability are allotted by top level management to middle level to lower level.
 Corporate culture – It is leading completely digitalized bank, serving the best services
and goods for retail as well as business requirements.
 Human resource – company cough to workers the best groups so that can be inventory
to the company and serve the best of them to the users. They commit to have the people
with years of learnings and wide education in financial sector.
 Resources and technological ability – The company is operating on making specific
value by utilising business activity, with the utilisation of cloud automation, data system
and artefacts and other business analytics tools. Virgin money specify some external
factors that impacts the activity operation and functions of the business are interest rate,
inflation and bank size.
 Inflation -Banks has good impact on inflation, intrest rate raised and reduced in huge
value. UK has a cost inflation regarding 23 %. growing values have indirect connection
with revenue (Thrassou and et., al., 2020.).
 Recession – It is period in economic cycle where interest rate breaks down because of
which financial institution suffers with reduced revenue. Two attainable spans
presenting a reducing GDP is the duration of recession which gives a lot of stress on
economy banking industry. The loan requirements diminished and household seeks
security from the present condition. Another components of virgin money are situation
of the bank, that justify goals, trade union, solvency, technology utilised, quality of team
members, honest customers, brand value and many others (Santoro and et., al., 2019.).
Some factors where bank operates in these kinds of environment
 Competitor banks – The economic surroundings is completed with same services
offering business which done through bank at every level. Threats in the structure of
strong brands just as HSBC is really challenging to deal with. Financial tools, money
market tools and another banking services are complex to assort due to regulations and
rules permits much innovation hence, the company has a tough rivalry among the banks.
UK has a lowest competition due to its restriction and strong entrant strategy. Less
competition is advantageous for the bank as there is no value competition and concern
earn huge income.
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 Banking regulations - Financial institutions are major contributor in an economy there
is requirements to be regulate and manage it at high level. There is regular modification
in the interest rate, repo rate and another regulatory rules. Virgin money has to
implement all the regulations and then operates in any market. New goods and services
can be introduced keeping in mind all the legal structure and governments regulations.
The legislations that operates in UK is financial services and market act 2000. their
various regulations that required to be followed capital needs directive, European market
infrastructure (Tseng, M.L., and et., al., 2021).
Business life-cycle model -
The business life cycle model refers to the various levels that a business model goes
through from inception to en points. It consist some points that are explained in below points.
 Start up – It is an initial stage of model,it is essential to research the market and
competitive picture to write a business plan and secure funding. It includes some steps
that are as, research the market and rivalry conditions and determine what company is
offering.
 Growth – while at growth stage a company starts making money and more money,
breaking even becoming accountable or increasing accountability (Naguit, Cristina, and
Yutuc, 2020).
 Maturity – Developed business must have strong brand recognition and a safe or raising
customer base that permits them to expand product lines into new or existing markets.
 Transition - this stage represents a duration where a company should deal with
changes. The conversion might be positive or negative, and it can be because of many
elements, considering reducing sales, changing market conditions which are effecting the
business.
 Succession – it is the final stage of model is when an individual decides to close, sell and
bring in substitute to take over an establishment. This includes evaluation the value of
business on the basis of its assets and sales (Turulja and Bajgoric, 2018.).
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Analyze the global business environment and its effect on nation with an importance on the
United Kingdom.
A pestle analysis is the framework that influence an industry. It can be utilized in a range
of various situations and can advice people expertise and senior management in strategic
decision making. Its main purpose is to conduct a full situational analysis. This must be repeated
constantly to determine any modifications in the micro environment. Business that successfully
manages and respond to alter in the macro environment can differentiated from the competition
and thus have a competitive benefits over others. More explained in below points by
considering Virgin money, with importance in UK (Wikhamn, Armbrecht and Wikhamn,
2018)..
 Political factor - This factor determines the extent which government and government
policies might effect on an industry. It majorly include the political policy and stability as
well as trade fiscal and taxation policies too. Virgin money, is the company which
operates in various country and market. As UK has a political stability, therefore, virgin
money can make strategies on the basis of stable political environment. The regulatory
practices are efficient with global norms which have assisted the nation to develop its
ease of performing business ranking. The company should also focus on the trade policies
of the UK which can attract on the supply chain of the company (Doğru, 2019).
 Economic factor - An economic factors has a direct effect on the economy and its
performance, which in turn directly effect on the business and its accountability.
Elements that are considered are interest rate, occupation or unemployment rates, raw
material costs and foreign exchange rates. Because of pandemic, the economy of the
country has reduced. Virgin money, provides services in global country. So they should
also focus on the Foreign exchange rates which contributes the company profits.
Company has a benefits of stable economy as it provides ample lucrative business
opportunity, increasing available incomes among the target customers.
 Social factor - The concentration on social surrounding and determining rising trends.
This assist a marketer to further analyses consumer requirements and desires in a social
setting. Components considers changing family demographics, educational level, cultural
modification and alteration in lifestyles. Modification in demographic manners can
cause a huge impact on business operations like virgin money for selecting a correct
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segment of market with high growth prospective. It is essential for them to analyses
people attitude towards movement as it can influence company capability to bring
international managers to host nation.
 Technological factor - This component considers the ratio of technological creativity
and improvement that can impact a market or business. Elements can include changes in
smart and android technology, automation, research and development. Here is often a
leaning to concentrate on development only in digital technology. Virgin money can
invest in an opportunity served by social media marketing to develop business activity.
Technological trends can be utilized to start the innovative social media campaign for
developing online brand communities.
 Environmental factor - these are the factors that are influenced of the surroundings and
the effect of ecological factors. With the growth of significance of corporate social
responsibility and sustainability, this factors is becoming more central to how business
require to run their business. This includes climate, recycling process, carbon footprints
and many others. Moreover, implementing efficient waste management practices in
business units that are located in or near urban areas is hugely important for virgin
money. Several company have placed strict norms to save their urban areas through
effective waste management.
 Legal factor - An industry should understand that what is legal and permitted within the
region they work in. they also should be aware of any changes in legislation and the
effect this might have on business activity. Components consider employment laws,
consumer laws, health and safety, international as well as trade regulations and
limitations. Virgin money strictly adopt an Employee, labor health and safety laws as
some nations have strict rules to ensure labor safety. Giving a secure working
surrounding for employees is the ethical and moral obligation of company (Andonova,
Faul and Piselli, eds., 2022).
CONCLUSION
It is concluded that global business environment is the term which states the industry
operations on the basis of self dominant state that develop outside to the local surroundings of
an organizational that effects the decision making ability just an organizational and resources
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uses enclosure. This includes rivalry, political power, statute law, economical factors and
consumers trends globally. it is the core of an operations of business organization. The elements
of the global surroundings effects business in their regular transactions, but they are basically
beyond the management, plus they continuously change. Businesses that align with global
surroundings components needs to attain raised operations, elevated morale to their workers and
finally a higher profit margin for an individuals and their businesses.
References:
Books and Journals
Andonova, L.B., Faul, M.V. and Piselli, D. eds., 2022. Partnerships for Sustainability in
Contemporary Global Governance: Pathways to Effectiveness. Taylor & Francis.
Doğru, Ç., 2019. Meta-Analysis of antecedents and consequences of empowering employees as a
contemporary management approach. In Handbook of Research on Contemporary
Approaches in Management and Organizational Strategy (pp. 1-17). IGI Global.
Naguit, M., Cristina, G. and Yutuc, R.G., 2020. Feng Shui and Business: How Past Traditions
Influence Contemporary Businesses. International Journal of Religion & Spirituality in
Society, 10(4).
Santoro, G., and et., al., 2019. Do knowledge management and dynamic capabilities affect
ambidextrous entrepreneurial intensity and firms’ performance?. IEEE Transactions on
Engineering Management, 68(2), pp.378-386.
Tabachnikova, O. and Vinokurova, N., 2019. Youth and Women Entrepreneurship in
Contemporary Russia: Tendencies, Challenges and Prospects. In Conference
Proceedings Chapters (pp. 60-79). Bulgarian Association for Management
Development and Entrepreneurship.
Thrassou, A., and et., al., 2020. Editorial Introduction: The Changing Opportunities and
Challenges of SMEs in Contemporary Business. The Changing Role of SMEs in Global
Business, pp.1-13.
Tseng, M.L., and et., al., 2021. Sustainable industrial and operation engineering trends and
challenges Toward Industry 4.0: A data driven analysis. Journal of Industrial and
Production Engineering, 38(8), pp.581-598.
Turulja, L. and Bajgoric, N., 2018. Innovation, firms’ performance and environmental
turbulence: is there a moderator or mediator?. European Journal of Innovation
Management.
Wikhamn, W., Armbrecht, J. and Wikhamn, B.R., 2018. Innovation in Swedish hotels.
International Journal of Contemporary Hospitality Management.
Yerpude, S. and Rautela, S., 2021. Digitally driven new product development: an involved
contemporary innovation case. International Journal of Productivity and Performance
Management.
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