Business Environment Analysis: Barclays Bank Plc - Report Overview

This report provides a detailed analysis of the business environment of Barclays Bank Plc, a major global financial services provider. The report begins with an evaluation of Barclays' management structure and governance, highlighting its hierarchical organizational structure and key personnel. It then assesses the external environmental influences on Barclays using a PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors that impact the bank's operations and strategic decisions. The analysis covers political stability, economic conditions, social trends, technological advancements, and legal regulations, illustrating how these factors affect Barclays' profitability, stakeholder relations, and overall business strategy. The report emphasizes the importance of understanding these environmental influences for effective decision-making and sustainable growth within the competitive financial services industry. The report concludes by summarizing the key findings and their implications for Barclays Bank's future.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
1. Evaluation of the Management structure and Governance of Barclays Bank Plc..................1
2. Assessing and evaluating the effects of external environmental influences on Barclays Plc. 3
Conclusion.......................................................................................................................................8
references.......................................................................................................................................10

INTRODUCTION
Business environment refers to the integral part of the organisation's effective and
efficient management. It is determined as the surroundings with the internal and external factors
that can affect the industry including; stakeholders, employees, consumers, government,
legislations, supply and demand, etc. The study aims to identify the business environment of
Barclays Bank Plc that is one of the major global financial service provider that engaged in
commercial and retail banking, investment banking, credit cards, etc. In this study the
organisational structure and the impacts are described. Lastly it will give an understanding of the
various business environment and the impact of the environment on the business operations and
decisions.
TASK
1. Evaluation of the Management structure and Governance of Barclays Bank Plc
Barclays Bank Plc
Barclays is one of the leading British multinational investment bank and financial
services company (Barclays Plc, 2019). The organisation was found in 1690 by James Barclay. It
operates in more than 50 countries including; Japan, US, India, Europe and many African
countries. The organisation mainly operates in diverse set of customers and wholesale businesses
that involve;
 Wealth Management
 Personal Banking
 Investment Management
 Corporate Banking
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Illustration 1: Barclays Plc
(Source: )

Barclay operates under two businesses; Barclay UK and Barclay International with around 4,750
branches. As of 2019, the company employs approximately 140,000 people internationally.
The history of Barclays Bank can be traced back to 1690 when Thomas Gould and John
Freame began trading in Lombard street, London with the name of Glodsmith bankers. The name
of Barclays became associated with the business in 1736 when the son-in-law of Freame, James
Barclay became the partner of the organisation (Calabrese and et. al., 2018). According to a
report published in 2011, Barclays was the most powerful transnational corporation in term of
ownership.
Mission and vision statement of Barclays
 The vision of Barclays Plc is to achieve a good growth through time by diversifying its
business base and increasing its presence in the markets.
 The mission statement of the Barclay “Barclay is a global financial service provider and
with a vast, international reach, Barclay offers innovative products and services to meet
the need of its diverse base of clients.
Governance of Barclays
The Barclay Bank is governed by Board of Director. Board of the company is responsible
for overall leadership of the group that includes; establishment of the purpose, values and
strategy and satisfying itself as to the culture and strategy. The bank is of Hierarchical
organisational structure that follows the layout of pyramid which starts from top level
management to the bottom level employees (Hamilton and Webster, 2018).
The board of the company;
 Timothy Throsby is CEO, president and Executive Director of the company.
 The group chairman of the Barclays plc is John McFarlane that were appointed from 1st
January 2015.
 Jes Staley is the Group Chief executive, appointed on 1st December 2015.
 Tushar Morzaria is the group finance director of Barclays bank, appointed on 15th
October 2013.
 There are total 10 members in the group as Non-Executive Director
 Chairman of Barclays Bank UK PLC is Sir Ian Cheshire that was appointed on 3rd April
2017.
Barclays Plc Revenue
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In 2018, the total revenue of the company has been mentioned by £21.136 billion. The
net income in 2018 was £2.372 Billion. It is primary listing on the London stock exchange and is
a constituent of the FTSE 100 Index (Ibrahim and Primiana, 2015). The chief executed said the
financial figures reflected continuous investments, sustainable strategic focus and outstanding
brand momentum during the year. The organisation said they put many efforts to integrate its
physical and digital presence that had helped to drive sales and in future they wanted to increase
revenues by 10% from current revenue.
Stakeholders of Barclays
The board of the company is responsible to create and deliver sustainable shareholder
value through setting effective strategy and overseeing its implementation. The major
stakeholder of the company are; consumers, employees, shareholders, government, etc. that are
directly affects by the decisions of BOD of Barclays Bank PLC. The BOD wether they are
executive or non-executive members, maintains transparent and loyal relation with their
stakeholders (Teece, 2018). They provide an effective service to their customers 24*7 through
their physical stores as well as online banking facilities. Employees are given a good salary
amount with the keeping in the mind that they can fulfil their basic need. Employees are given
training whenever it is needed. The decisions and strategies that is made by the Board of
directors is important to report to the shareholders.
2. Assessing and evaluating the effects of external environmental influences on Barclays Plc.
PESTLE analysis is a strategic tool that is utilised in the organisation by marketers to
analyse macro environment and identify how the political, technological, environmental,
economic, social and legal affect the operations and decisions of the company.
Importance of PESTLE analysis
This analysis is very helpful for studying the surroundings or environment in which
Barclays operates (Banica and Hagiu 2015). The external marketing environmental analysis is
the very first stage of the auditing procedure that creates the information that is important for the
industry to begin to identify the issues that will need to address by Barclays in order to develop
successful strategy (PESTLE Analysis, 2019)
The analysis provides visualize of all the factors in one place for better decision making.
It is important for the organisation to carry out the PESTLE analysis as;
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 It gives a deeper understanding of those elements that directly or indirectly affect the
business.
 It gives a knowledge about which factors boost the growth of the company and on which
factors company need improvement that accelerate the decline of the industry.
 Barclay need to carry out the PESTLE analysis to make full use of the opportunities
arising from the changes.
Political Environment
Political factor is related to the level of intervention of the national and local government
in the business environment (Lin and et. al., 2016). Political factor plays an important role in
determining the factors that can impact Barclays long term profitability This factor includes legal
issues and government regulations and it includes various elements such as;
 Political stability
 Level of corruption Intellectual property protection
 Anti-trust laws related to foreign money centre banks
 Trade restriction and tariffs related to financial
 Tax policy
 Employment laws
 Environmental regulations
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Illustration 2: PESTEL Analysis
(Source: PESTLE Analysis, 2019)

The political environment include; political threats in the country and stability of government
where the bank is operating in. Barclays bank is one of the top bank those branches are
established worldwide thus, they need to unite with all the government policies to grow its
business. For Barclays, 2016 was a challenging political environment that is characterised by
new regulatory capital rules from the government of UK (Banica and Hagiu 2015).
Barclays Bank as a financial institution works within the political scenario across 50
countries and covers the types of political regimes. The sustainability of agenda of Barclay has
expanded rapidly that reflects the increasing focus on the company on the wider nature and also
growing interest of the stakeholders in the competitive world of financial businesses. In the
company, there is now a great awareness about the global issues and challenge such as;
demographic shifting, climate change, scarcity of resources and poverty (Schaltegger and
Wagner, 2017). In 2003, the government of UK introduced “White paper” on credit card
borrowing that tends to affect the profitability of Barclays Business.
Over the last two decades, from lower taxation policies Barclays UK has benefited
throughout the western geographical area that resulted in increasing spending and high profit in
R&D.
Economic Factor
The Economy environment affects the buying power of potential consumers and the cost
of capital of the firm. It consists;
 Type of economy system in the country
 Labour cost and productivity in the economy
 Unemployment rate
 Inflation and interest rates
It was analysed that the volatile exchange rate can impact investment plan of Barclays not only
in short run but also for long run (Kozubíková, Homolka and Kristalas, 2017). The company is
committed to the economic environment as it paid dividends in £1.1 billion to its shareholder, £1
billion in taxes and over £3 billion the employees as their salary. The low unemployment rate in
U, low interest rates and growth in GDP have supported credit card portfolio of Barclays.
It allows the bank to leverage good skill employees in the current market to create global
opportunity. In 2015, profit of Barclay dropped down by 14% as well as modern day recession
also affects banking industry widely. UK's economy contracted in 2008 following on the onset
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of global economic crisis. The slow down of economy negatively affect job creation in UK that
weakens the market. As, the economy remains weak, the investors and interested consumer in
the banking are getting low (Calabrese and et. al., 2018).
Social Factor
Social environment includes the cultural aspects and demographic. This factor generally
affects the need of customer and size of potential market. It includes;
 Emphasis on safety
 Population growth rate
 Skill and demographic level of the population
 Leisure interest
 Education level and education standard
Social factor is the significant role in the expansion of a bank (Hamilton and Webster, 2018). It
is essential for the Barclays Bank to ensure that its consumers are satisfied or not and its brand
image is maintained. In 2010, the company shut down more than 150 branches in the rural areas
mainly.
On the positive note, ageing population in the UK and US market affecting Barclays.
According to the ONS (Office of National Statistics), medium age in the UK has increased over
the last 40 years from 35 years in 1974 to 44 years in 2014. The ageing population comes with
great business opportunities for Barclay as consumers with pension age have more incomes and
they are likely to looking for investment and wealth management in the bank (Ibrahim and
Primiana, 2015). The bank improve their strategic decisions and focus on the customers as
effectively understanding of their needs.
This factor analyses that the consumer targeted by Barclays Bank gives a very high
preference to experiential service and products and the bank need to spend more energy to meet
the requirement, preferences and expectations (Schaltegger and Wagner, 2017). The UK's most
prominent market have an increasing trend of income inequality that altered the power structure
from a period of time.
Technological Factor
This factor can influence outsourcing decisions, reduce efficient production level, lower
down the entry barrier. Technological factors include;
 Research and development activity
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 Technology incentives
 Rate of technological change
 Rate of technological diffusion
 Technology's impact on offering the product
Technology change the term of banking now the banking industry has reached a tipping point
where the digital capabilities are fast and evolution of banking is accelerates that literally every
facet banking can now be done online (Kozubíková, Homolka and Kristalas, 2017). The
information technology has impacted the way of conducting business. It makes important for
Barclays to consider the use of the latest technology in order to stay competitive with other
banks. The rise of digital players, FinTech are leveraging technology to enter financial markets
that simplify the process of banking to customers. Barclays Bank uses the mean of technology in
the areas of inclusive banking. The purpose is to help the people in fight against poverty through
the financial system. Technology makes possible for the organisation to empower the system.
The company is affected by fast changing technological landscape and trying to adapt the
technology effectively that meet the need of consumers. In 2010, Barclay accused for not being
able to help its consumers to access their accounts to check bank balance and transfer their
money (Calabrese and et. al., 2018).
On this part, Barclay Bank are active in invest in digital and mobile capabilities and
develop new technology to improve their offering. It is one of few banks that started Block-chain
technology based transition.
Environmental Factor
Every market have their own norms and environmental standards that can impact the
profitability of an organisation. It is essential for the company to critically evaluate following
environmental factors;
 Laws related to environment
 Waste management in financial sectors
 Climate change and weather
Environmental factors deals with environment that is related to the issues of the bank. Climate
change can alter the process of the bank and ways of consumption that react to the market. It is
essential for the organisation to consider the environmental laws in the specific countries and
evaluate what they need to do to meet those regulations and laws (Hamilton and Webster, 2018).
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They apply the environment in their business by recognising the current trends in government
and consumers demanding and the bank reduce the carbon foot print by energy consumption in
2015.
They contribute 15% of their revenue to the environmental activities conduct by the bank
in order to waste management in financial sectors.
Legal Factor
Legal factor includes;
 Discrimination laws
 Employment law
 Data protection
 consumer protection
 Health and safety law
Barclay operates in many countries thus, it is controlled by various legislations and laws of
different countries. The changes in the legal framework, policy and banking regulatory actions of
any country affect Barclay's business. Generally laws regarding consumer protection, privacy
and trade practices affects the bank most (Ibrahim and Primiana, 2015). There are many people
within or outside the bank that frauds in many terms.
The government of UK introduced Banking Act 2009 on 21st Feb. that provides the
authorised tools to deal with building societies and failing banks. This act stable the Barclay
Bank and enhance confidence in the UK banking system. The banking act help Barclays to dela
with those frauds. It is essential for the company to maintain all the laws regarding their
employees and consumer they serve. The bank is authorised and regulated by Financial service
Authority under the financial service and market act 2000 (Lin and et. al., 2016).
Conclusion
From the above study it has been evaluated that Barclays Bank Plc is one of the leading
finance service provider and the BOD is the leaders of the bank and they are responsible to
develop and implement effective strategy that help the company to grow further innovatively.
There are various factors that affect the business environment. In this study, external analysis has
been analysed that affects the operations and decisions of the bank. It also has been evaluated
that company need to consider those factors to make strategic decisions for the future.
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references
Books and Journals
Calabrese, M. and et. al., 2018. From mechanical to cognitive view: The changes of decision
making in business environment. In Social Dynamics in a Systems Perspective. (pp. 223-
240). Springer, Cham.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Ibrahim, R. and Primiana, I., 2015. Influence Business Environment on the Organization
Performance. International journal of scientific & technology research. 4(4). pp.283-293.
Teece, D. J., 2018. Business models and dynamic capabilities. Long Range Planning. 51(1).
pp.40-49.
Banica, L. and Hagiu, A., 2015. Big data in business environment. Scientific Bulletin-Economic
Sciences. 14(1). pp.79-86.
Lin, Y. and et. al., 2016. Political networking strategy and firm performance: a moderated
mediation model. International Journal of Conflict Management. 27(4). pp.570-590.
Schaltegger, S. and Wagner, M., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
Kozubíková, L., Homolka, L. and Kristalas, D., 2017. The effect of business environment and
entrepreneurs’ gender on perception of financial risk in the smes sector. Journal of
Competitiveness.
Online
PESTLE Analysis. 2019. [Online]. Available
Through:<https://www.business-to-you.com/scanning-the-environment-pestel-analysis/>.
Barclays Plc. 2019. [Online]. Available Through:<https://home.barclays/>.
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