Barclays PLC: A PESTLE and SWOT Analysis of Organizational Performance

Desklib provides past papers and solved assignments for students. This report analyzes Barclays PLC's financial performance.

Organisational Types, Functions and Structures
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Table of Contents
Introduction................................................................................................................. 3
LO3............................................................................................................................. 4
LO4............................................................................................................................. 6
Conclusion.................................................................................................................. 9
Reference list............................................................................................................ 10
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Introduction
Business environments consist of all external and internal factors, which influence a
particular business by affecting the numerous functions of an organization. The study
will take Barclays PLC to understand the effect of the macro environment has on its
business operations. It will be necessary to asses both positive and negative impact
these environment has on this company. The last section will give away the
relationship between macro and microenvironment. This study will determine the
strength and weaknesses of the organization. Barclays PLC is a British investment
bank, which has it’s headquarter in UK. The organizations came to an existent in
1690 and the chairperson is John McFarlane (home.barclays, 2019).
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LO3
Use contemporary examples to demonstrate both the positive and negative
influence/impact the macro environment has on business operations
P4 Identify the positive and negative impacts the macro environment has upon
business operations, supported by specific examples.
Macro environment contains various factors outside the organization, which affects
the company in either positive or negative way. There are several factors, which are
affecting the business operations of Barclays PLC.
Political Brexit incident is making a huge impact
on Barclays PLC. It will cause some
regulatory changes in the sector, which
can negatively influence its trade
implications. The stability in politics is
very important for a foreign money centre
bank like this and the condition of UK is
very stable, which will be positive factor
for the company. The continuous
intervention by the government in these
organizations can cause certain turmoil
(forbes.com, 2019). Therefore, they will
have to rethink their policies and
strategies to overcome these issues.
Riots and political disturbances change
the situation of the society and it will
have negative impact on the business
operations of the organization.
Economical The economical structures for different
countries are not same. Therefore, it is
necessary for the organization to
understand the impact of the economical
condition will have on their business
operations. The projected growth of GDP
of UK is 1.1 percent and the economical
growth is 1.2 percent (pwc.co.uk, 2019).
This economic growth will provide more
opportunities of income for Barclays PLC
and they will have to act on this. In
general, there are several other factors,
which usually affect the business
operations of this organization. These
are rate of unemployment, inflation,
deflation and interest, which can cause
disruption in business of the
organization.
Social There is a significant amount of social
changes in the UK presently. This is a
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very crucial point for Barclays PLC and it
will have an influence on the
organization. The structure of power in a
society changes over time and this
dynamic characteristic can become a
major influence for the business
operations of this organization as in near
future, common people will have the
power. This thing can be a positive
change for the organization as more
common-people will invest in their
company. There are factors like
recession and inflation, which will provide
a negative impact on the business of
Barclays PLC (Antoniades, 2018).
Technological The technology in the world is seeing a
rapid change over time and various
inventions can prove to be either good or
evil. There are many cases of banking
frauds in various organizations and it is
causing an impact on Barclays PLC. This
is a negative aspect, which will cause
disruption in the business operations.
The competitors of this organization are
also changing their technology and it will
definitely cause the Barclays PLC to
change their strategies. The advance
technologies will help this company to
use new effective tools to conduct their
business, which is positive (Safeena et
al., 2018).
Legal There are many countries, where the
laws are not strong enough to protect
private data of Barclays PLC. Therefore,
conducting business on those areas will
become a major challenge. The
consumer rights act is giving more
power to the customers of this bank and
this will be a positive change for the
organization, as it will efface many legal
issues (gov.uk, 2019). There are several
others employment and discrimination
law, which will have an impact on the
business operations of Barclays PLC. In
addition, the government can implement
a strict law, which may harm the
business of this organization and
therefore it is a negative factor.
Environmental There are several laws in UK to prevent
the damage to environment. These laws
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have the ability to convict a person or an
organization for harmful waste deposition
and polluting the air. It can be very
difficult to maintain these laws for this
organization, which is a serious negative
impact, as they will have to rethink their
policies. If the organization participates in
various environmental issues to resolve
them, it will improve their image and in
return will improve their business
(legislation.gov.uk, 2019).
Table 1: Pestle analysis on Barclays PLC
(Source: Created by the learner)
LO4
Determine the internal strengths and weaknesses of specific businesses and
explain their interrelationship with external macro factors
P5 Conduct internal and external analysis of specific organisations in order to
identify strengths and weaknesses.
Strengths
 Employees of this organization are
very much capable of increasing
the business.
 The organization is using the
Blockchain technology and
enhancing the methods to
analysis data, which is giving them
an edge over the competitors
(Yeoh, 2017).
 Barclays PLC also uses advance
cyber security techniques, which
helps it to prevent any kind of
fraud.
 They are the first organization to
transfer real documents of
shipping. This method helps the
company to complete a process in
4 hours, which usually takes more
than 10 days (home.barclays,
2019).
 Transparency of information is a
main strength of this organization.
They provide a SPECS platform to
traders, which enable them to
view and change handling settings
of orders from customers.
Weaknesses
 The Libor rigging scandal is
making a huge impact on this
organization. Three Barclay’s
traders played a part in this
scandal and it seriously damaged
the image of the organization.
Therefore, for this reason they are
not generating a good amount of
revenue than its rivals
(theguardian.com, 2016).
 They do not own as much assets
they need to stay in the
competition with other
organizations.
 The operating cost of this bank is
very high and therefore they are
not able to generate maximum
revenues from the profit they get.
 Other banks have a better future
than Barclays and therefore,
employees of this organization are
leaving the company for a better
opportunity and therefore, the
company is failing in staff
retention.
Opportunities Threats
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 Barclays PLC is taking the right
direction when it comes to
inventing better technologies for
customers and traders. They
should implement more of these
methods, which will help them in
growing business in future.
 The organization should take
advantage of the stable political
condition of UK and should
capture the opportunity to spread
their business in a larger market.
 The future of banking is digital and
therefore the company should
focus on taking their every activity
on a digital platform and ensure
the security of it, which is a huge
opportunity (Montazemi and
Qahri-Saremi, 2015).
 They should focus on maintaining
high rate of customer satisfaction,
which will bring new opportunities
for the expansion of business.
 The organization can invest on
assets that are more profitable by
conducting proper market
research and it will bring in new
opportunities.
 The Brexit incident and the Libor
rigging scandal are making a huge
negative impact on the
organization. It is giving significant
threat to the performance of the
company and may harm their
business in future (Kaya et al.,
2018).
 The pay level increase for labours
and workers are a serious threat
when it comes to managing the
operational cost and it will make
serious impact on the
organization.
 There are many banks, which are
doing better than Barclays PLC
and people are shifting their
loyalty to those organizations.
Therefore, the company is losing
significant amount of market and
profit.
Table 2: Swot analysis on Barclays PLC
(Source: Created by the learner)
P6 Explain how strengths and weaknesses interrelate with external macro
factors.
There is a direct connection between the strengths and weaknesses of an
organization with the external macro factors. The factors can often cause threat to
the organization due to a political, social and economical change in the society.
These changes often strengthen an organization or weaken it by improving or
degrading the business.
The Brexit incident, which is a political change in the society, is affecting the
Barclays PLC in a serious manner. This incident produces a huge amount of threat
for business operations of this organization. The company is facing a loss in revenue
due to this and their future looks very unclear. The political stability in the UK, is
adding to the strength of the organization. A stable government helps organizations
to go for braver new business ventures and this can become very beneficial for this
organization. There are lesser chances of public conflict and it will create a good
environment for the business, which in return will generate more revenue for the
company. Political turmoil can cause riots and disruption in the daily life of a society
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and in the end; it can affect the economical condition of the country, which can
cause a serious threat for the business operations (Sulimierska and Miele, 2017).
The economical condition of the common people will increase in future, it is a very
good opportunity for improving the business for Barclays PLC, and it can add to the
strength of the organization. Therefore, it is evident that this economical change is
creating a new opportunity for the company and it is strengthening it. Economical
turmoil can create a crisis in the society and people may have less money to invest.
This can cause a serious threat to the organization and hamper the business. Other
issues like inflation and recession is a huge economical factor, which can add to the
weakness of the organization. The company uses many advance methods for
business transactions and other activities relating to their business with traders. This
technological factor is helping the bank to gain more strength to perform their
business efficiently. Therefore, the evidence is clear and it indicates a direct
relationship between these factors.
The increase in GDP and economical growth will enable people to invest more in
banks and they will buy more bonds and assets from this organization. This positive
change in the economy can bring more opportunity for the bank for further business
ventures and can give them more strength to eliminate competition from the market.
It is evident that competition is a threat for Barclays PLC and eliminating it will need
some new opportunities and strength, which can come from these economical
changes. Therefore, a conclusion can be drawn these that these factors are inter-
related with each other (independent.co.uk, 2019). The Libor rigging scandal is an
internal weakness of the organization, as its employees were involved in it. This is a
major weakness for the company as it questions the moral fibre of its employees and
therefore this incident will create some serious threats in future (Chua et al., 2017).
The high cost of operation is a huge weakness of this organization and can cause a
serious problem if an economy change occurs and increases cost of transportation
and other business activities. These points clearly show that each internal
characteristics of an organization is channelized by an external macro factor. The
connection between these is evident from this study and changes in this will have a
significantly alter various internal factors such as strengths and weaknesses of the
organization.
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Conclusion
The Pestle analysis showed the negative impacts of Brexit on the revenues and
business performance of Barclays PLC and it also gave away the reason behind
future opportunities for the organization due to technological advancement,
economical growth and political stability in UK. The study of strength and
weaknesses of the organization revealed the way Libor scandal affected the image
and revenue of the company and it also showed methods like Blockchain technology
and SPECS strengthened the organization. The last section consisted of a study
about the inter relationship between the internal factors of the organization and the
macro environmental factors. It can be concluded that there is a significant
connection between these factors and these influence each other in a great deal.
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Reference list
Antoniades, A., 2018. Commercial bank failures during the Great Recession: The
real (estate) story. Available at SSRN 2325261.
Bowers, S. (2016). Libor-rigging scandal: three former Barclays traders found guilty.
[online] the Guardian. Available at:
https://www.theguardian.com/business/2016/jul/04/libor-rigging-scandal-three-
former-barclays-traders-found-guilty [Accessed 20 Apr. 2019].
Chua, C.L., Suardi, S. and Chang, Y., 2017. A re-examination of Libor rigging: a
time-varying cointegration perspective. Quantitative Finance, 17(9), pp.1367-1386.
Forbes.com. (2019). Barclays Appears To Have Turned A Corner, But Brexit Is
Likely To Weigh On Profits. [online] Available at:
https://www.forbes.com/sites/greatspeculations/2018/08/03/barclays-appears-to-
have-turned-a-corner-but-brexit-is-likely-to-weigh-on-profits/#6304d9337538
[Accessed 20 Apr. 2019].
GOV.UK. (2019). Consumer rights. [online] Available at:
https://www.gov.uk/consumer-protection-rights [Accessed 20 Apr. 2019].
Home.barclays. (2019). Barclays Corporate Communications | Barclays. [online]
Available at: https://home.barclays/ [Accessed 20 Apr. 2019].
Kaya, O., Schildbach, J., Lakhani, K., AG, D.B. and Schneider, S., 2018. Brexit
impact on investment banking in Europe.
Legislation.gov.uk. (2019). Environment Act 1995. [online] Available at:
https://www.legislation.gov.uk/ukpga/1995/25/contents [Accessed 20 Apr. 2019].
Montazemi, A.R. and Qahri-Saremi, H., 2015. Factors affecting adoption of online
banking: A meta-analytic structural equation modeling study. Information &
Management, 52(2), pp.210-226.
PwC. (2019). UK Economic Outlook. [online] Available at:
https://www.pwc.co.uk/services/economics-policy/insights/uk-economic-outlook.html
[Accessed 20 Apr. 2019].
Safeena, R., Kammani, A. and Date, H., 2018. Exploratory study of internet banking
technology adoption. In Technology Adoption and Social Issues: Concepts,
Methodologies, Tools, and Applications (pp. 333-355). IGI Global.
Sulimierska, M. and Miele, A.A.A., 2017. An investigation how quantitative easing
programme, Vickers’ ring-fencing regulation and the ‘Brexit’announcement impact on
UK banking sector. International Journal of Empirical Finance, 5(3), pp.155-166.
The Independent. (2018). 'Why is the UK economy doing so well given the current
political instability? '. [online] Available at: https://www.independent.co.uk/voices/uk-
economy-bank-of-england-imf-interest-rates-city-of-london-gdp-exports-imports-
a8453381.html [Accessed 20 Apr. 2019].
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Yeoh, P., 2017. Regulatory issues in blockchain technology. Journal of Financial
Regulation and Compliance, 25(2), pp.196-208.
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