Business and Business Environment Analysis Report: Metro Bank

This report provides a comprehensive analysis of Metro Bank's business environment, covering various aspects such as different types of business organizations, their legal structures, and the size and scope of Metro Bank within the UK. It delves into the relationships between organizational f...Read More

Business and Business
Environment

INTRODUCTION
Business environment encompasses of the external and internal environmental factors
which consist of customers, competitors, suppliers and employees within the organisation..
Managers should analyse this ever changing environment so as to formulate strategies and
policies in order to sustain effectively in market (Adeoye and Elegunde, 2012). This report is
based on Metro Bank which was founded by Anthony Thomson and Vernon Hill in the year of
2010 operating in UK. It has a large size of 60 banks operating in UK. This report will throw
highlights on different types of business organisations, legal structure followed by them as well
as the size and scope of business organisations. It also analyses impact of external and internal
factors with the help of PESTLE and SWOT analysis so that manager can take proper actions to
survive in this competitive world.
TASK 1
P1 Different types of business organisation and its purpose.
Business organisations are the entity or the enterprises which provides goods and services
to the customers so as to meet their requirements and demands. Business organisations are
divided into three categories described as-
Private Sector organisation- These are the organisations which are owned and operated
by the individuals and the organisations and have no interference of the government. These
organisations provides products and services to the customers with the hope of earning profit.
Metro bank is cited as an example of private sector organisation which is described as follows-
Purpose- Purpose of metro bank is to provide capital to small business and also helps on other
financial matters (Andersson, Forsgren and Holm, 2015)
 Objective- The major objective of metro bank is to provide banking services to the
personal and the business customers in such way to enhance living standard of the
individuals.
Legal Structure-
 Sole Trader- In this form of businesses organisation entity is owned and operated by a
single individual and is responsible for all the financial matters and risk associated with
the business.
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 Partnerships- In this type, business is owned and operated by two or more individuals
where partners have equal responsibility towards the profit and loss of the company.
Public Sector organisation- This type of business organisation is owned and operated by the
government and its major focus is to provide better services to individuals to enhance their living
style.
Purpose- Purpose of NHS is to provide universal free services to the customers so as to prevent
them from infectious diseases (Belás and et. al., 2015).
 Objectives- Main objective of NHS is to eradicate disease from the country and provides
individuals with a healthy living style.
Legal Structure-
 State Government- Here the government has full control over the allocation and
acquisition of resources and performs the role of decision making.
 Central Government- Here central government is responsible for taking the decisions so
as to manage the conduct of business rules and regulations.
 Local Government- Local government is responsible for handing the daily business
affairs and performs the role of monitoring and maintaining the rules and regulations
within the company.
NHS follows the legal structure of the state government.
Voluntary organisation
This form of business organisation is formed to offer social welfare facilities to the
individuals within the society. It is a non profit organisation which caters the needs of the
employees within the society. Financial transactions under this bank are done through donations
and charity. Welcome Trust is a cited Voluntary organisation within UK.
 Purpose- Its main purpose is to provide welfare to the individuals without the hope of
earning profit.
 Objectives- Its main objective is to enhance research and development in the medical
field and aims at benefiting individuals.
Legal Structure-
 Trust- It is categorised in three parties such as trustees, and donors whose main purpose is
to provide welfare to the individuals.
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Unincorporated association- This association is formed by group of small individuals which
works effectively so as to attain short term goals (Chang, 2016).
Welcome trust uses trustees as a legal structure in functioning their activities.
P2 Determine size and scope of a range of different types of organisations
Metro bank which is a retail sector bank provides the customer with banking and
financial services operating in the United Kingdom.
 Vision- Metro bank vision is to become the best financial institution while serving the
needs of the individuals according to their requirements.
 Mission- Mission of the metro bank is to enhance economy of the country while
providing individual with various loan schemes and thereby helps in financial
development.
Size- It has wider size as it is operating in more than 60 locations and has large workforces of
employees serving in UK (De George, 2011).
 Scope- It has a greater scope as the respective business can enter into other banking
sector portfolio thereby helping the customer in providing various investments and loan
options.
NHS- National Health services are a public sector organisation which provides wide range of
health care services and provides individuals with a healthy living style.
 Mission- NHS mission is to provide better quality services to the individuals and
provides a better standard of living.
 Vision- Vision of NHS is to provide universal free services to the individuals and makes
them free from harmful disease.
 Size- It has a wider size of consisting employees of around 2, 00, 000 which is providing
universally free services to the individuals throughout the globe.
 Scope- It has wider scope by providing services in other parts of England and could also
provide dental facilities so as to eradicate harmful disease from the country.
Well come Trust- It is a charitable voluntary organisation which basically deals in bio medical
research field in United Kingdom.
 Mission- Mission of the Well come Trust is to provide better contribution to the
individuals within the society so as to upgrade their standard of living.
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 Vision-Vision of the Welcome trust is to contribute the overall development of the
society by providing the individuals with proper products and services.
Size- It has around more than 2000 employees working in Wellcome trust and provides better
facilities to the individuals (Doppelt, 2017).
 Scope- It can conduct proper research in the biomedical science and leads to develop
more effective products and services of the customers which will improve welfare of the
individuals within the society.
TASK 2
P3.Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
In every organisation all the departments are interrelated and work in coordinated manner
so as to attain the organisational goals and objectives in a efficient manner. Relation between the
organisational functions within Metro bank is described as follows-
Marketing and HR department- There is proper interrelationship between the marketing and
HR department of the organisation which helps them to attain their business objectives in a
proper manner. As HR department is responsible for the proper recruitment and selection of the
candidates and in case of metro bank marketing department works with the HR department of the
organisation as marketing department within the bank is responsible for advertising about their
new financial products and services as well as conducts the market research so as to analyse level
of competition and the requirements of the customer demands. This information marketing
department provides to the HR department at Metro bank so as to recruit the skilled employees
which can conduct the marketing related advertising activities in a proper manner and therefore
helps in attaining the goals and objectives of the organisation in a proper manner(Erasmus,
Strydom and Rudansky- Kloppers, 2016).
HR and Finance Department- HR and Finance department works in interrelation so as to attain
the goals and objectives in proper manner. In context to metro bank HR DEPARTMENT is
responsible for hiring and training of its employees to conduct business activities in a proper
manner To conduct business activities HR department interact with finance department at
Metro bank so as to acquire appropriate funds for carrying out the recruitment and training
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activities and thereby enhances skills of the employees to work efficiently and attains
organisational objectives.
TASK 3
P4 Pestle Analysis of organisation.
Macro environment is the external business environment which consist of factors such as
customers, competitors, suppliers and government which has a influence on the business
operations. PESTLE tool can be adopted by the respected company so as to analyze its positive
and negative impact. It is described as follows-
 Political Factors- This factor governs the political rules and regulations of the country
and specific taxation and tariff policy which affects the functioning of the bank in
positive and negative ways.
Positive Impact- As with the political stability in Uk metro bank can perform their
business operations in an effective manner and moreover there is proper government
allocation of funds and appropriate plans for strategies related to investment helps in
proper functioning of funds.
Negative impact- Metro bank has to manage its regulatory practices in various markets and
changes in the government policies and procedures makes difficult the functioning of business
activities (Hamilton and Webster, 2018).
 Economic factors- This factor is concerned with the economy of the country as well as
the inflation rate, exchange and the interest rate which on both side has a effect on the
functioning of the bank.
Positive impact- With the larger number of customers investing n FDI because of the
stabilized income rate, it will enhance goodwill of the bank as well as attracts large
number of investors.
Negative impact- As with the rise of inflation individuals spending power has been
reduced due to which they are not able to make investment or saving and negatively
impacts growth of bank.
 Social Factors- This factor is concerned to how banking industry responds to changing
needs and requirements of the customer and has a influence in both positive and negative
ways.
Positive impact- As with the different demands of the customer, respective bank is
providing customer with various investment and saving options which enhances goodwill
and productivity within the bank.
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Negative impact- Due to different income level of the consumers they want investments
and saving options differently which creates a complex process for the bank to function
its business activities.
 Technological factors- It is concerned to technological change which the organization
should adopt in order to conduct its business activities in a proper manner. -
Positive Impact- With the increase in online banking services it has created ease for the
customers to easily transfer and withdraw amount leading to attract large number of
customers towards the services of bank.
Negative Impact- It becomes costly process for the company to adapt to technological
change rapidly and also leads to skilled manpower to work in specialized banking
softwares.
 Legal factors- This factor determines the legal laws and legislations which affects
decision making as well as affects the functioning of the respective bank.
Positive- In various countries like UK government has forced banking sector to follow
strict laws regarding customer laws so as to provide them with all the necessary
information and therefore gain their trust and loyalty.
Negative- In various countries there are different employment laws which creates
problem for the company to follow different laws and legislations while functioning
business activities.
Environmental factors- It is concerned with functioning the business activities in such a
manner that doesn’t harm the environment.
Positive- with the increase in online work it has reduced the use of paper within the bank and
contributed to the sustainability of the economic environment.
Negative- With the climatic change as well as various rules and regulations of the
government towards providing eco friendly services and products it has disturbed and made
the business activities a complex process
TASK 4
P5. Conduct internal and external analysis if specific organisations in order to identify strengths
and weakness
In order to determine the internal and external strengths and weakness SWOT analaysis should
be conducted so as take effective decisions and formulates appropriate strategies so as to
overcome weakness and covert them into opportunities and strengths.
Strengths-
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Metro bank has a strong brand portfolio, which helps the organization to develop more
investment and saving options for the customers.
Respective bank is authorised from prudential regulations authority which helps them in
attracting larger customer share towards maximizing profitability.
Weaknesses
Metro bank is not able to meet the challenges because of the new entrants and has lost market
share in niche categories (Hillary, 2017).
Metro bank needs to invest more in technologies as well as update its systems so as to friendly
services to its clients and customers.
Opportunities
Different demands of the customer provides the metro bank an opportunity to offer different
investment and saving opportunities as well as targets larger customer share.
With the liberal taxation policy of the government it has opened various opportunities for the
bank to maximize its profitability and enhance their revenue streams.
Threats
Shortage of skilled manpower in the respective bank presents threat to the company to sustain in
the market for a longer time.
With the intense level of competition, customer share is decreasing and thereby profit margin for
the company is shrinking.
P6 Strength and weaknesses those are interrelated with external macro factors.
Metro banks external macro environment functions are directly interrelated with
company strengths and weaknesses.
 Political: \Political factors prevailing in the country affects the working of the metro
bank in both the positive and negative ways. Its major strength is that it creates more
employment opportunities within the nation and negative aspect is that different political
conditions within different countries affects the working of the bank.
 Economical: This factor is considered with the economic condition of the country it has
strength of increasing consumer spending power by providing them various schemes fir
loans and negatively impacts when the country is facing the inflation period.
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 Socio-Culture: This factor is considered with the social needs of the individuals. It is
considered to the fact that it fulfils the social needs of the individuals and enhance their
standard of living but negative part is that sometimes bank cannot fulfil heavy demands
of the customer.
 Technological: This factor is considered to the technological change within the
organisation it has strength that while upgrading its banking policies it can target large
number of customer but weakness is that of high cost beard by the company.
CONCLUSION
From the above report it has been concluded that business environment consist of internal
and external environment factors which should be analysed by the company so as to sustain
in the competitive market for a longer time period. PESTEL and SWOT analysis is
conducted so as to determine the influence of factors on business and therefore necessary
actions can be taken to remain competitive in global market.
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REFERENCES
Books and journals
Adeoye, A. O. and Elegunde, A. F., 2012. Impacts of external business environment on
organisational performance in the food and beverage industry in Nigeria. British Journal
of Arts and Social Sciences. 6(2). pp.194-201.
Andersson, U., Forsgren, M. and Holm, U., 2015. Balancing subsidiary influence in the
federative MNC: A business network view. In Knowledge, Networks and Power (pp.
393-420).
Belás, J. and et. al., 2015. The business environment of small and medium-sized enterprises in
selected regions of the Czech Republic and Slovakia. E+ M Ekonomie a Management.
Chang, J. F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
De George, R. T., 2011. Business ethics. Pearson Education India.Bernstein, M. H., 2015.
Regulating business by independent commission. Princeton University Press.
Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for
business, government and civil society. Routledge.
Erasmus, B., Strydom, J.W. and Rudansky-Kloppers, S. eds., 2016. Introduction to business
management. Oxford University Press Southern Africa.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
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