FE4055QA: Business & Economic Environment Analysis of Barclays PLC

This essay provides an analysis of Barclays PLC within the UK banking sector. It begins by outlining the structure of the UK banking industry and Barclays' position within it. The essay then employs a STEEPLE analysis to examine the social, technological, economic, environmental, political, legal, and ethical factors impacting Barclays' operations over the past 5-10 years. Micro-economic factors influencing the demand for banking services, determinants of supply, and the competitiveness of the UK market are also discussed. The essay further touches upon the impact of fiscal policy and concludes by summarizing the business problems and challenges faced by Barclays PLC. Desklib provides access to similar solved assignments and past papers.

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TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Structure of the industry...............................................................................................................3
Nature of the company.................................................................................................................3
STEEPLE analysis for Barclays Plc............................................................................................4
Micro-Economical factors...........................................................................................................7
Determinants of supply of business.............................................................................................7
Competitiveness of UK market....................................................................................................8
Fiscal policy.................................................................................................................................8
Business problems and challenges...............................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is the encompassing of the factors which affect the company's
operations and includes customers, competitors, stakeholders, suppliers, industry trends and
regulations of the government. In this project the chosen organization is Barclays Plc which is a
universal bank headquartered in London. This organization is a part of the banking industry
which is a public limited company listed in the FTSE 100 Index. This organization consist of the
British retail banking operation for providing the consumer credit, wealth management and
corporate banking for both small and medium-sized business in UK.
MAIN BODY
Structure of the industry
The structure of the banking sector in UK fall under the restricted universal category.
This is due to the discouragement which the banks get for owning a commercial concern. In UK
the banking sector consists of the “big four” banks (Kokkinis, 2019.). These banks are the
HSBC, the Royal Bank of Scotland Group, HBOS and Barclays Plc. The structure of the these
banks is affected by the financial activities that are provided by the society,
 Offering money transmission services through cheque books and credit cards.
 Personal loans, unsecured.
 Foreign currency exchange
 Investment management
 Stock Broking
 Provisional and underwriting of insurance.
Nature of the company
Being one of the top four organization in the banking sector Barclays Plc it has the nature
of focusing on prioritizing the services to the customers over anything else. In this sector this
organization has range of specialists to support the sector needs,
Agriculture :

It helps agricultural-food business and estates for their forward plans.
Business Services :
Has a dedicated business services team.
Charities :
Is trusted banking partner for not-for-profit and development organizations.
Education :
It is the leading partner to education providers.
Energy and Infrastructure :
Support activities of commodities trading and alternative energy, oil and gas.
STEEPLE analysis for Barclays Plc
Social Factors :
The demographics and skill level of population impacts the level of services that is
provided by Barclays Bank. This is the factor which influences the hierarchy and power structure
in the Banking services. The education level of impacts the type of services that this company
can provide. The entrepreneurship spirit in the country influences the Barclays Plc to provide
financial support more individuals and groups (Panadès-Estruch, 2021). Barclays Plc is known
for the support it provides to the start-ups for the growth of their business. Hence, having a
business nature in the society is very effective for the growth of the business to bring growth to
the society and also increase own revenue. The culture of the country is also the factor which has
the power of determining the services that this business will provide to the organization. The role
of the gender impacts the social conventions and can be the reason for the growth of not-for-
profit organization. Barclays Plc has been known for supporting the not-for-profit organizations.
The interest of the society on the Leisure is also a factor which influences the banking operations
of this organization. Customers interest in the stock market also provides ample of opportunities
in the banking sector for this business.
Technological Factors :
Technology is a factor which is fast disrupting the different industries across the world.
For the banking sector is has the power of influencing the ways in which the business is able to
transform really fast. This is the factor which impacts the establishment of the Banking sector for
coping with the changes. Hence, technology is the factor which influences the speed at which the
technology disrupts the industry for slowing the fast speed of technological disruption. This is

also the factor which has a little time to cope and be more profitable (Hawken and et.al., 2021).
The technological analysis is considered to be the involvement for understanding the impacts.
Technological factors can help the business in influencing the operations of the company. The
development of new technologies helps Barclays Plc to gain the technological developments
through the competitors and impact the product offering. The technological factors are
considered to be the one which allows the company to bring new services to the organization.
Major impact of new technology affects cost structure that impacts foreign money Centre Banks
industry. Technological diffusion can be the reason why the Banks may face huge loss
depending on the level of investment they have made previously on these technologies.
Environmental Factors :
The environmental factors affect the operations of Barclays Plc mostly indirectly. It
influences the areas and sectors which this organization needs to focus on for sustainability.
Barclays Plc has been investing in many projects. This organization has its own Environmental
Risk Standard which are policies that determine the supporting environmental risk standard that
will be applied for the identification of the circumstances in which the bank requires diligence
(Panadès-Estruch, 2020.). The consideration of a wide range of potential impacts including on
the air, water and land quality is the reason which influences the Banks to take steps towards the
community health and safety. Laws which regulates the environmental pollution impacts the
demand of credit in the market. The financial sector was previously known for the waste it
produced However, in the last 5 to 10 years the Barclays Plc has totally changes its operations
digitally. This bank is now focusing on providing loans at low rates to the companies which have
the green “attitude” towards their business practices. This organization has been donating in
charity for saving the endangered species for the sustainable growth in the market.
Political Factors :
Barclays Plc in UK operates in Foreign Money Centre Banks in many countries. Hence, it
is exposes itself due to different types of political environment. This Bank takes dynamic foreign
money centre banks industry for various countries in diversification of the systematic risks.
Hence, the selection of the political environment before the company enters the market is very
important. Political stability can impact the growth of the banking operations for example, Brexit
was a political delima that was the reason for great losses for the organization (Liu and et.al.,
2021). Politics in the country is the reason why the organization influences the level of

corruption which is especially regulated in the financial sector. The legal framework for contract
enforcement is the factor which influences operations of the banking sector and the areas in
which it can invest and lend money into. The political environment influences the business in
relation to the pricing regulations which is mechanism for the financial benefits. Taxation
policies of the government has the power of influences the tax rates and incentives that directly
impacts the operations of the financial services. The safety regulation in the country is the reason
which influences the mandatory employee benefits that are essential for the growth of the
business.
Legal Factors :
The legal framework of Barclays Plc is that of a listed company in London Stock
Exchange. The principles and provision of the Code has been found be the complied by Barclays
Plc for fulfilling the essential requirements. Information disclosure in the annual report of this
organization is mandatory due to the corporate governance statement requirements in the law of
Governance section of Annual Report. This is the reason due to which the NE rules are followed
in UK corporate governance practices instead of those applied in the US. The Anti-trust law in
the Foreign Money Centre Banks industry impacts the operations of this company. There are
many other laws which this organization is falls under in order to manage its recreational
benefits. Employment law, Consumer protection, Health and Safety law and also the data
protection law are the ones which impacts the daily operation of Barclays bank. The evaluation
of the firm needs to carefully evaluated before entering the markets for leading theft of
organization's secret to gain the competitive edge. The laws of copyright, patents and other
intellectual property are also the legal requirements which can influences the credit provided by
this organization.
Ethical Factors :
Maintaining ethical factors is very important for Barclays Plc which has been recently
involved in one of the largest banking scandals in European history. This company was fined
over £290million for the manipulation of interest rate which made the services more expensive
for the customers (Wood, 2021). This was an unethical practice by Barclays in which made
borrowing money more expensive for customers to increase the profits that are made through
lending money. For being socially responsible the management of this company now have to
earn back the respect that it has lost in the market through adapt too much more ethical approach.

For influencing the ethics into the management of this company it decided to cancel the bonuses
of the employees and also changed its structure for influencing better and more ethical decisions
to be taken. This organization has been investing in many not-for-profit organization so that they
can prove themselves as more ethically trust worthy. For this organization the management of
this ethics can be considered to be the influence of the ethical approach to the leadership which
can change the direction of this bank.
Micro-Economical factors
The micro-economic factor which changes the demand of the banking services are,
 Change in the preferences of the customers can impact the demand of the banking
services. The individuals in the market adapting to more of entrepreneurial mindset can
also be the reason which changes the composition of the population.
 The changes in the prices of the living standards and capital can be considered to be the
reason that would impact the demand of banking services (Jegadeeshwaran and
Basuvaraj, 2019).
 Expectations of the customers of Barclays may change due to the influence of the
competition in the market which can affect the demand of the quality and expectations.
Determinants of supply of business
The determinants of the supply for Barclays Plc are,
Open market operations :
The central banks buys the government bonds which is the factor that can influences the
supply of money hence impacting the supply for Barclays Plc and its banking services.
The reserve requirements :
Prices
Quantity
D0
D1

The percentage deposit which is needed to be kept hold of rather than lend out is also the
key determinant that impacts the supply of the organization (Nyanaro and Bett, 2018).
Interest rate set by central banks :
The rate of interest determined by the central bank influences the ability of the banks to
lend or borrow hence influencing the bearing on the supply of money.
Competitiveness of UK market
The market of UK for the banking sector like Barclays Plc is very competitive this is due
to the big four banks which are the most prominent force. These banks are the HSBC, the Royal
Bank of Scotland Group, HBOS and Barclays Plc. This shows the tough competition that
Barclays has to face in this sector. Other than these major competitors there are other
international and medium-sized banking institutions. The competition in this industry is affected
by the services that are provided by these competitors in the market. At the present the
organization which is the most successful in this market is the HSBC holdings.
Fiscal policy
Some random consequences of the UK governments fiscal policy are,
 The aim of the UK fiscal policy was to mitigate the collapse in UK economic activity but
the recession made the public finances more precarious.
 The biggest impact was on the employment reattainment which fell after the fiscal policy
of the government (Wadesango and et.al., 2020).
 This increased the demand of the public investment to be made in the market due to the
downfall of the economy because of pandemic.
Prices
Quantity
S0
S1

 Due to these factors the desire for private savings increased in the organization and
hence was the result of productive investment.
Business problems and challenges
The biggest problem and challenge for Barclays Plc are,
 High competition in the market.
 Lack of economic stability due to global pandemic.
 Ethical issues regarding overcharging interest to customers.
 Changing preferences of the current generation that resulted in the loss of control in the
business has been very difficult for Barclays to manage.
CONCLUSION
From this project it can be concluded that Barclays Plc has a lot of competition in the UK
market due to which it has had negative influence in the market. This project has explained the
different macro and micro environmental factors that impacts Barclays Plc.

REFERENCES
Books and Journals
Hawken, S., and et.al., 2021. What makes a successful Sponge City project? Expert perceptions
of critical factors in integrated urban water management in the Asia-Pacific. Sustainable
Cities and Society. 75. p.103317.
Jegadeeshwaran, M. and Basuvaraj, M., 2019. Impact of Non-Performing Assets on Operational
Performance of Foreign Banks in India and Macro-Economic Determinants.
International Journal of Business Analytics and Intelligence. 7(1). pp.36-45.
Kokkinis, A., 2019. Exploring the effects of the ‘bonus cap’rule: the impact of remuneration
structure on risk-taking by bank managers. Journal of Corporate Law Studies. 19(1).
pp.167-195.
Liu, C., and et.al., 2021. Linking soils and streams: Chemical composition and sources of
eroded organic matter during rainfall events in a Loess hilly-gully region of China.
Journal of Hydrology. 600. p.126518.
Nyanaro, N.N. and Bett, S., 2018. Influence of strategic planning on performance of commercial
banks in Kenya: Case of Barclays Bank of Kenya. International Academic Journal of
Human Resource and Business Administration. 3(2). pp.235-255.
Panadès-Estruch, L., 2020. Building Cruise Berthing Facilities in the Cayman Islands–an
Unfinished Drama in Three Acts/El atraque de crucero en las Islas Caimán: un drama
sin conclusión en tres actos. Etudes Caribeennes. (47).
Panadès-Estruch, L., 2021. Building Cruise Berthing Facilities in the Cayman Islands–an
Unfinished Drama in Three Acts. Études caribéennes. (47).
Wadesango, N., and et.al., 2020. The effects of corporate governance on financial performance
of commercial banks in a turbulent economic environment. Acta Universitatis Danubius.
Œconomica. 16(4).
Wood, N.L., 2021. Private lives, Quaker connections and overseas trading: The family journal
and account book of Thomas Mayleigh (1671-1732). Pharmaceutical Historian. 51(4).
pp.106-117.
Online
Ethical Issues – Barclays plc, 2021[Online]. Available through:
<https://blogs.ubc.ca/timmartiniak/2012/09/30/ethical-issues-barclays-plc/>
Our sector coverage, 2022[Online]. Available through:
<https://www.barclayscorporate.com/industry-expertise/our-sector-coverage/>