Comprehensive Business Analysis of Merrill Lynch: A Detailed Report

This report provides a comprehensive business analysis of Merrill Lynch, an American investing and wealth management company. It begins with an introduction to business environments and organizational structures, focusing on how Merrill Lynch's clients, Aviva and JP Morgan, utilize functional and divisional organizational structures. The report then delves into the inter-relationships between different organizational departments, specifically marketing, human resources, and finance. A PESTLE analysis evaluates the political, economic, social, technological, legal, and environmental factors affecting Merrill Lynch, particularly in light of Brexit. Finally, a SWOT analysis examines the company's strengths, weaknesses, opportunities, and threats, and how these relate to external factors. The report concludes with a summary of the key findings and references.

Business and business
environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 2............................................................................................................................................1
Types of organizational structures Merrill Lynch clients follow and the inter-relationships
between different organization's departments.............................................................................1
TASK 3 ...........................................................................................................................................3
PESTLE analysis of Merrill Lynch investment .........................................................................3
TASK 4............................................................................................................................................6
SWOT analysis of Merrill Lynch and its interrelationship with external factors.......................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................8

INTRODUCTION
A business is an economic activity done with the end motive of achieving profit
(Strydom.and Rudansky-Kloppers, 2016). Every business operates in a dynamic environment.
Business environment is the sum total of internal and external factors that affect the working of
an organization. Internal factors are those factors that directly affect the working of the business.
Internal factors include customers, employees, competitors and suppliers whereas external
factors affect the business indirectly and they cannot be controlled. External factors include
political, economic, social, technological, ecological and legal factors.
Merrill Lynch is an American investing and wealth management company that was
founded 105 years ago in the year 1914. It is founded by Charles E. Merrill and said to be one of
the most valuable banking companies in the United States. The company currently employees
more than 15000 employees and is a subsidiary of Bank of America. It is headquartered in New
york city, USA.
TASK 2
Types of organizational structures Merrill Lynch clients follow and the inter-relationships
between different organization's departments.
Merrill Lynch has thousands of business clients globally. Different companies follow different
organizational structures. The two major client companies of Merrill Lynch are Aviva and JP
Morgan. (Pearson, 2017).
Aviva is a British multinational insurance company and has about 33 million customers
in more than 16 countries. The company is headquartered in London, United Kingdom and
employs around 30,000 people. Therefore, it is imperative for the company to follow a proper
organizational structure in order to efficiently interact and communicate with them.
The company follows functional organizational structure. This structure is concerned
with organizing employees. The employees are grouped on the basis of their knowledge and
skills. All the employees of different departments are structured vertically in the order of their
position right from the CEO to the lower level employees. In functional organizational structure,
the employees are distributed work on the basis of their skills and knowledge (Teece, 2018).
Advantages of functional organizational structure
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 The major advantage of functional organizational structure is that employees are
assigned job according to their skills and knowledge, this further increases the efficiency
and effectiveness of the organization (Hillary, 2017).
 It avoids confusion and conflicts in the company as employees get to know to whom they
are accountable to. This further saves the time and efforts of the employees in the
company.
 Standardization of work boosts the confidence and morale of the employees. Increased
motivation leads to their increased productivity and is beneficial for the company in the
long run.
JP Morgan Chase is an American Multinational bank and financial services company
(Prajogo, 2016). The company was founded in the year 2000 and is headquartered in New york
city, USA. The bank deals in investment banking, capital investment, global wealth management
and underwriting services. As of 2019, the bank employees around 265,000 people from all
around the world. It is not an easy task to manage all the employees and monitor their
performance continuously. Therefore, the company follows divisional organizational structure
where the employees are divided on the basis of their service, functions, geographical location
and project.
Advantages of divisional organizational structure are
 Divisional organizational structure makes it easy for the employees as they realize their
accountability which means that they know to whom they have to report to and take
orders from. This avoid wastage of time and efforts (Deasy.and et.al., 2016).
 JP Morgan Chase offers a lot of services to its customers in different markets therefore it
this organizational structure is beneficial for them.
 This organizational structure is much faster as compared to others when it comes to
responding to local market needs.
Relationship between different organizational departments.
 Relationship between marketing and human resource department: Marketing is the
process of conversion of a concept into an actual product and selling it whereas human
resource is concerned with recruiting and selecting the right kind of people at right place
at right time (Laudon.and Traver, 2016). Both are the important pillars of an organization
and are inter-related to each other. Effective marketing activities are only possible if the
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organization has retained skilled human resource. The employees of Merrill Lynch will
be responsible for the success of marketing activities. On the other hand, successful
marketing activities will increase the worth of the company which would further help
them to attract skilled talent into the organization. Therefore, both play an important role
in the success of a Merrill Lynch (Belás and et.al., 2015.).
 Relationship between marketing and finance department: Finance is the life blood of any
organization. It makes various decisions like how much money a department will receive.
Every department directly or indirectly depends on the finance department for allocation
of funds whereas marketing helps in maximising revenue generation (Erasmus,
Strydom.and Rudansky-Kloppers, 2016). The role of marketing is to develop a unique
product or service and then to promote it which further helps Merrill Lynch in profit
maximisation. Therefore, both are related to each other in one way or the other.
 Relationship between marketing and Human resource department: The marketing
department focuses on maximum consumer satisfaction whereas the production
department aims towards creation of unique products and services. Both of them are inter
related and cannot do without each other .
TASK 3
PESTLE analysis of Merrill Lynch investment
As banking sector plays a very essential role in every economy of the country and
includes segments like retail banking, investment banking as well as wealth management.
Opportunities are huge in this sector in respect to growth. Except these trends several other
forces that influence banking sector is regarding in respect to growth as well as business. The
factors are increasing income in respect to middle class, increased use of technologies.
Regulatory factors, economic factors like GDP and various other forces that have impact on the
banking industry.
PESTLE is the detailed analysis of the environment in which business is located. These
macro environment factors includes the (political, economic, social, technological, legal,
environmental) which will help the Merrill Lynch to evaluate the position in respect to market.
Merrill Lynch( Bank of America) works as per the guidelines provided by federal authorities.
Merrill Lynch focuses on providing financial services in order to ensure the quality at the same
time security. PESTLE will help to identify the impact of the macro factors on Merrill Lynch.
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Political factors
Political factors plays an essential role in financial services sector that may have impact
on the Merrill Lynch due to the Brexit. The rules, policies, restrictions as well as limitations is
considered in the banking industry. This can assist Merrill Lynch in recognizing the design that
whether the political environment is stable or not at the same time what are the kinds of policies
of the government that will assist to influence the laws. Due to the strict government rules and
regulations of UK the Merrill Lynch can face difficulties in dealings because the changes came
from the Brexit may not be positive such as Shift needed money as well as chances may arise
that the Tax payers are also high. as it is leading repositories in respect to public savings and it is
criticized as obstruction regarding growth. There are many factors that can affect Merrill Lynch
to make the system stable are such as the role of social media, tax policies, corruption and
bureaucracy , controllable and uncontrollable trends, employment legislation. (Belás and et.al.,
2015.)
Economic factors
These economic factors can help Merrill Lynch in identifying the current market
situation and for this the bank need to shape its current position. Economic factors includes
inflation rates, GDP(Gross Domestic Product), interest rates and other conditions. The banks are
the important factor because it renders loan to various customers and it also plays an important
role in contributing to the growth of the business in respect to UK economy by giving loans to
small scale as well as large scale business. The operations of Merrill Lynch depends on the
whole UK economy. As united kingdom economy is affected by the Brexit to leave the
European Union and results into the high sales of retail during the last year the credits cards
sales on the rises well as interest and also currency rate were shaky. The main objective of the
PESTLE will assist Merrill Lynch bank's contribution in the current economic situation. There
are various factors that can affect Merrill Lynch are such as labour costs, interest rates
speculations and inflation rate in which bank has to keep more reserves then the banks will not
be able to give more loans to customers and the problems like decreasing trade balance, weak
exchange rates due to the negative impact of BREXIT and also creates negative impact on
Merrill Lynch as well as on the whole UK economy.
Social and cultural factors
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These factors plays an essential role in banking industry. Changing customer needs can
affect the growth of the business as well as banking sectors at the same time customers attitude
and demographics have also changed towards different financial service providers as 51.9%
people voted to leave E.U while 48.1% voted to stay in the European union. Brexit Complicates
the relations of the Irish as well as U.K. people and also effects the banking industry in negative
terms. Millennial like professionals or individual person uses the credit cards in respect to all
type of transactions. Even all categories of business take help from banks. With the emerging
increase in the modern 21st century all the customers and millennial want better service. So the
Merrill Lynch should focus on providing extended services to fulfil the needs and requirements
of the customers. There are various factors that can affect Merrill Lynch is increasing utilization
of the banking services in the areas like rural sector, rapidly increasing income of the consumers
like middle class categories, cultural changes, change in customer attitudes and way of living, the
increasing population. (Chang, 2016).
Technological factors
Emergence of new technologies is very important for the banking industry. It can have
impact on Merrill Lynch. Technology is very important in gaining competitive advantage is the
core operator in respect to globalization. Technologies renders quality products as well as as
services at very sensible rate. Due to the Brexit bank facing the unpredictable changes In terms
of telecommunication technology .Merrill Lynch essential services such as internet that should
be used to make the service more efficient. Merrill Lynch can face some issues that can have
negative affect like privacy concerns regarding the usage is increasing, emerging technologies
like online services and apps that are used more by the customers with the smartphones as well
as the bank must have to contribute a large sum of amount in maintaining the technology
Erasmus, Strydom.and Rudansky-Kloppers, 2016).
Legal factors
Legal factor is the another macroeconomic factor that have great impact in the banking
industry. Risks are high in this sectors because of the strict and high regulations. In UK itself
there are various laws generated in the banking sector. Legal factors such as Border between
Republic Ireland as well as Northern island becomes more harder due to the customer and
passport checks within the border. The factors which include in this are regarding the laws and
regulations that are directed by the government as well as trade structures, note regulations due
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to the Brexit . For assuring this factors the Merrill Lynch need to check that the structure is
according to the commercial tool as well as are reliable in respect to global economy. The
concerns of the customers as well as social responsibilities have enabled the government to
generate several laws. Banking is the sector that need a tight control and maintenance as well as
requires proper focus. In order to secure the banking transactions the Merrill Lynch need to keep
in mind the laws regarding the health and safety, discrimination, consumer law, antitrust
regulations otherwise it can negatively affect Merrill Lynch (Belás and et.al., 2015.)
Environmental factors
This factor is the last step regarding the PESTLE analysis which will allow Merrill Lynch
to get know about the environmental factors. Due to the Brexit government announced seven
year transition period with the withdrawal of EU. so that the farmers plan ahead. In order to
consider these factors Merrill Lynch need to take into considerations regarding various locations
as well as its impact on the banking sector. As sustainability in the environment is becoming
important factor for the banking industry as well as for other business too. Environmental
concerns are followed by the different banks globally. All the banks including Merrill Lynch
have started reducing the use of paper transactions and have started using the solar ATM's for the
various transactions that will result to reduced costs in several areas regarding the operations.
The changes in climate can affect the operations of Merrill Lynch bank as well as hurdles can
also be occurred and the following factors that are such as natural disasters, climate as well as
weather changes and various other environmental factors. (Deasy and et.al., 2016).
TASK 4
SWOT analysis of Merrill Lynch and its interrelationship with external factors
SWOT analysis is an effective strategy used by Merrill Lynch to analyse their strengths
and weaknesses. This is also done to identify the opportunities and to counter the potential
threats that can be faced by the company in the near future. The SWOT analysis is performed by
different departments in the company like marketing, finance, human resource and production.
The SWOT analysis is as follows
Strengths
 The American finance company has a strong brand name and more than 15000 financial
advisors located globally. Merrill Lynch is also said to be the biggest financial broking
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company in the world. As Brand name is always protect its company in harsh situation
also such as Brexit” negative impact. Merrill Lynch bank is a reputed brand.
 Merrill Lynch has always given first priority to customer satisfaction. The company with
its interactive customer relationship management techniques has successfully increased
its brand image and overall worth. (Hillary, 2017).
 The company gives proper training to its employees which makes them highly skilled. It
also invests a lot of funds in their training and development which has increased their
efficiency and productivity over time.
Weaknesses
 The fixed cost and expenses of Merrill Lynch are extremely high as compared to its
competitors. This reduces the profits of the company.
 The company lags behind when it comes to use of technology and with the effect of
Brexit ,company posses high loses. This has reduced the market share of the company
because its competitors use advanced technology which also reduces their overall cost.
 The company has recently been a part of few legal controversies which has hampered
their image badly (Laudon.and Traver, 2016).
Opportunities
 Merrill Lynch provides multiple services from banking to wealth management to its
customers. The company with the help of its brand name holds a great opportunity to
diversify its services worldwide.
 Due to its Brand Name the company can again become a market leader by expanding its
services online. This will help the company to gain a bigger market share and maximise
its revenue.
 Merrill Lynch can enter into a new country to offer its services by entering into a joint
venture or merger (Deasy.and et.al., 2016).
Threats
 There has been an increasing competition in the banking and financial sector and is
expected to grow more in the future. Therefore, the growth potential of Merrill Lynch has
restricted.
 The changing government policies due to Brexit also possess a big problem for Merrill
Lynch in the near future. As there is an increase of the competition to the local banks.
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 The shift of consumers from traditional securities to cryptocurrencies has reduced the
revenue of the banking company.
Inter-relationship with external factors
Customer satisfaction is the strength of the organization. It is related with social factor. Company
is engaged in providing high quality services to its target customers. This has helped them in
increasing their overall brand value. (Pearson, 2017)
The weakness of Merrill Lynch is that the company refrain from using modern
technology. This macro factor is related to technological changes. Technological changes are
imperative in today's time and the banking company can convert its weakness into strength by
adopting latest and updated technology.
The changing government policies are a threat to the company. It is related to political
factor. The political factors can be both beneficial or danger for a company. The changing
political rules and regulations has negatively affected the growth of the banking company.
The shifting of customers from traditional shares and securities to cryptocurrencies is a
change in economic factors. The current generation is more dynamic and risk taking. They
expect high returns within minimum span of time. This is not a good news for Merrill Lynch
banking company.
Working on these macro factors can help Merrill Lynch to grow as a company and
overcome its competitors. (Prajogo, 2016)
CONCLUSION
From the above report it has been concluded with the different types of organizations
which covered sole trader, partnership, public, private as well as voluntary organizations. The
report also highlighted the benefits and drawbacks for each organizations and the difference on
the basis of the scope, size , legal structure and purpose of each organizations. The major points
covered in the report are PESTLE analysis, SWOT analysis and inter-relationship between
different organizational departments. Further it has analysed regarding the types of
organizational framework that Merrill Lynch investment clients must adapt and their
interrelation with different functions like marketing with HR, marketing with finance, marketing
with production and in how it is interlinked with the organizational objectives as well as
structure. It has also evaluated the impact of macro as well as micro factors that can have on the
decision making of the business.
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REFERENCES
Books&Journals
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Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business.51(1).
pp.23-34.
Erasmus, B., Strydom, J.W. and Rudansky-Kloppers, S. eds., 2016. Introduction to business
management. Oxford University Press Southern Africa.
Charter, M., 2017. Greener marketing: A responsible approach to business. Routledge.
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perspective for creation of sustainable business models. Business Strategy and the
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Quinlan, C and et.al., 2019. Business research methods. South Western Cengage.
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Auerbach Publications.
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business environment in the SMEs from Czech Republic. Administratie si Management
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ONLINE
BANKING INDUSTRY PESTEL ANALYSIS.2018.[online]. Available through<
https://notesmatic.com/banking-industry-pestel-analysis/>
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