Business Environment Analysis Report: Merrill Lynch's Performance

This report provides a comprehensive analysis of the business environment surrounding Merrill Lynch, a prominent financial services firm. It begins with an introduction to the concept of the business environment and its influence on organizational performance. The core of the report comprises a detailed PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors impacting Merrill Lynch. This includes discussions on Brexit's effects, currency fluctuations, social technology adoption, digital currency, legal compliance, and environmental sustainability. Following the PESTLE analysis, a SWOT analysis is presented, evaluating Merrill Lynch's strengths, weaknesses, opportunities, and threats. The report highlights the firm's established market presence, customer base, and efficient HR team as strengths, while also noting income limitations and past controversies as weaknesses. Opportunities for expansion into global markets and technological advancements are identified, alongside threats from market rivals, economic crises, and changing government policies. The report concludes by interrelating the SWOT analysis with macro-environmental factors, providing a holistic view of the business environment's impact on Merrill Lynch's strategic positioning and performance.

Business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO3..................................................................................................................................................1
Pestle Analysis ............................................................................................................................1
LO 4.................................................................................................................................................4
SWOT Analysis:..........................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Business Environment refers to internal and external factors which influences company's
performance this include factors such as clients, suppliers, co-owners, rival’s improvement in
technology social environmental factors etc. which affects the performance of the organization.
Every organization needs to focus on needs and wants of the clients as well as of the workers to
achieve the goal and objectives stated to us. It impacts on the organization in a positive as well as
negative sides which affect the work environment of the company. Merrill Lynch an American
financial service bank was established on January 6, 1914.with a prime objective of brokerage
and broker-dealer activity. It has around 15,100 employees. Its headquarter is in New York. This
study includes various factors which affect the company directly or indirectly. SWOT and
PESTLE analysis gives a brief of various factors which can affect the healthy environment of the
organization.
LO3
Pestle Analysis
Political:
The voting process to leave European Union by the UK to make trade and working
practices free from the union is defined as Brexit. It was to be held on 29 march 2019, but still
not implemented as the members of parliament disagrees. As if the UK exits the Brexit it will
affect the trade practice in European union which will bottleneck the trade practices across
European borders. To leave Brexit UK needs to pay £39 billion, which the government needs to
pay to European union. Brexit affected various organization and brought about change in the UK
as many of the firms are independently working which has left the European Union. Now the UK
can have a free trade practice by introducing their own laws. This opened a safe business
environment for the UK worker union. Brexit deal can affect the trade practice with the other
countries. Which can affect the performance of the trade. (Charter. 2017).
Positive impact: Merrill Lynch can be beneficial as the taxation policy improves as less of tax
imposed on the bank more of revenue generation. Changes in acts can provide a healthy working
environment.

Negative impact: Merrill Lynch will be at loss, if the tax imposed by government will be high
which leads to loss of customers. Loss of assets can disturb the working conditions of the bank.
Political crisis degrades the assets.
Economical:
Currency fluctuation changes the working condition of the bank. As of government
policies bank needs to generate employment opportunities for young enthusiasts. Economic
factors such as supply and demand scheme if not met it an affect the performance of Merrill
Lynch. If the performance is not met as per demands of the customer’s there will be an economic
loss to the firm. GDP can also affect the performance of the firm. As the revenue generated
much be more than per the working conditions to earn more of profit stability of the firm. Fair
employment must be provided as per the requirements of the organization. The impact of Brexit
was so worse that UK lost its GDP by 4.5%. It has the marginal positive impact on the wages of
low skill service sector. Brexit an issue faced by Government of UK in quitting the European
council will affect the working of the firm. It was analyzed in year 2018 that information related
to UK government Brexit was leaked. It showed that economic growth was stunted by 2-15%.
On the basis of Treasury figures, in 2014 the United Kingdom's gross national contribution
(ignoring the rebate) was £18.8 billion, about 1% of GDP, or £350 million a week. Because the
UK receives (per capita) less EU spending than other member states, a rebate was negotiated; net
of this rebate, the contribution was £14.4 billion, approximately 0.8% of GDP, or £275 million a
week.
(Ji-fan Ren and et.al. 2017).
Social:
Change in HR policies of the bank changes the working culture of the bank. Impact of
social technologies like online payment applications affects the performance of the bank.
Positive impact: Change in social atmosphere affects work culture of the banks, working
strategy of the bank changes which results in performance of the bank. As the social culture
change the bank gets profit as the mindset of workers develop with the social change. Working
strategy changes which increases the growth of the firm (Ruël and Wolters. 2016).
Negative impact: As the social changes occur in a short span of time company is not able to
adapt the frequent changes which affects the performance of the firm.

Technological:
With the rapid innovation in technology banks need to think on a social platform which
are influencing the markets growth. Impact of technology has helped banks a lot as most of the
relevant information can be easily available by which working conditions get easier. Digital
market and digital currency has changed the performance of the bank. Digital currency like
bitcoin has affected the value and reputation rate of the bank. By hiring a syber - security expert
for preserving their data.
Positive impact: Technological changes can help the organization to grow as technology can
provide an easy information access about the rivals which can help Merrill Lynch to safeguard
himself from external force. Customers are more flexible towards the change in technology they
are happier in online transactions than in standing in cue.
Negative impact: Technology affects the bank as change in technology distracts the customers,
if the customers are less bank will decline. Any technical error can give loss of data or loss of
assets of the bank. Hackers can hack confidential file and provide loss to the organization
(Chang. 2016).
Legal:
Any resources of the bank cannot be outsourced by any member as they must be
trustworthy towards the firm. Merrill Lynch tries to safeguarding their own working by
following legal procedures and laws given by the government.
Positive impact: Policies of government helps in easy working of the bank by which influence
of the external aid is minimized. Labor laws provide a sustainable working conditions to the
workers working in the banks. Bank can be safe and secure working under legal rights.
Negative impact: Merrill Lynch have to work in a narrow gap provided by the government. In
case of partnerships legal factors can put a negative impact on the firm (Dey. 2019).
Environmental:
Banks must work under strict environmental factor by reducing the use of paper. Merrill
Lynch try best of its capability to safeguard the environment by creating a green channel by
minimizing the use of plastics and papers and working on digital platform.
Positive impact: Use of digital market helps the bank to use eco-friendly environment which
reduces burden of workers and of the bank. A healthy environment provides a healthy working

conditions. Providing online virtual platform to the customers which reduces their time and
creates a stress free environment for its workers.
Negative impact: Any natural calamity can affect working conditions of the banks as many of
workers will get affected. Bank will get affected if the environmental conditions are not
favorable as no customers will come at that point of time. Delay in networking conditions affect
working culture (Saleem .2017).
LO 4
SWOT Analysis:
Strengths:
Merrill Lynch is one of the well-established firm in UK. With a bigger brand value. It has
a strong customer base. Merrill Lynch has a diversified portfolio it covers major companies of
the UK which are permanent customers to the bank. Merrill Lynch has many branches in UK
which covers over 60% of the market, they have a strong hold on the market. This affects the
social condition as they provided a strong customer service. They have a very efficient HR team
Which are very accurate in their strategy planning which give them profit in a long term
perspective. HR team are very much active in making strategies and achieving a goal. Merrill
Lynch has established global market value in UK which gives Merrill Lynch a strong customer
base.
Weakness:
Illustration 1: SWOT analysis
(Source: SWOT analysis, 2018 )

Merrill Lynch's income goes in the local market which a drawback to the organization.
The revenue generation goes to the local market. There are many controversies about Merrill
Lynch which sets drawback to the bank which creates problem in setting up of new customer
base. By which Merrill lynch faces problem is establishing itself which is a major weakness of
the firm due to controversies clients hesitate to join and deal with the organization. Merrill Lynch
has impact on social condition which had many controversies in the past which has a major
drawback on the bank. Bank is mostly dependent on cost cuts which is major weakness of the
bank (Kopnina and Blewitt. 2018).
Opportunities:
Merrill Lynch can focus on extending his hands to the global market they have a strong
brand name which can help them to establish in a new country. They have high reputation rate in
global context which can help them to establish in a newer market. Merrill Lynch can merge
with small existing groups in a new market and establish itself in the market by the help of
existing firm. Joint ventures can be opened to expand in the new market. Technology updation
by management team can help to sustain in the market which creates opportunities in global
context. By updating in technology the HR team gives training which changes performance of
the firm. Opportunities to expand can be done by building the assets and improvising in the
existing technology. Opportunities need to be seek and achieved to sustain in the market.
(Tallman, Luo and Buckley. 2018).
Threats:
Threats to Merrill Lynch can be rivals which exists in the market whose market shares
are growing with a span of time. We need to change in working strategy of the firm by the HR
team. Crisis in the market can be a threat to the bank as crisis will not gain the economy of the
bank. Recession in any sector can affect the working conditions of the bank, which is a major
threat to the firm. Change in government policies of external affairs change in relationship with
other country can be a threat as a deal or merging with other country's bank can hinder
performance of bank. Many inter country relationships can be affected by government policies.
(Um. 2017).
Inter-relationship of SWOT with macro environmental factors.

Macro environmental factors which can affect the functioning of Merrill Lynch which affect the
swot of an organization which can be explained as:
political factors can affect Merrill Lynch as the taxation policy imposed by the government is
very much high which reduces the profit generation of the Merrill Lynch. Use of e-commerce
websites to regulate the business on the wide network are required which gets affected by the
laws imposed by the government. Level of corruption can also affect the performance of the
organization. Social development of the firm can improve the stability in the market. Market can
lead to the better working conditions of the firm. As the social conditions are met the firm can
generate more profit with local market like restaurants can be according to the local environment
as per the local environment. Social media can also help in the promotions of the firm, by the
posts which reflect as a feedback by customers. Ecological forces such as natural calamity and
environmental factors can affect the growth of the company and affect the performance of
Merrill Lynch. Air and water conditions can also affect the international tourists and affect the
growth of Merrill Lynch.
Technological factors such as newer technical updates used by Merrill Lynch can help in
satisfying the customers. Update in technology like room facilities which can give easy to the
firm. Engineering facilities can be updated like functioning of lift, room services must be
improved. As technology can achieve most of external as well as internal factors which can be
strength to the organization. Technology can be a strength of Merrill Lynch as technological
updates can help to strengthen customer base.
Environmental factors such as age, religion, gender can be a strength to the organization because
demo-graphical factors always helps the organization with the positive points carried out. People
can be additive force for the betterment of Merrill Lynch. As more of demo-graph can give more
of the changes in the functioning of the firm. Change in age structure can give new opportunities
to people as well as to the firm.
Legal factors such as legislation laws which provides a safe working to the organization can help
Merrill Lynch to grow and develop as a firm safe working and healthy living of workers are
provided by the legal laws which must be followed by the firm(Bocken, Rana and Short. 2015).

CONCLUSION
Above study states that by the swot and Pestle analysis done above tells us about the change in
strategies and working conditions which we can make to improve the company's performance,
which help company in a long run. This can also help organization to find the areas of
improvement which needs to be achieved for company's growth and sustainability . SWOT
analysis is done to find out strengths weakness opportunities and threats to our organization
which will be beneficial to organization in a long run. This is done to make profit and provide a
good service to the clients.

REFERENCES
Books and journals
Bocken. N.M.P., Rana. P. and Short. S.W., 2015. Value mapping for sustainable business
thinking. Journal of Industrial and Production Engineering, 32(1). pp.67-81.
Chang. J.F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
Charter. M.. 2017. Greener marketing: A responsible approach to business. Routledge.
Dey.,S., 2019. Business environment.
Ji-fan Ren. S. and et.al., 2017. Modelling quality dynamics, business value and firm performance
in a big data analytics environment. International Journal of Production
Research. 55(17). pp.5011-5026.
Kopnina. H. and Blewitt, J., 2018. Sustainable business: Key issues. Routledge.
Ruël.. H.J. and Wolters. T., 2016. Business diplomacy. The SAGE handbook of diplomacy.
Saleem. M.A., 2017. The impact of socio-economic factors on small business
success. Geografia-Malaysian Journal of society and space, 8(1).
Tallman. S., Luo. Y. and Buckley. P.J., 2018. Business models in global competition. Global
Strategy Journal. 8(4). pp.517-535.
Um. J., 2017. The impact of supply chain agility on business performance in a high level
customization environment. Operations management research. 10(1-2). pp.10-19.
Online
SWOT analysis. 2018. [ONLINE] Available through:
<https://www.investopedia.com/terms/s/swot.asp>