Internal and External Factors Affecting Metro Bank's Success

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UNIT 4
BUSINESS AND BUSINESS ENVIRONMENT
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Table of Contents
INTRODUCTION........................................................................................................................3
LO1........................................................................................................................................... 4
P1......................................................................................................................................... 4
P2......................................................................................................................................... 5
LO2........................................................................................................................................... 7
P3......................................................................................................................................... 7
P4......................................................................................................................................... 9
LO3......................................................................................................................................... 11
P4....................................................................................................................................... 11
LO4......................................................................................................................................... 13
P5....................................................................................................................................... 13
P6....................................................................................................................................... 16
CONCLUSION.......................................................................................................................... 18
REFERENCES........................................................................................................................... 19
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INTRODUCTION
With the rapid growth and development of the marketing environment, there are various
types of organizations which are classified as public, private and voluntary on the basis of
the total revenue generated by an organization, number of employees present in an
organization and many other factors. The proper sequencing of the business environment
provides a better understanding of the internal and external factors which affects the
working structure of the business. The report defined here provides a detailed analysis
considering various factors such as supply, laws, government, and customers which
contributes to the decision-making of an organization (Bohari et al., 2017).
The report majorly focuses upon the detailed analysis of the internal and external factors
along with defining the various types of organizational structures of the famous UK bank
named as Metro Bank. This bank has been defined to be operated as the public operated
the bank.
Metro Bank was developed in the year 2010, in the month of July. This is the public
organization which provides the range of banking services in the retail sector to the business
and personal set of customers. The company has been growing rapidly and serves to
establish 200 branches by the year 2020. The launch of Metro in the UK was on the basis of
the successful antecedent, defined as the commerce bank established by Vernon Hill in the
USA, 1973 (Bohari et al., 2017).
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LO1
P1
INTRODUCTION
In terms of defining the various set of organization associated with the business
environment, the organizations are majorly classified on the basis of public, private and
voluntary organization. In which various set of procedures and strategies are applied which
leads towards the development and growth of organizations in an effective way.
BODY
The classification of business has been determined on the basis of considering the major set
of factors and procedures associated with the growth and development of an organization.
In order to determine these factors in an effective way, the major set of components which
reflects on the process of decision making in an organization are defined as management,
stakeholders and many other components. These type of factors contribute towards the
profit generation in an organization along with providing a contribution to the overall
economy of the country (Borkar, 2013).
The major types of an organization classified are:
PRIVATE ORGANIZATION
The type of organization which is not controlled by the government bodies and aims to earn
profit among the sales which have been made by allowing the employees to increase the
extra benefits and income associated with them. These type of organization generate a high
set of revenues by competing with the competitors in order to provide the best set of
products and services to the customers. This type of organization serves to earn a high
amount of profit (Bouckaert et al., 2016).
The example of this type of organization which serves to be the competitor of the Metro
Bank has been defined as Shaw brook Bank Limited. It the commercial and retail bank
situated in the UK. This company was founded in 2011. It has its headquarters established in
Brentwood, England, UK. The parent company of Shaw brook has been defined as
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Shwabrook Group PLC. In 2015, bank defined initial public offering which raised the cash of
£90m in terms of acting as the support towards the future growth and development of an
organization.
PUBLIC ORGANIZATION
The type of organization which are mainly controlled by Government and which aims to
provide the set of services to maximum numbers of people without considering profit as the
major factor after making the product available to the customers. These types of
organization are funded by the government in the form of defining fees and taxes to be paid
by the customers.
The example of such type of organization includes the Metro Bank, UK.
VOLUNTARY ORGANIZATION
The type of organization which majorly focuses towards the aim of benefiting and helping
people without considering the factor of profit generation is termed as a voluntary
organization. These type of organizations does not generate revenue for the workers as
they use charity towards the work without defining any set of income.
The example of such type of organization is the TSB bank (Trustee Saving Bank) which is
defined as the industry of banking and financial industry. This bank was founded on 27
November 1985. Its headquarters are located in Edinburgh. Scotland, UK. The bank has
defined 500 branches along with 8500 employees working in the company (Bull et al., 2016).
P2
SIZE AND SCOPE OF AN ORGANIZATION
The size of the Metro Bank has been defined to be growing since the establishment. By the
end of 2014, the organization has established its 31 branches in the area of greater London.
Along with this, the company aims to grow its business by offering the initial public offering
on the stock exchange rate of London. This defines the fact that Metro Bank has been
classified under medium scale business
The size of TSB Bank has been defined as the large scale business which is defined as the
industry of banking and financial industry. This bank was founded on 27 November 1985. Its
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headquarters are located in Edinburgh. Scotland, UK. The bank has defined 500 branches
along with 8500 employees working in the company.
The size of Shawbrook Bank has been defined as the medium-sized organization, which has
been aiming to be converted into large scale business (Chen et al., 2014).
MICRO BUSINESS SMALL BUSINESS MEDIUM BUSINESS LARGE BUSINESS
It is the type of
business having
less than 10
employees
(Hillary, 2017).
It is the type of
business having a
range of employees
between 10-20 and
have a limited
number of
resources.
The type of business
having a maximum
number of employees
as 250. It acts as the link
among small and large
businesses.
It is the type of
business associated
with government
bodies.
It defines the set
of an organization
having financial
capital less than
$50,000.
It includes the set
of activities defined
in an informal way
towards the
development of an
organization.
It is dependent upon
the long term planning
of strategies and plans
to be implemented.
It majorly focuses on
the long term planning
along with focusing on
the working pattern
(Chen et al., 2014).
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LO2
P3
ORGANIZATIONAL STRUCTURES AND FUNCTIONS
The functions related to the organizational structure are:
 Revenue Growth: Development of product: It defines procedures applied towards
the product manufacturing
 Accountability: It includes a set of factors defined for the organization's stability
For Shawbrook Bank, the bureaucratic and hierarchical structure is defined, in order to
enhance the overall profit generation of an organization. It the commercial and retail bank
situated in the UK. This company was founded in 2011. It has its headquarters established in
Brentwood, England, UK. The parent company of Shaw brook has been defined as
Shwabrook Group PLC. In 2015, bank defined initial public offering which raised the cash of
£90m in terms of acting as the support towards the future growth and development of an
organization (Craig and Campbell, 2012)
Figure 1: Organizational Structure of Shaw brook
Source: (Hillary, 2017).
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The organization named as Metro Bank follows a hierarchical structure. Metro Bank was
developed in the year 2010, in the month of July. This is the public organization which
provides the range of banking services in the retail sector to the business and personal set
of customers. The company has been growing rapidly and serves to establish 200 branches
by the year 2020. The launch of Metro in the UK was on the basis of the successful
antecedent, defined as the commerce bank established by Vernon Hill in the USA, 1973
(Craig and Campbell, 2012).
Figure 2: Organizational Structure of Metro Bank
Source: (Hillary, 2017).
The organization named as TSB defines the single corporate structure, which treats every
individual equally. The size of TSB Bank has been defined as the large scale business which is
defined as the industry of banking and financial industry. This bank was founded on 27
November 1985. Its headquarters are located in Edinburgh. Scotland, UK. The bank has
defined 500 branches along with 8500 employees working in the company (Hillary, 2017).
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Figure 3: Organizational Structure of TSB
Source: (Hillary, 2017).
P4
The functional and departmental activities serve to define complexity towards the
organizational structure. The availability of resources in an organization is defined by
evaluating interrelationship among various factors affecting business such as the supply of
import and export in an organization in various locations. Apart from this, there are various
other factors which vary from organization to organization depending upon the progress of
the organization.
FUNCTIONS DEFINED TOWARDS THE WORKING OF ORGANISATION
The set of functions defined towards the retail banking organization, Metro Bank is:
PRODUCTION DEPARTMENT
It is the type of department which defines a various set of procedures and techniques which
contributes towards the development of an effective set of policies and condition serving
effective for customers (Borkar, R., 2013).
DEVELOPMENT -RESEARCH DEPARTMENT
It has been defined as the block of growth and development defining the set of issues faced
by the customers and to provide the best suitable set of strategy to overcome the problem.
This attracts the majority of customers to be benefited from various services provided.
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MARKETING DEPARTMENT
It includes the set of marketing theories and procedures related to providing the benefits of
various policies provided by an organization towards its customers. The structures which
define scope and size related to major operations are:
International Organization
It involves the import and export done towards the international market. The scope and size
of such an organization are defined to be huge and expanding in nature.
Global Organization:
It includes an organization which provides services beyond the boundaries of own country.
The Metro Bank serves to establish its business in Hong Kong in 1973 and many other
countries. It has also established in about 67 different locations of the world.
Transnational Organization
The set of complex organization which defines investment towards foreign operations along
with the facility of the central corporate is defined as a transnational organization (Bull et
al., 2016).
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LO3
P4
PESTLE ANALYSIS
Political- the change in the political instability of the UK will affect the business of Metro
bank. Since there is political change in the country and this will affect the financial policies
and the regulatory policy in the banking sector. The legal framework, the changes in
intellectual property rights, etc. will also influence the business of metro bank (Kolios and
Read, 2013).
Economical- The economical factor includes the economic situation of the country, its
inflation rate, the interest rates, SLR and CRR, etc. if the SLR and CRR will rise than the funds
with the bank will be restricted and hence the ability to give loan will reduce. Same goes
with the interest rates the rise in interest rates will decrease their customers of the bank
and will reduce its profitability (Kolios and Read, 2013).
Social- social environmental factor means the cultural and social believes of the country
population and their current trends, for example, the education level, class structure or
income level, gender differences, etc. affects the loan taking ability in the metro banks
(Kolios and Read 2013).
Technological- the technological developments of the country and by the competitors of the
metro will affect the profitability and revenues of the metro bank. The rate of technological
diffusion also influences the customer base (Kolios and Read, 2013).
Legal factor- the legal factor includes the legislation, laws that are related to employability
laws, the equality laws, antitrust laws, data protection law that are most important to
maintain the privacy and security of the account holders of a metro bank (Kolios and Read,
2013).
Environmental- the changing environment will surely affect the operations of metro bank as
the climate change and global warming will want the business to transform their
technologies for which funding will be required hence this will increase the profitability of
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metro bank, the CSR activities of metro bank will increase its goodwill in the market and in
the minds of consumers (Kolios and Read, 2013).
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