Detailed Analysis of Business Environment for Metro Bank plc Report

This report provides a comprehensive analysis of the business environment, focusing on Metro Bank plc. It begins by examining different types of organizations, including Tesco, NHS, and Oxfam, and their respective purposes, sizes, and scopes. The report then explores the interrelation of various business functions, such as marketing, finance, research and development, and the legal department, highlighting their links to organizational objectives. A key component is the application of the PESTLE analysis model to assess the positive and negative impacts of macro-environmental factors on Metro Bank. The analysis covers political, economic, social, technological, legal, and environmental elements. Furthermore, the report discusses the advantages and disadvantages of different company types, such as private and voluntary companies, and how these structures influence their operations and legal compliance. The report concludes by summarizing the key findings and implications for Metro Bank's strategic management and future performance.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P 1 Different types and purpose of companies............................................................................3
P 2 Size and scope of different types of companies....................................................................4
LO 2.................................................................................................................................................6
P 3 Relationship among different functions of organization and there link with organizational
objectives.....................................................................................................................................6
LO 3.................................................................................................................................................7
P 4 Positive and negative impact of macro environment on business........................................7
LO 4.................................................................................................................................................8
P 5 Internal and external analysis of business.............................................................................8
P 6 Interrelation of strengths and weaknesses with external macro factors................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment can be defined as the sum total of all the internal and external
forces that affects the working and operations of business. Business needs to have a complete
check on the environment because the environment is dynamic and keeps on changing. The
present study is based on Metro Bank plc. The bank was founded by Vernon Hill and Anthony
Thomson in the year 2010. The report starts by analysing different types of organizations along
with there size, objectives and scope (Shenkar, Luo and Chi, 2014). Further it will display the
relationship between some functions of company and there link with objectives of company.
Also, it will apply some models to study the impact of environment on business.
LO 1
P 1 Different types and purpose of companies
Name of organization Type Purpose
Tesco Private company The main purpose of Tesco is serve their
consumers in much better way every day
which means that Tesco focuses on everyday
development of its services and products
(Tesco Plc, 2019). The mission of Tesco is just
simple that is to be the champion of consumers
and also helping them in enjoying a better life
and increase the quality ans standard of living
by using the products and services of Tesco.
NHS Public company The major purpose of NHS is to provide a
comprehensive services to all the people and
residents irrespective of their age, gender,
disability, income group, status, religion and
many other such considerations to promote
equality through the services.
Oxfam Voluntary company The purpose of Oxfam behind running the
business is to crate and develop ways and
methods t find solutions to solve the problem

of poverty and injustice (Oxfam purpose and
beliefs, 2011). For achieving this purpose
Oxfam uses a combination of different
programs, trade fairs, public education
programs, sustainable development program
and many other measures.
P 2 Size and scope of different types of companies
All the companies discussed above are of different size and scope. The difference is
discussed as follows-
Basis Tesco NHS Oxfam
Objective The main objective of
Tesco is that it wants
to become the top
most international
dealer and develop UK
and also to grow the
non- food side of the
business.
The objective of NHS
is to put the patients at
top priority and to
improve the well-
being and health of the
patients coming at
NHS.
The objective of
Oxfam is to create a
world without poverty
where people are
valued more and are
treated equally and
there is no
discrimination in the
whole world.
Size The size of Tesco is
around 450,000
employees in the
company.
The size of company
in terms of number of
employees is around
1.7 million of
employees (Botha,
Kourie and Snyman,
2014).
The company is an
international
federation inclusive of
19 organizations who
works together in
harmony in more than
90 countries and
employs around
100,000 employees.

Scope The scope of Tesco is
that it works in
direction of gaining
lifetime trust and
loyalty of the
customers and works
in covering all the
diverse range of
products like
household, clothing,
groceries and many
more categories.
This company
manages the health of
people in a cost
effective method.
Also, it works in
direction of
safeguarding the
financial resources of
public by providing
good health services at
minimum cost.
The Oxfam tries to
help the people and
individuals to live a
better life and to help
the women and poor
people to claim their
rights (Savrul,
Incekara and Sener,
2014).
Legal structure Since Tesco is a large
company and operates
in many countries so it
needs to follow many
types of legal
structure. This is
because of the reason
that all the different
countries have
different type of legal
structure.
The NHS is governed
by Secretary of State
for Health and Social
care and also by
Department of Social
and Health Care.
Since this is a
charitable company so
it is not much
governed by any law
as it works for
upliftment and
development of
society. But it has to
follow the corporate
social responsibility.
Advantages and disadvantages of private company
The major advantage of private company is that it can be easily started and just needs
minimum of 2 members to start the business. On the other hand the major disadvantage is that
the private companies cannot issue prospectus to public.
Advantages and disadvantages of public company

The major advantage by starting a public company is that a public company can easily
raise the capital by issuing share to the public (Georgescu and Popescul, 2015). But there are
many disadvantages also like it has more of legal compliance and more rules and regulations.
Advantages and disadvantages of voluntary company
The major advantage of being a voluntary company is that since it works for welfare of
society so it can be opened easily and with less involvement of money. Whereas the major
disadvantage is that a voluntary company needs to maintain its credit rating to sustain for longer
(Schaltegger, Hansen and Lüdeke - Freund, 2016).
LO 2
P 3 Relationship among different functions of organization and there link with organizational
objectives
For running the business successfully it is very essential that all the functions of business
are properly performed and all the functions are performed in coordination and harmony. This is
because of the reason that all the functions of business are interrelated and if one function goes
wrong then it affects working of other function as well. So it is very necessary to maintain sync
and harmony among all functions.
Interrelation of different functions of Metro bank plc
Marketing with finance- the marketing is a department or a function which performs the
work of marketing these services of bank into the market so that its client base improves. The
finance is a crucial and the most important function within the bank. This is because of the
reason that without money or finance no other function or activity can be performed within the
bank. On the other hand, marketing is the function which requires a lot of money as marketing
techniques and tools used are very expensive and costly. So it needs to work in proper
coordination with finance function.
Research and development and legal department- since the banking business is totally
dependent on the rules and regulation of banking law so it is very necessary for bank to have a
good research and development function. The role of this function is to continuously do a
research and study any changes in any law which impacts the bank's working. Then it conveys

the changes to the legal department of bank (Cadle,s Paul and Turner, 2014). So it is very
necessary that both the functions performs there work in sync because if R&D does not perform
its function properly then if there are any changes in law then it will not be adopted and this will
lead to loss for bank.
Link with organizational objective and structure
The interrelation among all the functions of business is also linked with the objectives
and structure of the business. This is because of the reason that if the functions of business are
not performed in coordination and harmony then it is not possible for company to achieve its
objectives and goals of the business (Schaltegger, Lüdeke - Freund and Hansen, 2016). On the
other hand, if all the functions of bank performs all the functions of there business in
coordination then it will lead to less time consumption, completion of work before time and if
the work is completed on or before time then automatically all the objectives and goals of
business will be automatically accomplished.
LO 3
P 4 Positive and negative impact of macro environment on business
PESTLE analysis is an analytical tool which is used by the companies in order to analyse
the impact of all the changes in the macro factors affecting the company and its working and
operations. The PESTLE analysis of Metro Bank plc and its negative and positive effects are a s
follows-
Elements Positive effects Negative effects
Political The local government is very
helpful because it equally
allocates all the resources
among all banks and also
provides some subsidies and
relaxation in laws and rules
and regulations.
Since Metro banks performs in
many countries so it is a
possibility that it has to face
many types of political
instability which might hamper
its working.
Economical The increase in the
liberalization and globalization
Fluctuations in exchange rate
has a negative impact because

of trade policy is helpful for
bank as now it can go to other
countries also and invest there
(Shehu and Mahmood, 2014).
the bank operates in many
currencies and if there will be
major changes in exchange
rate then it may suffer losses.
Social Since there is an increase in
the income and standard of
living of people, so they take
more loans and advances to
maintain there standard so it is
beneficial for bank.
Before entering into new
market, metro bank needs to
assess and understand the
needs and perception of people
of new market and also to
understand there demographics
and educational background.
Technological The recent and new
technologies and its adoption
is very helpful for bank as it
improves its working level and
quality.
Using the latest technology I
very expensive and also the
bank needs to arrange for
training session to make the
employees understand the
latest technology
Legal The government has made
discrimination laws in order to
protect the employees and
their rights.
Since Metro bank operates in
many countries so it has to
follow many types of laws and
regulations which at some
point of time can be confusing
and chaotic.
Environmental It performs the corporate
social responsibility towards
the society effectively.
Application of many
environmental standards and
laws which the bank has to
follow.

LO 4
P 5 Internal and external analysis of business
The SWOT analysis is a type of model which is used by any company or person in order
to identify its strengths and weaknesses which are internal and also some opportunities and
threats which are external to the company or person. In the following points there is a complete
SWOT analysis of Metro Bank plc.
Elements Description
Strengths Source of revenue- with the basic business of
banking, Metro bank plc also has invested in a
number of other avenues in financial sector.
This has enabled company in developing a
robust system of revenue collection.
Weaknesses Declining market share- since the profit
margin is increasing in the banking sector so
more and more companies are developing in
the banking sector and because of which
market share of Metro bank is declining
(Enqvist, Graham and Nikkinen, 2014).
Opportunities Tie up or merging- merging or a tie up with
local players or the local banks present in the
local market can be a great opportunity for
Metro bank to increase its market share.
Threats Shortage of skill- Since there is so intense and
tough competition so there is more of
employees turnover and because of this reason
there is a threat of shortage of skilled human
resources.

P 6 Interrelation of strengths and weaknesses with external macro factors
There is a great relation between the strengths and weaknesses with the external
environment. This is because of the reason that both the strengths and weaknesses are related to
the macro environment because of the reason that the changes within the macro environment
majorly affects the strengths and weaknesses of Metro bank. This is because any change in
macro environment leads to either development of a strength or a weakness.
For example, the Metro bank has strength of having different sources of revenues and this
strength can also be converted into a weakness with some changes in the economic environment.
Like suppose if in economic environment, the government has reduced the interest rates and
because of this reduction, Metro bank's interest income on the investment will be reduced.
On the other hand in the case of weakness, it can either also be converted into a strength
or even the worst weakness due to some changes in the macro environment. For example, the
bank has a weakness of declining market share due to new entrants. If suppose the government
makes restrictions on entry into the banking sector then it is possible that it may turn into a
strength. In just the opposite case there may be situation that government promotes new entries
into the market (Arasti, Zandi and Bahmani, 2014). Because of this political factor the situation
will get worse and competition will get worsen.
CONCLUSION
By the end of the report it can be concluded that understanding and evaluating the
business environment is very necessary and crucial for successful running of business. Till the
end it can be interpreted that there are different types of companies like public, private and
voluntary which are different in respect of size, scope and objectives. Furthermore, it highlighted
the interrelation among different functions of organization and its link with objectives of
business. Further, with the help of some models like PESTLE and SWOT analysis it was
concluded that the internal and external factors affects working and operations of business. At
last the report outlined the relation of internal and external factors.

REFERENCES
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