Virgin Money UK: PESTLE Analysis & Global Impact on Business

This case study provides a comprehensive analysis of Virgin Money's business environment in the UK, focusing on macro and micro environmental factors. It employs the PESTLE framework to evaluate the political, economic, social, technological, environmental, and legal influences impacting the banking industry. The analysis considers the economic environment, including factors like inflation, exchange rates, and economic cycles, and examines the global business environment's effects on Virgin Money's operations. It also highlights the importance of understanding customer behavior, supplier relationships, and competitive dynamics in a globalized market. The study concludes that banks cannot operate independently and must adapt to changing business environments while complying with regulations and considering environmental and social impacts.

BUSINESS ENVIRONMENT -
INDIVIDUAL CASE STUDY

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Examining the economic environment of business.....................................................................3
Examining global business environment and its impact on country............................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................8

INTRODUCTION
Virgin money is the UK is linked with UK largest bank sectors consisting the 6.5 m
clients, it is innovative digital platform, contact centres, network of stores and relationship
managers. The organization aims to provide sustainable and long term growth.
In the case study of virgin money will discuss about the economic environment factors by
conducting the pestle analysis to evaluate the changes being formulated in business environment.
It will also provide relevant sources to examine the global business environment and how it
impacts towards the countries with emphasis on UK.
MAIN BODY
Examining the economic environment of business
PESTEL analysis is the strategic tool for identifying the macro environment of
organization, the changes in external factors will not only impact the company but also on other
players working within the same (Cepel and et.al., 2019). The industry is comprised with various
services segments such as banks, credit card companies, building societies, real state brokers.
Banks are unable to act on the independent basis and should provide services on the basis of
particular laws and regulations which impact the growth and offerings. The banking service
impact all countries, it is submissive to various factor and specifically concerning to the
economy as well as government. So by implementing the relevant analysis will help to procure
contextual information of business directions, positioning and growth targets while concerning to
the risk to productivity. It will be helpful for determining the various outcomes related to existing
products or services and to conclude the new product development. Some factors which impact
the functionality of banking industry are political, economic, social, technological, environment
and legal.
Political factors
The political concerns play the significant role in demonstrating the factors which may
impact the organization long term profitability in certain market or country (Gunaseelan and
Kesavan, 2020). The company is operating in banking services more above dozen countries and
expose themselves to several types of political environment as well as political system risks.
Virgin money can access to the outcomes by analysing the various factors investing in certain
markets. It can be concluded as political stability and significance of ban segments in country's
economy. Also, the level of corruption can be specially levels of regulations in financial sectors.

On the other hand there can be anti trust laws related to bank concerns as well as favoured
trading partners. The price regulations are the pricing regulatory mechanism for financials. It can
be said that some analysis argued will be unnecessary government involvement is not always
supportive for the industry. Conversely, other represents that government's intervention which is
very crucial for confidence of financial institutions. For instance, British government previously
develop several loan schemes to support business which was drastically impacted by crisis. The
schemes were backed by the government, banking services made agile decisions to issue services
to interested business without any worries.
Economic factors
The economic factors are concerned with macro environment aspect like savings rate,
inflation rate, foreign exchange rates and economic cycle determining aggregate demand as well
as investments in economy (Çera, Belás and Strnad, 2019). While micro environment term can
be concluded as competition norms affect the organization competitive advantage. In order with
to the same firm may utilize the growth rate and industry economic indicators like banks growth
rate, customer spending patterns to predict the success trajectory for not only sector but also of
the organization. Moreover, the factors can be concluded as while conducting the analysis which
shows the type of economic system in country operations, what kind of economic system is and
its stability. On the other hand if the country faces the steady economic growth, then the
profitability of banking sectors would likely to be positively impacted. Whereas as the demand
for financial obligations financing is more likely to go upwards. It would develop difficulties for
new entrants and limits competitions as well as innovations. Thus, considering to some other
factor can be described as infrastructure quality in banking, education level in economy,
exchange rates and stability of host country currency. The skilled workforce also provides the
major role economic outcomes of service being concerned within the specific areas of
development into the macro factors.
Social factors
Society culture and the procedures of performance impact the culture of firm in such
environment. Shared belief and attitudes of populations is crucial for how marketers at virgin
money understand about their clients for particular market and how design the message for
conveying the message for bank industry client. Some other social factors can be concluded as
demographics and skilled level of accumulation, strong structure in society, class structure and

hierarchy. It is essential for business to manage its operations while catering the best service
facilities to the customers and make the long term growth articulate the relations with people in
industry. The cultural influences how buying behaviour and necessities, how people see and
utilize the banking options. Individuals turn the banks for advice and assistance for loan related
to business. Consumer desires to get the seamless bank experience and on the other hand
technology is growing towards allowing them to buy products without any assistance from
banks. The social and cultural factors exists in the country itself and impact to the demand for
product and services in the financial service industries. Society culture and methods for
performing actions impact of organization in macro environment. Mostly it consisted of people
attitudes which elaborates the health and environmental awareness etc. Some people not use
credit cards due to interest that are not allowed through faith systems. Most of the youth
segments are preferred with utilizing the debit, credit cards and online modes of payments. While
many seniors are not keen with utilizing mobile payment methods.
Technological factors
Technology is immensely growing and taking place in all the sectors in this modern era,
whereas transportation industry is the perfect example of illustrating the concerns. From past
years' industry has bee transformed really fast and not even providing the chance to established
player to bear up with changes (Belás and et.al., 2019). Car industry is growing towards the
automations led by technology entities such as google and manufacturing is disrupted by tesla
that have bee stated the electronic car revolutions. The organization should not only make the
technological analysis but also consider the speed at which technology interrupt industry. Slower
speed will procure the time while fast speed of technical commotion might provide the company
little time to align with and become profitable. Technological concerns includes the recent
technological developments through virgin money competitors. The service becoming more
digital and automated will appeal to customers. In similar manner lack of advancements in
technology or unable to deliver the cost of technological adoption may be barrier to market entry
for new players. The technological concerns provide people with various visibility of all
financial data in timely fashion. They can carry out the credit score and balance score of their
accounts online. Artificial intelligence will be adequate for forming up with qualitative decisions
over cash flow and analysing.
Environmental factors

There are various markets which have various norms and standards that impact
profitability of the organization in the respective markets. Although, even within country it states
that it could have different environment and liability laws. While pre entering to the market and
starting the new business in existing markets it is essential to understand and assess
environmental standards which is required for operating in the market. There are some of the
environmental concerns which business may consider such as climate change, weather, laws
regulating the environment pollutions, recycling, waste management financial sector and air or
water pollution regulations in banking sectors (Safiullin, Abdukaeva and Elshin, 2019). The
services will impact positively on global basis as such by making the environmental friendly
initiatives like paperless statements from banks. Customers also do not make put efforts going to
the branch for making banking activities. The physical part and perspectives of baking services
industry have direct impact ion emissions and so on firm may assess to the wants of meeting
with zero targets by government none other than leaving actions over others.
Legal factors
In several amounts of countries there are legal frameworks and institutions are not burly
enough to protect the intellectual property right of company. It is mandatory to execute before
taking step towards such market, it may lead to theft of organization secret act and the overall
competitive edge (Akpoviroro and Owotutu, 2018). Some of the legal terms which can be
considered by company before making such decisions. Some of the laws are health and safety
law, consumer protection and commerce, discrimination law, data protective, employment law,
intellectual property laws etc. several countries have their own laws and regulations which
impact the industry in different ways. The service provides need to know and follow the rules set
by the central banks. Data protections are the modern concern for banks to keep their data from
being misused. By anti trust laws in such segments are statutes formed by government to assist
consumers from ravening business practices ensuring fair competition. The country is having the
range of laws which protect customers and regulates how business operations are being
managed. The aim of such laws is to procure equal playing field for same services being
operated in similar industry while preventing them from amplification too much power over its
substance.

Examining global business environment and its impact on country
Micro environment are the factors which refers to culture in which it directly contacts
with company and impact the day to day activities of business straight away (Brenner, 2018). It
can be said that the collection of forces and factors are closure to entity which could influence
performance as routine activities of the firm. They can influence the company operations and
ability of management to accomplish the business goals. The global business environment is
affecting banking business. There are range of impacts are being poured on the business.
Customers-
Due to widening globalization the customers are having ample choices to make their
decision keeping number of banks in mind (Zámborský, 2020). It is affecting business of Virgin
bank. The organization is having great presence in number of market yet there are mammoth
number of markets are out of its grab.
Suppliers-
In banking sector the investors are the biggest supplier of funds. Due to exploration of
international business model they are having ample number of alternatives to go with. It is
affecting the business negatively yet at the same time some better things are also coming. For
instance the organization may also notch up other realms.
Competitors-
As it is known that the present market is free for making entry. The organization is going
through the phase where making entry in the market is quite simpler (Wei, Thurasamy and Popa,
2018). So a huge competition is being faced. With this regard some negative impacts such as
hyper competitiveness, challenges offering same services etc.
Workers:
Due to widening globalization and changing norms of global business the trade unions
are getting augmented. It is also pouring on some extra responsibilities on the organization to
meet hyper needs (Fabus, 2018). At the same time it is also offering some positives too, such as
ability to extend better sets of services and course of actions.
Marketing efforts:
The organization is also having rigours need to decipher its ideas in mind slicing manner.
It would be opening new realms of notching up skyrocketing accomplishments.

CONCLUSION
From the above case study of virgin money it has been examined in detail about macro
environment of banking industry which shows that banks can't run their operations on
independent basis. It has been further briefly described by executing economic environment
factor applying the relevant model such as PESTLE analysis to assess the changes being
developed in business environment. Moreover, it has been measured with relevant sources to
determine the global business environment and its impacts towards the countries with emphasis
on UK.

REFERENCES
Books and journals
Akpoviroro, K.S. and Owotutu, S.O., 2018. Impact of external business environment on
organizational performance. International Journal of Advance Research and Innovative
Ideas in Education. 4(3). pp.498-505.
Belás, J. and et.al., 2019. The impact of the public sector on the quality of the business
environment in the SME segment. Administratie si Management Public.
Brenner, B., 2018. Transformative sustainable business models in the light of the digital
imperative—A global business economics perspective. Sustainability. 10(12). p.4428.
Cepel, M. and et.al., 2019. Selected economic factors of the quality of business
environment. Journal of International Studies.
Çera, G., Belás, J. and Strnad, Z., 2019. Important factors which predict entrepreneur's
perception in business risk. Problems and Perspectives in Management.
Fabus, M., 2018. BUSINESS ENVIRONMENT ANALYSIS BASED ON THE GLOBAL
COMPETITIVENESS INDEX (GCI) AND DOING BUSINESS (DB): CASE STUDY
SLOVAKIA. Journal of Security & Sustainability Issues. 7(4).
Gunaseelan, S. and Kesavan, N., 2020. Business and economic recessions in India during the
Covid-19–A review. Journal of Xi'an University of Architecture & Technology. 12(4).
Safiullin, M.R., Abdukaeva, A.A. and Elshin, L.A., 2019. Features of assessment of regional
business cycles: Methodical approaches and paradigm of the research. Journal of
Environmental Treatment Techniques. 7(1). p.911.
Wei, L.H., Thurasamy, R. and Popa, S., 2018. Managing virtual teams for open innovation in
Global Business Services industry. Management Decision.
Zámborský, P., 2020. A blueprint for succeeding despite uncertain global markets. Journal of
Business Strategy. 42(3). pp.168-176.

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