Contemporary Business Environment: Virgin Money Bank Case Study

This essay provides an analysis of the contemporary business environment affecting Virgin Money Bank in the UK. It examines the economic environment, focusing on macroeconomic and microeconomic factors and their impact on the banking sector, including income levels, financial markets, and carbon emissions. The essay further explores the global business environment using PESTLE analysis (Political, Economic, Social, Technological, Legal, and Environmental factors) to assess external influences on Virgin Money Bank's operations, considering aspects such as government regulations, market trends, technological advancements, and environmental sustainability. The analysis concludes that Virgin Money Bank must adapt to these dynamic environmental factors to maintain its competitive edge and ensure long-term success.

CONTEMPORARY
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
Examine the economic environment of business which is operating in the UK.........................4
Examine the global business environment which have a impact on the countries......................5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
The contemporary business environment is defined as they have an increasing level of the
competitive and dynamic. It may be changing very fast for the new concepts and may occurs the
effective power for the business. It considers the important aspects for the processes and human
impact on the environment. The organization which will discusses in this report is banking sector
which is Virgin Money bank. This bank is UK's 6th largest bank with the innovative digital
structure. The current report will explain description of the situation, with the help of the
examination of the economic environment and their impact in the United Kingdom's
environment.
MAIN BODY
Examine the economic environment of business which is operating in the UK.
Economic environment is defined as organization may have an impact of external factors
which is influence by the economy. This environment divides into the macroeconomic
environment and microeconomic environment. This may affect the business's decision-making
processes which may have on a firm or consumers. The macroeconomic environment affect the
entire economy and business (Altig and et.al., 2020). Economic environment is important for the
businesses for a fast change in globalization which affect the economic markets. The UK
environment may affect the banking sector positively because UK is most independent and
developed country. The increasing in financial improvement may be inspired by the economic
growth. According to this term the economic growth may create the demand for the financial and
banking sector with the help of this it can grow the economic environment. The financial markets
may help economy efficiently by the direct flow of the savings and investments which may
affect the goods and services productivity.
Income is one of the major factor of the economic environment which may affect the
banking sector with the income of customers. This indicates their ability to spend on the products
which is given through the bank. There may have a variation in demand of money in the term of
the collection and deposits of money which may have a surplus of amount of money. The
bankers need to know about the ability of the depositors of which they want to withdraw the
money from the bank which may have a specific limit of the time (Bahoo, Alon and Paltrinieri,
A., 2020). The demand of money can be suddenly risen on the basis of economic environment

which may have possible for banks to supply the large amount of money. So it may require the
huge ideas regarding the economic environment which may has a monetary demand in the
market.
Virgin Money bank may able to sell with the lower prices which may be attracted the
large number of consumers towards the bank. From the UK environment consumers may able to
get the loan on the lower interest rate which may affect the VM bank's financial positions. This is
because if the customers may able to get the loans on the basis of the lower interest rate they can
buy to their expensive things like their houses and cars. Customers may not have to save and
collect the money to buy those things. They can take loans and then buy the expensive products
and paying in the instalments with the lower interest rate that can be the best way to maintain the
VM bank's dignity.
The banking and finance sector may supposed to have a major contribution to the carbon
emission as a same way to the basic industry and transportation. Usually the activities related to
the finance, banking and payments may have a directly effected by the emissions. Many firms
may offers the same products and services which is regarding their banking sector. The banks
may need to compete with the savings and loans which may be the insurance companies and
investment banks for the businesses (Murphy and Gouldson, 2020). The banking regulations
may constantly change the banking environment. The regulators may have removed the costs
restrictions which they may give the interest rates so bank can may charge the loans and may pay
on the deposited by the customers. Some regulators may still have a limit for the range of the
products which can offers the products and services which increasing quickly. The changing in
the globalization this may affect the banks and other financial sectors which is increasing the
global scope for the economic environment.
Examine the global business environment which have a impact on the countries.
Global business environment can be defined as the different environment in an
independent country which have an external impact on the banking environment which may
influence by the decision-making on a resource uses and capabilities. This may include the wide,
global environmental factors which may be beyond the control of the nation (Owen, Brennan,
and Lyon, 2018). The policy of the free global trade environment which may strengthens the
economy of all the countries.

The PESTLE analysis is a study of the external factors which may influence the country's
environment. It includes the political, economic, social, technological, legal and environmental
factors.
Political factor
This factor represents the external limitations of the businesses and their activities which
may have an outside of business control. These external environment indicates the government
policies and their actions which may have an impact on the economy for a banking industry to
operate their business. The political instability of the country may have a negative impact on the
banking industries. According to the UK's government rules and regulations banking industry
may have to face the major challenges. There may be several aspects that can effect the
government policies that could be added a risk factor and lead to a major loss.
In a term the government they may launch the next level of regulations that may be
examined the financial establishments. Some analysts may argued on the government's
involvement in the private sector which not be that much helpful for them. The legislative law
from the government in the banking sector which may be included the corruptions from the
political parties to win the elections. The laws can be labour laws, trade restrictions and tariffs
which affect the banking sector.
Economic factor
This factor refers to the important data about the economy and market which may
influence the business performance. It may include the costs, wages, interest rates, policies and
so on. These may have an influences by the external factors which indicates the effect on the
business environment. Money and banking may be the important factors which may have an
impact on the overall businesses (Sadeghi and et.al., 2019.). The economic factor may have a
positive impact on the banking sector because of the private bank's profitability which responses
positively.
The banking sector also have a healthy competition and pricing policies. In the form of
banking sector it may have a very healthy competition except the other banks and may have a
freely pricing policies which can a consumer easily buy the products as they want. Money can
have a spreading the influences for the demand of goods and services for the frankly banking
services for the borrowing and lending the money from banks. These economic factor may also

influence the growth and development of the businesses which could be support the overall
business environment.
Social factor
This factor may affect the lifestyles, trends and taste of the consumers. This factor may
have an effect on the demand of the products and services in the banking industry. Social factor
may have an influence on the buying behaviour and necessities of the consumers. According to
the business environment this factor has a positive impact in the banking sector because of the
new trends like digital banking. In the previous era customers had to stand by in the lines for the
services and that was very difficult for them to face this type of inconveniences.
The new generation also prefer to use the digital technology for the banking services.
With the developing of technologies customers are willingly to buy the products through banks
which is very easier for them in current situation (Sharma and et.al., 2020). With the help of
digital banking customers may need not walk to the banks as they can directly search by the
products which they want like, their enquiry about account opening and related to the credit
cards. The change in the preference and people's choices which would form the businesses and
banks to modify their planning about the brand strategies.
Technological factor
This factor is one of the different external environment factors which affect the
businesses smoothly and also an inbuilt component of the PESTLE analysis. This factor may
have a more important effect on the business's success, these variables may use for the evaluation
of the available choices which may have a technological ability. Technological factor may have a
positive impact on the banking sector, which means Virgin money bank offers a many new
technological facilities. In the term of mobile banking app for the account information instantly,
about the transferring the funds through this application and paying bills.
The new technology refers to the change in the banking system like debit cards change. It
means they may have implemented the chip system which require the users to insert that chip
card in the ATM rather than swipe the card in the machine (Urbański, Haque and Oino, 2019).
Other countries like Canada they also launched the new technology which have a tapping option
in that which means tapping on the debit card in the device and that will show the completion of
the transaction. The technological factor may have a more effect on the business's operations
which is success internationally than before.

Legal factor
Legal factor refers to the law which affects the way to operating the businesses. Legal
factor includes the changes in the legislations which may have an impact on the employment and
taxation. The legal environment of business particularly known as the changes in law and know
about the legal feature which affects the businesses. This factor has a positive impact on the
banking sector because they have a privacy and customer laws. They have a banking law also
which means a business needs a legal entity to capable for their state laws that regulate their
operations.
The VM bank may have their security laws which obtained through the different type of
investors which may capable to the legal issues like security law. Every country may have their
different government laws which they may have an employee's protection law. This law protects
the employee against their unfair discrimination at their work place like in bank or the time of
applying the job. They make sure about the discrimination and safety of their employee.
Environmental factor
This factor affects the conditions that exist in the business environment. These factor also
include the government regulations, market trends, competition, change in technology and
economic situation. Businesses which may affected by the bushiness that can be directly and
indirectly. This factor may have an impact on organization positively or negatively (Witt, 2019).
The purpose of this factor to make sure about the clean environment and may have an efficient
use of the energy.
VM bank may publish their report in the soft from to maintain the environment properly.
The Eco- friendly and sustainable have become the better factors in the environment which have
a great impact on the industries as well. This bank may have taken the step of going without the
transactions from the paper and ATMs with the rechargeable feature.

CONCLUSION
From current study, it has been concluded the business environment of the Virgin Money bank.
The above discussion is about the impact of economic environment which affects the business.
The impact of global environment is also explained with the help of PESTLE analysis which
included the negative and positive impact on this bank. Political and legal factor explained about
the laws, rules and regulations in the current time. The other factor addressed the new changes in
the current situation which had a positive impact on the businesses. These factors mentioned to
discuss the impact of the environment which have a major impact on this sector.

REFERENCES
Books and journals
Altig, D. and et.al., 2020. Economic uncertainty before and during the COVID-19
pandemic. Journal of Public Economics. 191. p.104274.
Bahoo, S., Alon, I. and Paltrinieri, A., 2020. Corruption in international business: A review and
research agenda. International Business Review. 29(4). p.101660.
Murphy, J. and Gouldson, A., 2020. Environmental policy and industrial innovation: integrating
environment and economy through ecological modernisation. The Ecological
Modernisation Reader. pp.275-294.
Owen, R., Brennan, G. and Lyon, F., 2018. Enabling investment for the transition to a low
carbon economy: Government policy to finance early stage green innovation. Current
opinion in environmental sustainability. 31. pp.137-145.
Sadeghi, V.J. and et.al., 2019. An institution-based view of international entrepreneurship: A
comparison of context-based and universal determinants in developing and economically
advanced countries. International Business Review. 28(6). p.101588.
Sharma, P. and et.al., 2020. Managing uncertainty during a global pandemic: An international
business perspective. Journal of business research. 116, pp.188-192.
Urbański, M., Haque, A.U. and Oino, I., 2019. The moderating role of risk management in
project planning and project success: Evidence from construction businesses of Pakistan
and the UK. Engineering Management in Production and Services. 11(1). pp.23-35.
Witt, M.A., 2019. De-globalization: Theories, predictions, and opportunities for international
business research. Journal of International Business Studies. 50(7). pp.1053-1077.

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