Virgin Money: Disrupting the UK Banking Sector - A Detailed Report

This report examines Virgin Money's disruptive influence within the UK banking sector, focusing on the economic environment in which businesses operate, both domestically and globally. It explores micro and macro factors affecting Virgin Money, including internal aspects like system maintenance, mission objectives, organizational structure, corporate culture, human resources, and technology, as well as external factors such as price fluctuations and competition. The report also includes a PESTLE analysis to assess the political, economic, social, technological, environmental, and legal factors impacting Virgin Money's international business operations, emphasizing the importance of understanding these elements for strategic planning and expansion. The analysis considers the impact of Brexit, economic stability, social trends, technological advancements, and environmental responsibilities on the company's performance and sustainability. Ultimately, the report concludes that businesses in the UK, particularly in the banking sector, face various challenges that require effective strategies to overcome, and it highlights the significance of adapting to the evolving economic landscape and regulatory frameworks.

Virgin Money
Disrupting the UK
Banking Sector

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Examine the economic environment within which businesses operate...........................................1
Examine the global business environment.......................................................................................3
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
There are various banks in the banking sector of the United Kingdom such as private
bank, international banks etc. The banking sector get affected by the activities of the large bank
which, regulates the function of other subordinate banks. Banking sector in UK feels great
growth after banking facilities got available in the mobile phone. The Virgin Group is a large
organisation in established by “Richard Branson”. It is a UK based company that operates
through Clydesdale Bank. It provides a banking services to the small and medium size
enterprises such as; mortgages, current account, deposits, term lending, personal loans, working
capital solutions, overdrafts, credit cards and other transaction services (Ackoff, 2019). The bank
have 1600 branches approximately. In this essay, the economic environment will get examine
within which businesses operates in the United Kingdom and apart from that, the global business
environment will get discuss and it will also get explain the countries benefits of doing trade with
each other.
MAIN BODY
Examine the economic environment within which businesses operate.
There are mainly two types of environment in which the business operates, first one is
micro and another is macro. In the micro environment factors affected the business internally i.e.
customers, suppliers, competitors etc. and in the macro environment factors are affected the
business from outside such as; political social and economical. In the context of Virgin Money
the micro factors which affect the company are;
Maintaining the system- The main purpose of the organisation is to give a better experience to
the customers every time in banking. They just want to make their services and organisation
differ from other banking institutions. This will improve the company image and give more
customers to the company.
Mission and objectives- The organisation wants to give a better experience to their customers,
by providing the better services from the other banking institutions. Providing digital access in
the phones of their customers will make the life easier. Their main aim and objective for the
future is to provide better interest at the time of depositing (Doorey‐Williams, 2019).
Structural organisation- The company carries hierarchical structure which helps the company
in distributing the responsibilities among the top level management to middle level and middle
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level to lower level management. All the members are responsible for their task to their just
above level members.
Corporate culture- The company have a fully digitalized system which offers the best services
to their customers.
Human Resource- The organisation motivate their employee's to give their best and make their
employee's the best assets of the company. So, that they deal customers with well manner and
with great knowledge of finance.
Resources and Technology- The company builds the unique value with the help of using best
technology and tools to determine the environment like; data structure, data environment, data
modelling and various other business analytical tools (S. 2019).
These are the internal factors of the organisation which affects the company internally, in the
external environment there are some factors which affects the business from outside such as;
Rises in prices- Banking sector got highly influenced by the fluctuation of the prices in a
market. Prices put an effect on their interest rates, if there is inflation they diminishes their
interest rates and vice versa in the case of deflation.
Diminishing in the prices- It is the period when there is a less flow of currency in the market. In
this situation interest rate also got fall due to which bank sacrifices its profitability. In this period,
banking institutions finds difficulty to get the customers. Because the demand of money got
decrease in a market which, puts a lot of pressure on banking institutions.
Size of the Bank- The Virgin banking institution is an international bank, all the small-medium
enterprises take the services of this bank.
Apart from the above factors, there many other factors which affects the operations of the
bank according to the situation and the condition of the bank. It depends on the politics,
solvency, liquidity, management, level of technology etc.
Banks are running in every environment, its profitably depends on the situation of the
environment. But, generally the banks are operated in three type of environment.
In the environment of competitors, where there are many banking institution which provides the
similar services. There are some strong banks which gives a threat to the weak banks. In the
banking sector it is really difficult to differentiate the financial instruments, money market tools
and others services (Mogaji, 2018). Therefore, its a tough competition in the banking sector. The
only thing which makes the services differ is the innovation and the ideas of providing their
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services. In UK there is no high competition in the banking sector because of the entrant's policy.
Lower competition is always profitable for the bank as there is no other banks which provides
the different interest rates.
It is really necessary for the banks to regulate the banking activities. In the banking
sector, interest rates, repo rates and other regulatory functions got change rapidly. To being a part
of the banking sector, company has to fulfil all the all the protocols which helps them in
introducing the new innovative and services. There is an act which govern all the financial
institution and services in UK is financial services and market act 2000. The organisation has
many work to regulate which need to be require in a company such as; capital requirement,
financial market framework, short selling regulations, market abuse regulations, payment service
protocols. In UK there are three regularities bodies in UK which regulate the operations of
financial institutions i.e. Bank of England, Prudential Regulation Authority and financial conduct
authority. These regularities bodies are responsible to analysis the authenticity, prudential matter
and conduct of business (Hardy, 2022).
To expand the business, the company has to go across their territory and regulate their
banking activities in outside the country. It is not easy for any banking institutions to make their
customer's, they have to follow that country regulations and framework. The company open their
branches in such type of country in which there is requirement of such services, and where the
company think after doing a deep research about the market. There are some countries where
people wants such financial services like South Africa, Somalia and other countries which are in
need of financial aid or there are some small and medium enterprises got established (Saunders,
2022).
Examine the global business environment.
For any business learning or practice whether local or global, there requires a basic
understanding about the impact of political, legal, technical, economic, social and environmental
on business. Especially, in international business there is must to acknowledge the aspects of
PESTLE. It is a tool which is being used for analysing the market suitability for a business. And
suggest recommendation and solution fro tackling the issues. For any business setting its foot at
international market neds to understand all the factors which could affect the business. To
support the report a company named as Virgin is taken which is multi giant company operating
in 131 countries across the world (Pardoe, 2021). Virgin company providing retail services along
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with small scale banking enterprises. PESTLE analysis business management tool which which
enables a company to initiate strategies and planning for enhancing performance in international
market. The virgin company is looking forward to expand and elevate its business at
international platform by promoting and marketing its set standards with the view to attain long
term goals. Following are the PESTLE analysis:
Political factor: This factor pertains to decisions of the rules of the society, political factor is a
process where government collectively decides the conduct of a company. For a company to get
clean access from governance requires to full fill all the essential components of a legitimate
business (Sabourin and Jabo 2022). The components analysed in this factor is, political
influence, taxation norms, market stability, bureaucracy, business laws, international trade law,
local and global market culture and trend, legal framework, legislation, etc. considering the
impact of Brexit, it is clear that there is huge change in the trade policies and due to this there has
been great chaos stranding ahead of the traders and companies. These political factors affects the
business structure.
Economic Factor: Economy is the elixir of a nation. A company having strong economic base
makes success in very sector. UK is the fourth largest economy in the world which proves its
influence in the world market (Saravanan and Kaur2022). Virgin mobile should focus on making
strong economic base which will help them survive uncertain events. Company should invest in
potential small scale enterprises.
Social Factor: This factor signifies the customs, culture and social trends of the market.
Companies usually does deep and critical research and study of the social factor where it wish to
set its foot. It is very essential to identify the social preferences to cover the market at large. In
the same way, virgin company needs to plan market strategies to understand the preferences of
general public of a targeted market. Study of customer behaviour is inevitable in the world of
business for making strong customer base.
Technological factors: These factors plays major role in contemporary business world. Giant
business corporations have incorporated technology for enhancing their business operations. In
the same way, virgin money can adopt technology to administer their business considering the
company profile and services they avail. Implementation of technology can boost their business
profitability and enlarge customer base. Virgin money can install best Artificial Intelligence to
process their data, which will help in analysing data using mathematical models without
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instruction. Technology helps in resolving advance problems. Therefore, virgin money should
adopt advanced technological factors which directly increase the performance of business.
Environmental factor: This factor pertains to the natural ecology and surroundings and it is
important for any giant organisation to consider environmental factors before initiating any
project or building a plant. The aim of an organisation should be to protect and preserve the
natural ecology of the Earth (Van Overbeke, 2022). Similarly, virgin mobile is no exception, it
needs to adopt and implement eco-friendly approaches. For example, virgin money should
comply with the environmental laws, such as climate condition, effective waste management, use
of renewable source of energy, promote green ecology and many more. Considering the present
condition of natural ecosystem of Earth, it is high time to take needful actions to protect and
balance the ecosystem. By this initiatives virgin money can make positive impression in the
market locally and globally.
CONCLUSION
From the above report, it is evident enough to conclude that, the businesses in UK mostly
focus on small scale enterprises. There are several challenges stand before a businesses which
requires effective methods and strategies to overcome such challenges. Especially, economic
challenges which has the potential to sabotage the entire business. These challenges disrupt the
business functionality and working environment internal and external which highly affects the
productivity of a business. To support this report, virgin money company has taken to
demonstrate the economic environment within which the business operated. Especially, the
banking sector of United Kingdom in respect to mobile and online banking. At last, PESTLE
analysis is made for virgin mobile to counter the factors which affects in business operations
along with effective suggestions.
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REFERENCES
Books and Journals:
Ackoff, R., 2019. Management for Scientists. benefits, 191, p.192.
Doorey‐Williams, S. ed., 2019. Changing the Face of Banking and Finance. Banking on Change:
The Development and Future of Financial Services, pp.125-140.
Hardy, M.R. and Saunders, D., 2022. Quantitative Enterprise Risk Management. Cambridge
University Press.
Mogaji, E., 2018. UK Financial Services Advertisements. In Emotional Appeals in Advertising
Banking Services. Emerald Publishing Limited.
Pardoe, L., 2021. Banking and competition in the UK economy.
Sabourin, V. and Jabo, J.T., 2022. IoT Benefits and Growth Opportunities for the Telecom
Industry: Key Technology Drivers for Companies. CRC Press.
Saravanan, D. and Kaur, P., 2022. Customer Relationship Management in Banking in the UK
Industry: Case of Lloyds Bank. ECS Transactions, 107(1), p.14325.
Van Overbeke, T., 2022. (De) regulating automation: the rise of credit scoring and market-led
banking in the UK and Germany. Comparative European Politics, pp.1-25.
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