Yorkshire Bank: Business Environment Analysis and Strategic Tools

This report provides a comprehensive analysis of Yorkshire Bank's business environment. It begins with an overview of different organizational types, their sizes, scopes, and legal structures, using examples like Marks and Spencer plc and British Business Bank. The report then delves into the organizational structure of Marks and Spencer plc, examining the interrelationships between various departments such as Human Resources, IT, Marketing, and Finance. A key component of the report is the application of strategic tools, including PESTLE and SWOT analyses, to evaluate the external and internal factors impacting Yorkshire Bank's performance. The PESTLE analysis explores political, economic, social, technological, legal, and environmental factors, while the SWOT analysis examines strengths, weaknesses, opportunities, and threats. The report concludes by explaining the interrelationship between macro and micro factors affecting Yorkshire Bank and their impact on the organization.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Explaining different type of organisation with their size, scope, legal structure and
organisation.................................................................................................................................1
TASK 2............................................................................................................................................4
Analysis of organisational structure and interrelationship of its various departments function. 4
TASK 3............................................................................................................................................7
PESTLE analysis of YORKSHIRE bank with its evaluation of its impact on organisation
performance.................................................................................................................................7
TASK 4..........................................................................................................................................10
SWOT analysis of YORKSHIRE bank and their relationship with macro environmental
factors........................................................................................................................................10
Explaining the interrelationship between macro and micro factors that are impacting on
YORKSHIRE bank...................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business Environment can be termed as the individuals, institution and ll other factors
that can affect or control the business entity. It assist in increasing profit maximization of the
business. There are numerous factors which assist in constituting the business environment of a
business which affects its operation and decision making process. It can be said that internal
factors of business environment are controllable, whereas external environment are
uncontrollable. The present report will assist in analysing the factors of business environment
which can affect the performance and overall profitability and growth of a business enterprise.
The report is based on YORKSHIRE bank which is one of the UK leading private sector bank.
Report will help in analysing different type, size and scope of organisation with different
example. The interrelationship of various functions within YORKSHIRE will be presented with
its organisational structure. Further, the negative and positive impact of external environment
will be analysed with effective strategic tool. Later on, the internal analysis will be done using
SWOT analysis tool.
TASK 1
Explaining different type of organisation with their size, scope, legal structure and organisation.
There are various type and size of organisation which varies as per their business
operation and business objective. YORKSHIRE bank's client can be of different organisation
type. Below are different type organisation and their differences on the basis of size, scope and
legal structure:
Private organisation: this type of company are privately held by the an individual, group of
companies or certain group of organisation. Most of the private sector organisation are run with
the intention of making profit. Most of the business under private sector are including in selling
of goods or services to customer (Wellin, 2016). The main sources from where private
companies can raise funds is bank loan, personal savings, retaining profit and issuing their shares
and debenture in financial market. For example Marks and Spencer plc, it is a major
multinational retailer company based in UK.
Advantage of private company:
 It is a legal company which is registered in company act, which Added credibility. This
creditworthiness help in raise fund from capital and money market.
1

 On of the main advantage of private company is that it will continue to survive, even if its
owner die or dissolve due to any reasons (Craig and Campbell, 2012).
Disadvantage of private company:
 Private business entities has to pay certain annual fees, which enhances the obligation
burden in case of bad profits.
 The process to register the company is quite consuming and will require employees with
better law practices and knowledge.
 The procedure to wind up the company is quite complicated and is very costly also.
Public Organisation: This type of organisation are owned and governed by the government of
a country and established with an objective to provide services to the its citizen and entire
society. They are not intended just to make profit, but they create some profit in order to rum
their operational activities of the company (Goffee and Scase, 2015). Their main purpose is to
enhance the economy, generate employments opportunity, maintain infrastructure of country etc.
They are very essential in developing the economy of country. For example British Business
Bank, state-owned economic development bank which is established by UK government.
Advantage of Public company:
 Great opportunity for growth and expansion as it has government support and sound
financial position.
 Greater economies of scale can be achieved in public sector organisation.
 It can leads to protect the public interest and enhancing the economy of country.
Disadvantage of Public company:
 It is very difficult to manage and take meetings with different government official at the
same time.
 Such business more often leads to end up by producing low quality goods and services as
they have enough funds to survive and has limited or less competition (Waddell, 2017).
Voluntary organisation: This type or organisation are combination of different companies that
aims to provide benefit and welfare to the society. They do not intended to make profit, their
2

main purpose is to serve and enrich the human kind. Whatever profit they earned, they reinvest
this in order to expand their operations. There are very little or no interference from the
government. The main source of their earning is charity and donation from large companies or
from government also (Storey, 2016). Charitable trust, foundations , NGOs, and cooperatives are
some of the types of Voluntary organisation. Example of Voluntary organisation is British Red
Cross Society.
Advantage
 As it has volunteers in human capital and grants in material, organisation has low
operational cost.
Disadvantage
 It is difficult task to avail fund and volunteers to run business seamlessly.
Dimension Private Public Voluntary
Company M&S Plc is British
based multinational
retail sector company.
British Business Bank
plc (BBB) is a public
limited organisation
which is established by
the government of U.K
British Red Cross Society
is the UK body that helps
millions of people in UK
and all over world at the
time of crisis.
Size It is large multinational
company with around
84939 employees
working in 979 stores
across U.K.
It serves across UK
with its headquarter in
Sheffield (Combe,
2012). It has 11 board
of members.
It has more than 32500
volunteers and 3500 staffs
both in UK and overseas.
Scope M&S Ltd is now
operating at global level.
It can also expand its
operation to serve the
large scale and start-up
organisations also.
It has wide scope as it
operated in all over the
world.
Legal structure M&S plc is listed in BBB is controlled and BRS is governed by a
3

London stock exchange
and is constitute as
FTSE 100 index (Baker,
2018).
owned by Department
of business, Energy and
Industrial Strategy . It is
registered in England
and Whales.
board of Trustee, and is
registered charity
organisation.
Purpose To become a
sustainable,
international, multi-
channel retailers. To
maintain high level of
customer trust and
employee engagement.
To being a number of
government financial
schemes, advice
services to the small
and medium enterprises
in UK.
To assist the human kind
at the time when when
crises strikes. To be
neutral, independent and
impartial in providing
help and support to needy
people across the world.
Operations The main operations of
M&S plc includes
selling clothes, home
products and luxury food
products.
The bank controlled all
financial schemes and
co-investment funds
and the small firm loans
Guarantee (Roberts,
2018). The bank also
engaged in running the
assessment process in
order to select
Bizfitech, funding
Xchange.
It operates in all over the
world to help millions of
people in UK and across
the world at time of crisis.
TASK 2
Analysis of organisational structure and interrelationship of its various departments function.
Organisational structure of Marks and Spencer plc:
4

5

The organisational structure of Marks and Spencer plc is flatter structure. In this
structure, the middle-management levels and their function have been eliminated which assist the
employee to get directly in touch with the top-level management. Being a global level
organisation, eliminating the middle level management in M&S plc has assist in delegating more
responsibility on employees (Flatter Organizational Structure , 2019). The employees all over
various stores have to take their decisions regarding various functions and are accountable to
justify their action to top-level management.
There are various departments of Marks and Spencer plc which are interrelated to each
other and with the organisational objective of M&S plc. The board of directors of M&S pc is
responsible to make decisions for organisation as whole. They are the one who determines the
policies, procedures and business objectives that various departments and their employees has to
achieve through their performance and greater productivity. It can be said that there are
numerous departments in M&S that are coordinated across the world, each of this departments
set their own objectives which are interrelated to each other and to the objective of overall
organisational objectives.
As discussed above, the organisational objective of M&S plc is to build a sustainable
business through consistent, profitable growth and to be ensures in order to meet the
accountability to shareholders and all of its stakeholders (Pastuszak and et.al., 2012). The
different departments of M&S plc operated with their different objectives which ultimately aims
to meet the overall objectives.
Human Resource Department: It is one of the most important department, its main
function is to recruit, hire, provide training and manage the employees as per the need and
demand of the organisation. The main objective of HR department is to recruit the right person at
right time for the right job. Its function does interrelate with other department in order to
stimulate their requirement efficiently. Marketing department will make job description any
6

official they require. On the basis of that, HR department will communicate to financial
department as they would require funds from them. They may also requires IT department in
order to advertise the information regarding vacant job on IT platform.
Informational technology department: The main objective of IT department is to
enhance the communication process within organisation and to stakeholders, data processing and
assist the organisation to improve business process in cost effective manner (Hodson, Marvin
and Bulkeley, 2013). Functions of IT assist to the marketing department in promoting the
product and services as per their strategies, they help sales and marketing department in research
process and analysing the market trend.
Marketing department: Main objective of marketing department is to maximize the
sales of the company and increase the market share. They interrelate to finance department as
they need to be ensures that their activities would be as per the planned budget, and to
communicate to finance department in case of fund requirement. They have to make job
description with HR when they require new personal for their planned activity.
Financial Department: It is an integral p[art of the organisation that assist in allocating
funds to various department. Their main objective is to create budget as per the policies of
overall organisational policies (Ginzberg, 2017). The function of finance department interrelate
with other department as they have determine the need of different department on the basis of
which budget will be prepared and fund will be allocated to them.
TASK 3
PESTLE analysis of YORKSHIRE bank with its evaluation of its impact on organisation
performance.
PESTLE analysis is an strategic tool which will assist the YORKSHIRE bank to evaluate
the external factors which can affect its performance and profitability. This tool will help the
management in making strategies in order to overcome from the negative impact of these factors
and to utilise these factors to enhance the business performance. The PESTLE analysis of
Yorkshire bank are:
Political: This factors plays a significant role in the context of banking and financial
sectors. YORKSHIRE Bank has to face various government rules and regulations in country
which can affect their growth. Level of corruption, political stability, taxation are some other
7

political factors that affects YORKSHIRE banking operation (Asongu, 2014). It can be said that,
the level of interference of government in banking operations are very high. The current scenario
of Brexit in UK has affected the overall political as well as business uncertainty which creates a
political instability which affected the banking industry of UK. These political factors have both
negative as well as positive impact:
Positive:
It has been identified that, government has made several policies in order to raise the
banking services to strengthen the financial stability of country, after the referendum in 2016
(Song, Sun and Jin, 2017). However, the stable political environment and government policies
will help to support the financial operations of YORKSHIRE bank in UK.
Negative:
Brexit has affected the political laws and regulation of UK which leads to affected the
financial services and operations of YORKSHIRE bank. Increasing in taxes and regulations are
affecting the revenue and profitability of bank. Bank of England has full authority to control the
operation of banks and have imposed various restriction which has to be strictly followed by
banks in UK including YORKSHIRE bank. BOE has increases the surcharge on profit by 8%
that leads to reduces the profitability and growth of YORKSHIRE bank.
Economical: There are strong connection between baking sector and economic condition
of a country. Carnage in economic condition UK leads to affect the amount of capital that bank
can access. A growing economic condition will assist the effective operations of bank which
leads to the growth of demographic economy (Adu-Asare Idun and QQ Aboagye, 2014). The
economical factors includes the spending power of customer, inflation rate, exchange rate of
currency, the skill level of employees in country, business cycle stage etc. are economical factors
which can affect YORKSHIRE bank operations and profitability. These factors have both
positive as well as negative impact on the operations of YORKSHIRE bank:
Positive:
Increasing inflation rate in UK will impacts the bank to charge high interest rates which
helps them to earn more profit. Increasing in the employment rate will assist the bank to have
more skilled labour which will increase the productivity.
8

Negative:
the risk of post- Brexit has created the uncertain risk on the economic condition of UK.
This are creating challenges for the banking industry including YORKSHIRE bank. Declining
currency are affecting the FDI and other banking investment in different countries. The declining
economy of UK is directly affecting the profitability and growth of YORKSHIRE bank.
Social: Socio-cultural influence can also have a deep impact on the banking industry.
There are factors that includes change in people's lifestyles, social mobility, their buying and
spending habits, necessities and their needs to use the banking options such as taking loans
(Halik, 2012). These factors have great impact on the performance and profitably of
YORKSHIRE bank. Businesses whether small or big are opt for bank loan as first choice which
assist in increasing their revenue. These are the changing perception of people towards the
banking sectors which will impact the growth of YORKSHIRE bank. This factors has both
negative and positive impacts:
Positive:
The new generation are preferred using debit and credit card for making big or large
transactions, it assist the bank in increasing their revenue. Businesses in UK are also taking
access from banks and takes loans for their capital investment which is the main source of
earning for YORKSHIRE bank.
Negative:
Increase in technology helps consumers to buy products easier without taking assistance
from banks which affects its operations (Yüksel, Dinçer and Meral, 2019). Increasing in the
inflation rate has affects the spending power their requirement to take loans from bank. People
nowadays have less trust on banks thus they are opting for other opportunities in market which
are affecting the growth of YORKSHIRE bank.
Technological: The technological factors are very important which assist in making ease
of most of the banking operations. The adaptation of the new technological changes will assist in
growth of YORKSHIRE bank. The technological factors that needs to be considered by bank is
the adaptation of technology by competitors, impact on offering services, its impact on value
chain structure in sector etc. the positive and negative impact of technological factors are:
9

Positive:
YORKSHIRE has started new Information technology department responsible to make
software, technical solution, development of customer friendly user interface, design company
website, install and set up computer in bank, ensure smooth internet connection, repairing of
hardware and software. It will assist in increasing the operations and consumer services of
YORKSHIRE bank (Saeed, 2020). Use of internet has also increase the service offering to the
customers.
Negative:
Implementing technology in business operations will increase the cost burden of bank
which leads to minimize the revenue of bank. YORKSHIRE has to aware about the technology
that is being adapted by the competition which can affects its sales and profit.
Legal: there are different laws and legislation which are the factors that are affecting
operations and growth of YORKSHIRE bank. Legal risk are very high for YORKSHIRE as
Bank of England has strict laws and regulation which also leads to imposed fines and penalties
on fraudulent activities in financial services. The bank is also affected by several employment
laws are another legal factors. It can be said that Banks are the heavily regulated area where
compliances requires a lot of focus and spending (Bushe, 2019). Laws imposed to charge 8% on
profit of YORKSHIRE affecting the profitability and growth.
Environmental: Sustainability and environment friendliness is becoming an important
part of banking sector. It can be said that baking activities are hardly related to environmental
factors. Since there are some factors which can affect the YORKSHIRE growth. Increase in the
use of technology has results to reduce paper use. The use of mobile app and bank websites leads
to reduce the individual environmental footprints. The use of renewable electricity has to comply
by law which also impact the goodwill of YORKSHIRE bank.
TASK 4
SWOT analysis of YORKSHIRE bank and their relationship with macro environmental factors.
Swot analysis is an effective tool which assist in evaluating the company's own strength
and weaknesses as well as the opportunity and threat in business environment. It is a marketing
tool which helps in analysing various strategies through which YORKSHIRE can make effective
10