BUSINESS PERSPECTIVES AND METHODOLOGY

ASSIGNMENT

PESTEL ANALYSIS

It is a broad fact-finding activity around the external factors that could affect an
organisation’s decisions, helping it to maximise opportunities and minimise threats. It
audits six external influences on an organisation. By analysing those factors,
organisations can assess any risks specific to their industry and organisation, and
make informed decisions. It can also highlight the potential for additional costs, and
prompt further research to be built into future plans.

PESTEL stands for:

➔ Political: Tax policy; environmental regulations; trade restrictions and reform;

tariffs; political stability

➔ Economic: Economic growth/decline; interest, exchange, inflation and wage

rates; minimum wage; working hours; unemployment (local and national);
credit availability; cost of living

➔ Sociological: Cultural norms and expectations; health consciousness;

population growth rates; age distribution; career attitudes; health and safety

➔ Technological: New technologies are continually emerging (for example, in

the fields of robotics and artificial intelligence), and the rate of change itself is
increasing. How will this affect the organisation’s products or services?

➔ Environmental: Global warming and the increased need to switch to

sustainable resources; ethical sourcing (both locally and nationally), including
supply chain intelligence. Pandemics and other emergencies.

➔ Legal: Changes to legislation impacting employment, access to materials,

quotas, resources, imports/exports, and taxation
 STATE BANK OF INDIA [SBI]

State Bank Of India (SBI) is an Indian multinational, financial statutory body

and a public sector bank. It is headquartered in Mumbai, Maharashtra. It is a
nationalised bank and the largest bank in India with a 23% market share by
assets and a 25%share of the total loan and deposits market.
State Bank Of India’s Unique Selling Proposition or USP lies in its being the
biggest nationalised bank in India and the owner of one of the largest banking
networks in the world.

PESTEL ANALYSIS OF SBI

POLITICAL FACTORS

Tax policy
➔ Favourable tax policies allow businesses like the State Bank of India to
expand easily
➔ Government subsidies and favourable tax rates will also allow the State
Bank of India to maintain competitiveness by controlling its costs of
doing business
➔ Costs of doing business, in turn, will also not be passed on to the
consumers – thereby allowing consumers to enjoy favourable and
competitive pricing
➔ Desirable tax policies that support business growth and development
will allow businesses like State Bank of India to expand, and thereby
add to creating economic value for the country as well

Government stability
➔ The strong political structures and institutions support the growth and
development of the State Bank of India
➔ Government stability also allows businesses like the State Bank of India
to expand regionally as well as internationally
 ➔ Trade relations with other countries because of political stability and
strength allow businesses like the State Bank of India to maintain
offshore business affiliations easily and smoothly
➔ Government stability also attracts investors for businesses and
companies such as the State Bank of India – which leads to growth and
development in the infrastructure as well as enhances international
image
➔ High government stability can also attract resources for industrial
development as a whole, which in turn will boost player performance
and improve overall competitive positioning

ECONOMIC FACTORS

Inflation rate
➔ A moderate inflation rate is needed in the economy for companies like
the State Bank of India to flourish
➔ A moderate inflation rate will also help the business grow and work
positively towards increasing consumer confidence and consumer
spending trends
➔ As a result, the economy will get a boost and the overall disposable
income will also increase
➔ A higher inflation rate would lead to a lower disposable income, and
thus could lead to lower overall expansion, which could harm
businesses and companies, as well as lower consumer confidence
➔ A lower inflation rate will lead to a high increase in disposable income,
and thereby could increase competitiveness, especially through pricing
strategies which could lead to unethical price wars that take undue
advantage of the consumer.

Interest rate
➔ A moderate interest rate will help businesses and companies like the
State Bank of India in taking loans from the banks
➔ This business loan would be used for purposes of growth and
development
➔ Business loans would also help in the development and building if the
industry infrastructure at a large level
➔ Moderate interest rates would also allow individuals to take personal
loans.
 ➔ With lower to moderate interest rates, personal loans will translate into
higher purchases and consumption patterns by consumers. This in turn
would lead to a boost in sales, consumption and penetration of
businesses like the State Bank of India.

SOCIAL FACTORS

Demographics
➔ A higher portion of the younger population is beneficial for the State
Bank of India as it will allow the company a larger consumer population
base
➔ In addition, a younger population will also promise the State Bank of
India with more skilled and educated workers and human resources,
thereby adding breadth and depth to the talent pool
➔ A moderate to high middle class is also important for the State Bank of
India as its current consumers, and advocates
➔ This group acts as a brand ambassador for the State Bank of India and
encourages the younger population to become loyal customers as well

Education
➔ Higher education in the population is desirable for multiple reasons that
will benefit the State Bank of India
➔ Higher education means more talented, skilled, and knowledgeable
persons in the talent pool for the State Bank of India
➔ Higher education also means that the population s consumers will be
more aware of their purchases and consumption patterns
➔ As a result, they will focus on positive consumption which will give the
State Bank of India an advantage because of its unique competitive
positioning and placement
➔ A higher awareness level also means that consumers will prefer quality,
and will be knowledgeable of what the product promises and delivers.
This comparison will form the basis of repeat purchase
➔ Again, the State Bank of India will be at an advantage because of their
focus on quality.

TECHNOLOGICAL FACTORS

Technological infrastructure
➔ The country has a strong infrastructure with regard to technology
➔ There is a high rate of technological development and advancement
 ➔ Increasingly, businesses like the State Bank of India are incorporating
technological up-gradations and innovation to increase business
efficiency and affectivity
➔ There is a high rate of innovation across all industries, which makes
companies including State Bank of India competitive as well as
progressive
➔ The improved technological infrastructure also helps in attracting foreign
direct investment, which in turn leads to further development and
advancement
➔ The improved technological infrastructure also helps in attracting foreign
direct investment, which in turn leads to further development and
advancement
➔ As a result, the State Bank of India has a distinctive competitive
advantage in terms of technological advancements, and the business
continues to make use of, as well as participate in innovation processes
to enhance the business cycles and operations

Use of social media

➔ There is a higher portion in the population of youth, as well as middle
ages persons
➔ These population segments widely make use of social media for
connectivity
➔ Increasingly, social media is also being used by businesses like the
State Bank of India for gathering consumer data and information
➔ State Bank of India also interacts with, gathers feedback, and
communicates promotions to customers through official social media
channels
➔ Businesses like the State Bank of India have also started using social
media for purposes of recruitment, which highlights the changing trends
in the business community with respect to social media.

ENVIRONMENTAL FACTORS

Green consumption
➔ The increased awareness of environmental sustainability has also given
way to an increase in the green lifestyle
➔ Consumers in the country, and across all markets are increasingly
preferring products and services that are green i.e. produced and
marketed using environmentally friendly and sustainable ways and
methods
 ➔ Companies are also hopping on the bandwagon and introducing green
products to appeal to the consumers
➔ State Bank of India engages regularly in environmentally friendly CSR
activities.
➔ State Bank of India has also introduced a green product line – which is
a variation of its existing products. The company plans on increasing
the weightage of the green product line gradually to increase its role in
environmental sustainability.
➔ State Bank of India also contracts with suppliers and distributors in its
integrated back chain, who are following strong principles with regard to
environmental sustainability

Renewable energy investments

➔ The country as a whole it all its industries are gradually moving towards
the use of renewable energy for operations and business processes
➔ This is being done to reduce the environmental footprint of the market,
as well as for reducing the carbon effect
➔ State Bank of India and related industry members are increasingly
making use of solar energy, and hydroplanes for purposes of operation
management and business processes
➔ State Bank of India has a company-controlled hydro plant – on a small
scale – to help in manufacturing operations.

LEGAL FACTORS

Employment laws
➔ Country-wide regulations demand businesses to form legal contracts
pertaining to employment
➔ These contracts are authorized by respected governmental bodies and
involve all aspects of employment
➔ Employability contracts ensure a healthy relationship between all parties
involved and also ensure that there is no misunderstanding or colluding
➔ State Bank of India practices employment laws and briefs its employees
about the same during the recruitment process
➔ The HR department of the State Bank of India also regularly conducts
workshops and training sessions for employees to engage them, and
make them aware of the employment laws, along with other legal
formalities.
Anti-discrimination law
➔ The country and the market are made up of diverse population
➔ There is a high number of immigrants, and businesses from the country
also operate at multiple offshore locations
➔ State Bank of India, as a result, has always been comfortable with
diversity in its workforce and has framed internal company policies to
support diversity
➔ The company follows the anti-discrimination law in all its processes –
from recruitment to promotion
➔ All employees regularly undergo diversity training and workshops to be
able to avoid discriminatory and prejudiced actions – which could have
severe repercussions
➔ State Bank of India, like other players in the industry, is an
equal-opportunity employer
➔ State Bank of India also ensures that there is no discrimination within
the company and that the organizational culture remains toxic free
➔ State Bank of India ensures this by following regulations about the
anti-discrimination law as well as through regular investment in pieces
of training and employee development sessions