pest analysis

University Degree Business and Administrative studies

Using a LEPESTC analysis, undertake a detailed examination of the current nature of the business environment of a specific firm or industry.

Lloyds TSB Group is a leading UK based financial services group, offering a wide range of banking and financial services in UK and in some other overseas locations. The group is headquartered in Graham Street, London and employees 80,000 employees. The group recorded revenue of £19,673 million in the fiscal year ending December 2006, a decrease of 13.4 % over 2005. The net profit was £2,803 million in the fiscal year 2006 an increase of 12.4% over 2005.

The origin of Lloyds Bank, stretch back to 1765, when John Taylor and Sampson Lloyd set up a private banking business in Birmingham, England. Later in 1865, the partnership changed to a join stock company, naming itself Lloyds Banking Company Limited. Where as TSB has a long history, in 1810, the reverend Henry Duncan of Ruthwell set up a bank to help his poorest parishioners. It was such a popular scheme that by 1818 there were 465 saving banks in Britain.

In 1995, the merger between TSB and Lloyds Bank formed Lloyds TSB Group PLC. They were one of the largest forces in domestic banking. The TSB and Lloyds Bank branches were re branded in Lloyds TSB in June 1999.

LEPESTC analysis

Legal

The legal factor that Lloyds TSB has to undertake is keeping customer detail secure and up to date to comply with Data Protection Act. All the information LTSB hold are securely held in their system so that they and the other companies in their group that a customer or business are dealing with, present or in the future. Most of the information they held comes directly from the customers when they first open accounts or products with Lloyds TSB companies.

The information held by Lloyds TSB companies enables Lloyds TSB to run their customer accounts and the business accounts. For example, when customers talk to LTSB, they have better ideas about the product and services that could be interest to either customers or the business. Lloyds TSB also have to hold information about various laws and regulations; this also includes the strict anti-money laundering regulations. To protect their customers and in general and also to protect their own business from fraudsters and to manage risk that is particularly credit and insurance related risk across all the companies in their group. LTSB also keep essential information about customers and businesses, such as name and address, accurate and up to date for all the purposes.

If another company joins with Lloyds TSB in providing a service for the customers or businesses, or if LTSB introduce the customer or the business to another company they will let the customer or the business know in advance, about where and how the details will be used. LTSB will not disclose customer details unless it has been agreed with the customer. The credit reference agencies hold important information on individuals and businesses that help LTSB to check identity, credit status and to protect customers and their own business from financial crime. Of there is any potential fraud LTSB ...

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There are occasions when the law permits LTSB to make a disclosure to protect their own interest. Various authorities including the police, Inland Revenue, customs and excise, and benefit fraud investigators have the power to obtain information.

The Data Protection Act 1998 and similar laws set out important principles that LTSB must follow when handling personal data. The Data Protection Act gives the customer full right to ensure where their personal information will be used.

Economical

People in work have the money to buy goods and services. On the other hand, unemployment will reduce spending power. The average UK salary was £23,000 in 2007. As level of disposable income grows, the demand for consumer goods and services also increases. As talking about the current situation, UK is going through a worst economic situation. There are many job cuts by the businesses because of the credit crunch, which leaves them with zero disposable income. As people will have no disposable income, they will not take out loans or credit cards; there will be no business for LTSB.

Disposable income is not all about pay- it can be increased by borrowing. Retailers, manufactures and the banks have all gained from the boost in demand created by cheap credit. However, the level of personal debt has become a major problem in the UK and the citizen advice bureau dealt with 1.4 million debt problems in 2005.

As the interest rate increases the house prices will fall. People would not be able to pay mortgage and thus this result of people buying new mortgage will be less.

Environmental

The Lloyds TSB Group is a leading UK based financial services group whose businesses provide a comprehensive range of banking and financial services in the UK and overseas. Their potential impact on the environment stems from office based operations and to a large extent, this indicates where the bank can make progress in improving its environment performance.

The key areas where LTSB need to focus are property management, purchasing, contract and lending activity. According to my research LTSB are planning to improve on their environmental issues. They will minimise the amount of waste, they produce by raising staff awareness and encouraging the recycling of the office waste such as paper and plastic. LTSB will also comply with all the relevant environmental, health and safety regulations and legislation. They will also use wherever practicable, specify product from sustainable sources, products made from recycled materials or designed to be easy to re use or recycle. In order to be conscious of their environmental status they need to provide guideline to lending officials, which will help them identify environmental risks in the UK and abroad. They also need to cut the amount of energy they consume by continuing to use energy saving measure and by following recognised guideline and code of practice in their property management.

In addition, Lloyds TSB have introduce internet banking to their customers which has cut down the use of paper to a large extend. Customers can view their statements they can undertake all the banking facilities, which they usually get in the branch.

Social

The enlargement of the European Union has continued the trend for immigrants to seek a home and employment in the UK. The resulting mix of cultures provides opportunities for businesses to provide a wide variety of goods and services.

Lloyds TSB has introduced Shariah Banking, which provide banking facilities to Muslim customers. Customers will not invest in products deemed to be unethical and will operate without the use of interest. Rather then lending money, the bank will buy an item and then sell or lease it to the customer.

Lloyds TSB is also one of the first official partners of the London 2012 Olympics and Para Olympic games. The vision of LTSB is “to inspire and support young people, communities and businesses all over the Britain on their journey to the 2012 Olympics and Para Olympic games.

Lloyds TSB want to give all their customers—personal, business pr corporate customers, the opportunity to be part of 2012 Olympics and to be inspired by how they bring the values of 2012 London Olympics for life.

The Lloyds TSB foundations have made grants totalling over £300 million to grass roots charities throughout the UK and LTSB partnership with 2012 Olympics will complement their existing community based corporate social responsibility programme.

Technological

Lloyds TSB have almost 63, 000 employees, a presence in 30 different countries, over 2000 branches and 4,200 cash machines. Its not surprising that information technology is the nerve centre of LTSB with crucial IT function ranging from enabling and supporting cashpoints withdrawal to developing the IT infrastructure to support call centre. They are constantly evolving and improving their systems to keep them competitive with others. They also want to make sure that every one of their customers has access to their services wherever in either the world that on the internet, via their call centres or their latest new mobile services.

Competition

Lloyds TSB is a major banking and insurance group, predominantly UK -based, with operations in 30 countries. At the end of 2006, they were Europe's 13th largest bank in terms of market capitalization.

They have over 63,000 employees worldwide serving some 16 million customers. Their operation in the UK serves both urban and rural communities through a network of over 2,000 branches, coupled with Internet and telephone banking services. Their subsidiaries include Cheltenham & Gloucester and Scottish Widows.

Their vision is to make Lloyds TSB the best financial services company, firstly in the UK, and then in other markets. They will develop their relationship management skills in each of their businesses, so they better understand and meet their customers' needs, and create more value for them than the competitors can. This means providing highly competitive products and superior customer service including their basic bank account.

Lloyds TSB main competitors are HSBC PLC, Barclays, Royal Bank of Scotland.

Conclusion

A LEPESTC is crucial for any firm or organisation especially for a firm like Lloyds TSB. One of their growing concerns is the current economic position of UK as the country is heading towards recession this could be a threat for LTSB. Their competition would also have this as one of their main objective and the law is making this one of their objective as with the recent rejection with the merger of LTSB with HBOS. However, these analyses can be used in any environment at any time.

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