Banking Sector Challenges in Research †Free Samples to Students

Question: Discuss about the Banking Sector Challenges in Research. Answer: Introduction In the recent complex comprehensive environment, it is a huge challenge for all the business organization to lay more emphasis on their strategic plan. The firms must have various analytical tools to identify all those factors that would affect the business environment. This essay acknowledges the value of strategic analytical tools in relation to the comprehensive analysis at the firm level, industry level and macro environment al level. PESTEL analysis framework Porter five forces model and SWOT analysis will be discussed to analyze the strategic direction of a firm in such comprehensive business environment (Albert and Grzeda 2015). PESTEL model is the strategic tool that is used to analyze the macro environment. It is one of the most popular and widely used concepts used in comprehensive and strategic analysis (Shah et al. 2015). The concept of PESTEL model originally came from the PEST model. It is a significant method that includes all the major factors, which is influenced by the organization and industry. Initially, the PEST framework encompasses the following four factors as Political, Economical, Social and Technological. Later on, the framework further considered other two vital factors, which are Environmental and Legal factors. Political factors include all the government regulation and policies of the retail industry that affects its profitability and revenue. Political environment affects supply chain of a business at an international level and also the economic environment of the nation. In the retail industry, political issues create a major hindrance to the existing smooth business operation. Economic factors are also crucial in relation to the business and trade. Better economic scenario showcases increase in sales and thus leads to complete and effective outcome in the retail industry (Goncharuk 2016). The labor market and consumers income creates a major impact on boosting the profit of the industry. Social factors also affect the profitability of the retail industry. Change in the preferences of the consumers and demographic changes creates a deep impact on the business. In the recent times, the demand of the new generation is very different than that from the older generations. Major focus is recently given on maintaining customers engagement and attention by the retailers. Technological factors in the current times are more crucial whether in terms of customer services, sales or supply chain. The latest advent of technology and rapid growth of digital technology has lead to increase in the number of competitors in the retail industry (Zhao, Pan and Chen 2018). Firms are trying to use better technology for maximizing customers satisfaction. Legal factors are also relevant for the retail industry. Various laws related to the employment and business affects the business of the organization to a large extent. To remain comprehensive in the business environment the organizations have to maintain quite low prices. Both Walmart and Amazon have to deal with fair share of Legal issues in the past. The six factors is highly powerful and useful tool that is widely applied in marketing planning, business planning, organizational change and product development. In business planning the PESTEL analysis provides important information related to target such as growth, brand positioning and new product development for the organization and managers. PESTEL analysis framework is used for comprehensive analysis at the macro environmental level (Jensenn 2016). SWOT Analysis SWOT analysis stands for the Strengths, Weaknesses, Opportunities and Threats and the model has also various applications in the real world. It is widely used to evaluate a product segment, business plan and marketing strategy. It is a powerful planning tool and is widely used in the marketing and business areas. Like any other businesses, the retail industry often analyzes the strength, weaknesses, opportunities and threats to gain comprehensive advantages in the market place. The strength and weaknesses of a firm are considered as an internal factor and the opportunities and threats are considered to be the external factor. These factors highlight both the positive and negative situations that the firm faces continuously. The strength of the retail sectors are generally access to bank loans and adequate capital. The purchasing power of the consumer is strength for the business. The weakness faced by the industry includes political uncertainty as well as regulatory requirements. Supply chain management and poor infrastructure also proves to be a major weakness of the organization (Arabzad et al. 2015). There are various opportunities for the retailers nowadays and the most significant of them is application of digital strategy. Application of digital strategy helps in improved interaction with the employees besides customer engagement. Whereas, the various threats that affects the organization or firms are availability of land, fierce competition, human capital management (Kangas et al. 2016). Threats often lead to reduce the consumers demand, price wars and recession. Even change in the shopping habits of the customers is also a major threat to the retailers. Porters five forces are used to determine the comprehensiveness of a given market and thus ascertaining how profitable it can finally be for a business. This strategic model focuses on five factors better known as five forces. These five forces include buyer power, supplier power, comprehensive rivalry, threats of new entrants and threats of substitutions (Borland et al. 2017). The bargaining ability of the buyers can push down the prices or switch retailers and even they would not buy the products. In the retail industry bargaining power of a buyer is a relatively larger force. The customers demand high quality products at low and affordable prices. The bargaining power of supplier is an insignificant force and has very little power. The suppliers have quite less or low control in the fashion industry. The bargaining power of buyer is moderate as the concentration and size of the major retailers (Wolf and Floyd 2017). In retail industry, to retain customers and reduce customers, the retailers seek to create strong brands and differentiate the products. Completion rivalry is very high in the retail industry as there are various competitors selling the similar products in the market. Brand recognition is used by the retailers to differentiate its products and maximize revenue. Threats of new entrants are another major factor that is faced by the industry. The retail industry is currently under the state of high risk and high reward for the new entrants (Gans and Ryall 2017). Threat of Substitution is the last factors of Porter five forces framework. In the retail industry, it is often seen that they do not specialize in a particular good or services but deals in variety of products and services. Retailers offer products that are unique and have an absolute or distinct advantage over its competitors. Conclusion The three powerful and commonly used comprehensive analysis and strategic tools has its own importance in getting a clear knowledge about the business environment. Through PESTEL analysis the market condition at macro-environmental has been ascertained. SWOT model helps in analyzing the business condition at the firm level of the retail industry. Both the internal and external analysis has been identified. While the Porter five forces model illustrated the different sources of comprehensive forces existing in the retail industry. Thus from the essay it has been ascertained from the porters model that in the retail sector the barriers to entry are relatively high. It is therefore significant for all the firms to lay more attention to its strategic plan. References: Albert, S. and Grzeda, M., 2015. Reflection in strategic management education.Journal of Management Education,39(5), pp.650-669. Arabzad, S.M., Ghorbani, M., Razmi, J. and Shirouyehzad, H., 2015. Employing fuzzy TOPSIS and SWOT for supplier selection and order allocation problem.The International Journal of Advanced Manufacturing Technology,76(5-8), pp.803-818. Bell, G.G. and Rochford, L., 2016. Rediscovering SWOTs integrative nature: A new understanding of an old framework.The International Journal of Management Education,14(3), pp.310-326. Borland, H., Ambrosini, V., Lindgreen, A. and Vanhamme, J., 2016. Building theory at the intersection of ecological sustainability and strategic management.Journal of Business Ethics,135(2), pp.293-307. Gans, J. and Ryall, M.D., 2017. Value capture theory: A strategic management review.Strategic Management Journal,38(1), pp.17-41. Goncharuk, A.G., 2016. Banking sector challenges in research.Journal of Applied Management and Investments,5(1), pp.34-39. Jensen, A.B., 2016. Business Modelling as aWay Forward for Strategic Management Processes-A Case Study of SMEs.Journal of Multi Business Model Innovation and Technology,4(1), pp.1-34. Kangas, J., Kajanus, M., Leskinen, P. and Kurttila, M., 2016. Incorporating MCDS and voting into SWOT: Basic idea and experiences.Serbian Journal of Management,11(1), pp.1-13. Lechner, C. and Gudmundsson, S.V., 2014. Entrepreneurial orientation, firm strategy and small firm performance.International Small Business Journal,32(1), pp.36-60. Shah, S.T.H., Jamil, R.A., Shah, T.A. and Kazmi, A., 2015. Critical Exploration of Prescriptive and Emergent approaches to Strategic management: A review paper.International Journal of Information, Business and Management,7(3), p.91. Wolf, C. and Floyd, S.W., 2017. Strategic planning research: Toward a theory-driven agenda.Journal of Management,43(6), pp.1754-1788. Zhao, X., Pan, W. and Chen, L., 2018. Disentangling the relationships between business model innovation for low or zero carbon buildings and its influencing factors using structural equation modelling.Journal of Cleaner Production