Micro and Macro Environment Analysis of Small Investment Bank - Qatar First Bank

Small investment banks are the banks, which operate in a smaller level than the multinational full-fledged banks that are much bigger in scale in terms of financial transactions (Stowell 2017). These banks are specialized in one or two facets of investment. The process is to manage wealth of clients and provide financial assistants to small players in the market. These institutions also invest in profit making companies to create wealth and grow in terms of scale and operations. Small investment banks largely work on smaller arrangements including mid market organizations, and as a rule help on the offer side in mergers and acquisitions exchanges. Also, they some of the time work in specific enterprises, for example, media, medicinal services, industrials, innovation or vitality. A few banks may represent considerable authority in specific sorts of exchanges, for example, capital raising or mergers and acquisitions, or rebuilding and rearrangement (Hakenes et al. 2014).

A market analyst’s main activity is to ponder data to enable the employer or customer to settle on educated choices about their market. This could go from what markets to dispatch an item in, to the value one may charge for something. The data analysis of a market analyst could be introduced as numbers or words. Factual aptitudes are helpful – maths and examination capabilities are additionally qualities of a market analyst.

The small investment bank in which the appointment as market analyst has been achieved is Qatar First Bank. The bank mentioned was launched in 2009 when there was recession in the western world (Al Marri 2018). However, because of rich natural resources and never ending demand of oil throughout the world, the Middle Eastern countries did not face any tough time (Niblock 2015). Many of the stakeholders and investors in the bank were having great suspicion in their mind about success of the bank. In spite of such suspicion and doubt the bank came out to be successful, and today it is engaged in offering international standard Shari'ah agreeable “wealth management” techniques to people who are affluent in Qatar and the locale. A bank that would benefit from the developing interest for Islamic banking and be one stop solution in monetary accomplice to the youth as well as business visionaries, in the safeguarding and development of their riches (Al Marri 2018).

The internationally operating organization, which is chosen for an investment opportunity from the small investment bank, is Apple, which is one of the most successful brands in operation throughout the world (Thaon and Tsanthaiwo 2017). The company manufactures mobile phones, laptops, and desktops. The company is the manufacturer of the famous i-phone.

A Review of the Techniques

Micro Environment

 Micro environment is the internal environment of a business. The micro environmental condition, as can be understood from the name itself, is the immediate and immediate condition which affects a business organization. The “micro environment” incorporates thoughts identified with providers, clients and nearby partners, along with the factors that are internal to the business (Epstein and Buhovac 2014). The “micro environment” condition can for the most part be viewed as the immediate situations of the business and the owner is expected to give some amount of thought to the impacts of the micro environment on business (Sekaran and Bougie 2016). The technique that is used in analyzing the micro environment of a business is called “SWOT analysis”, or the “Strength, Weakness, Opportunity, Threat, analysis” (Grant 2016).

Swot Analysis

Organizations use this tool to find out the strength & weakness they possess, and opportunities & threats that may come across (Drucker 2017). The main benefit of this system lies in the fact that it requires very less investment to be conducted. Even small businesses can undertake and go ahead with SWOT analysis of their businesses. SWOT analysis helps in comprehending ones business in a better way, and tackling the weaknesses so that they get resolved (Sekaran and Bougie 2016). Threats are averted from getting critical by prior predictions. The opportunities are understood and they are sharpened to give better results. Knowing the strength of oneself better gives extra confidence to go ahead. The whole process gives a direction to the business and anchors it.

Apart from the number of benefits SWOT analysis has, it has some limitations and disadvantages as well. This is not a very intricate process and remains mostly in the superficial level. For situations and problems, which are, complicated further researches which are deeper and in-depth needs to be done (Storey 2016). The process often does not categorize issues according to priority. It offers lesser amount of solutions than required. It is a process, which produces a lot of information and ideation, but not all are very useful.

This is a suitable method for deciding on the inner environment of a business because of its wide span of compatibility with any kind of business possible.

Macro Environment

Macro environment is the external environment of a business on which the decision makers of the business has no role-play in (Armstrong et al. 201'5.) These are the large scale factors which are uncontrollable and cannot be influenced by the inner players of the business environment. These factors impact the decision making of the organizations and positively or negatively impact the performance and business activities of an organization. Macro environment can be analyzed by PESTLE technique, which has full form of “Political, Economic, Social, Technological, Legal, and Environmental factors” (Feys and Probert 2015).

Micro Environment

Pestle Analysis

All the factors considered in the PESTLE analysis are external to the business and doesn’t have a scope of direct control by the business authorities. However proper PESTLE analysis would give a clear picture of what can be the scenarios that are forthcoming and the management can necessary steps and actions to keep the business stable after such analysis (Aithal 2016). The first advantage of the process is its cost effectiveness. It does not require any special mechanism and only some investment of comprehension from experts. The analysis gives a deeper understanding of the situation and the external environment and the possible impacts they can pose on the business. The political interference and governmental decisions which impact businesses cannot be changed or altered by the businessmen, they can adapt their own business according to the new scenarios (Walker and Rea 2014). It is the same case with other factors of PESTLE technique.

Micro

STRENGTH- Apple is the leader in its field and the company which continuously innovates new products and brings new technological up gradation to its existing products. Because of these reasons, Apple products are always in demand and there is no fear of loss in investing in the company (Heracleous 2013). The profit margins of Apple Inc are stable and high, and the investors can depend on the goodwill of the company (Khan, Alam and Alam 2015). Apple enjoys high level of trust and reputation in the market it operates in.

WEAKNESSES- Apple is greatly dependant on iPhones for maintaining its goodwill and revenue. In overall scenario, Apple deals with very less number of products, which makes it dependant on their success (Khan, Alam and Alam 2015). Every year, updated version of iPhone is released and avid iPhone users wait for new iPhones to get released (Dong and Zhang 2016). However the updates are not always well received. The Apple products are most of the time not compatible with products of other companies, which makes them lesser popular.

OPPORTUNITIES- Apple has a huge manufacturing infrastructure, which is highly advanced and technologically ahead of many of its competitors. The company is ever expanding its distribution network, however presently its distribution network is one of the strongest in the industry (Fitzgerald and Wakabayashi 2014).

THREATS- The field in which Apple operates in have stiff competition from various quarters. Microsoft is its competitor in desktop and operating system business. Samsung is a close competition in the business of mobile handsets. Samsung and Google have collaborated in providing service which is a great competition to Apple.

SWOT Analysis

Macro

POLITICAL- Apple is largely reliant on the manufacturing units at China. China is a country, which is dominated by Communist political ideology, which is often dominated by anti capitalist movements. In America, with recent political developments, there is a clamor about discontinuing outsourcing of jobs and manufacturing from the country. Apple works in a number of countries, which are not politically stable, which could make the future of business of Apple unsure in these countries.

ECONOMIC- As it has been pointed out previously that Apple’s manufacturing units are based mainly in China, but with increasing labor cost in China economical thrust is felt in the pricing of Apple products as well. The economic recessions in various countries throughout the world has reduced income of many people, which has affected the consumer base Apple.

SOCIAL- Socially Apple as a brand is seen to be a status symbol in the western world. However in African countries or in the countries where the goodwill and market of Apple is not well established it can be seen as a product with too high price and hence abandoned. A large section of people in North America cannot except China as a friendly country which can hamper goodwill of Apple because of its close association with the country.

TECHNOLOGICAL- Google, Microsoft, Dell, Samsung, HP, and a number of companies are doing regular advancement in their technological sphere. Apple is doing its own bit in technologically upgrading its product, but many of its recent innovations are criticized like the wireless earphones, which has a high probability of getting lost.

LEGAL- Apple has recently ventured into advanced digital financial services called the Apple Pay. This brings further financial regulations and implications to Apple throughout the globe. Dependency of Apple on intellectual products for its income like music and software make Apple furthermore vulnerable to legalities.

ENVIRONMENTAL- China is a country that is tackling environmental pollution. Apple’s manufacturing units have a high amount of disposed wastages, which is posing increasing concern in the country.

Apple deals in electronic goods and gadgets especially phones, laptops and computers.  With increased globalization and digitization, every individual is opting for better gadgetry support. Apple has been one of the pioneers in bringing technology at its best to the consumers. Steve Jobs, Steve Wozniak and Ronald Wayne established Apple Computer Company on April 1, 1976. The organization's first item was the Apple I, a PC built by Wozniak without any assistance from anyone else. The company has stiff competitors working in similar field, many of the collaborating with each other. Microsoft, which is probably the greatest competitor of Apple, was found just a year before, in 1975 by Bill gates and Paul Allen. Apple has its own operating system for desktop, which is having a huge competition from Microsoft Windows. Apple presently has 12.37% market share on the market of Operating System, and Windows has 11.79% (Gartner.com  2015). Samsung and Apple have collaborated to take a market share of 54.16%, which is largest (Gartner.com, 2018). Therefore, Apple works in an international business environment, which is full of competition and requires continuous innovative advancements. Coming in of new players with lower rates, and existing players increasing their innovative quotient has a great impact on Apple’s business.

Macro Environment

Globalization and innovation have both astoundingly affected organizations in many ways. Globalization alludes to growing a business to work at the worldwide level. This is frequently made conceivable because of the propelled innovations being declared each day. From multiple points of view, globalization and mechanical advances have enhanced business; however, there are likewise negative impacts. Globalization has helped Apple is marketing and distributing its product throughput the world. Apple has a vast chain of stores and retail outlets in all the big cities throughout the world. This was made possible by economic globalization and foreign direct investment opportunities. Apple has been a forerunner in importing and exporting activities and outsourcing various jobs in the Asian job market. Apple has more than 450 retail shops in 13 countries. The marketing of its initial successful product mainly depended on the foreign job markets. Apple has been mainly operating its manufacturing units at China. Globalization of culture has created a fetishism of Apple brand, which further boosted its sales.

There are various positive and negative impacts of globalization on business organizations working multi-nationally. The target markets have expanded and there are more number of customers. Resources have become cheaper and easily available and western countries can utilize the cheap labor pool in the developing nations (Crane and Matten 2016.). The information and technology sector have received a great boost because of globalization. Exchange of technological knowhow and knowledge, which help the developing countries, in advancing their work culture, is also an effect of globalization. However in spite of all of these positive aspects there are some factors, which may pose a challenge to businesses, like increased competition and legalities. Globalization has increased competition in every field, with new players from many countries operating worldwide. Companies, which work on a multi-national level, have to tackle legal issues from a number of countries.

Large multinational organizations require a hierarchical framework that can support the standard business operations and capacities like – “finance, advertising, R&D, production”, and among others - and those capabilities required for being result oriented past the domestic scenario. The suitable authoritative structure that is most suitable will be managed by the general global policy of the company, the comparative size of global or international operations when contrasted and compared with residential capacity and operations, and the nature of the commercial center in which the company contends. The four necessary hierarchical structures are- “Functional, Geographical, International and Matrix.” Some of the MNC’s structure their organization functionally, where all the important jobs are done at the headquarters at the home country. Geographically some MNCs design their structure where semi-independent functions with certain authorities are established in different countries. The MNCs, which have a International Division structure, they are allowed to keep close attention on its own domestic or home market in its head quarters while leaving the global division allowed to adjust and deal with the remote markets. A Matrix structure joins the effectiveness of the functional organization with the adaptability of local operations.

PESTLE Analysis

Conclusion

As the market analyst of a small investment bank, it can be safely concluded that Apple is a great company with high returns to invest in. It has a great hold on the market it works in and gives high returns to its investors. Analyzing the micro and macro business environment of Apple and the globalised scenario it would be highly advisable to invest in Apple for great returns.

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