Section 1: The following study will focus on the UK Retail Banking Operation of Lloyds TSB Group Plc: Lloyds TSB Bank (LTSB). Over the last 25 years companies operating within the retail banking environment have experienced much instability and fluctuation. Preston & Hayward are particularly salient in their remarks: 'Retail banks have moved from operating within a static, largely closed operating environment, to conducting business within a highly open, turbulent and competitive environment.' (1999)
Using an adapted version of PESTEL (Johnson et al, 2006, p68); we can identify several macro-environmental influences and in-turn identify the Key Drivers of Change (KDCs) that impact upon the LTSB.
From a political and economic standpoint; further deregulation of the banking industry is a significant factor determining the future success of LTSB. The government's encouragement of competitive practise in the industry has historically led to deregulation and consequently resulted in a heightened state of competition.
Conversely, due to continual reports of, almost industry-wide, unethical sales practise; additional internal industry regulations have been introduced via the Financial Services Authority (FSA).
Retail banks exist to service the needs of society (Trethowan & Scullion, 1997) and hence the changing population demographics and UK's affair with consumerism display significant forces upon LTSB. Banking services are predominantly tailored to meet 'life-events' and hence an aging and growing population will require differing products as their lives progress. Additionally, heightened consumer awareness and attitude to credit usage has provided both benefits in terms of growth, and challenges regarding an increased level of competition between financial services providers.
Consequently, when viewing the retail 'arm' of The LTSB Group as a strategic business unit we can see that there is almost a seamless connection between the main macro-environmental forces effecting LTSB and the competitive forces in the industry (Johnson et al,