Business Bound in Macro-Enviro & Competitive Factors: An Overview - Essay Sample

Introduction

Even though business becomes autonomous due to their functioning and identity, they are bound in the same environment. As known, the atmosphere consists of two segments that exert forces on the long-term market and the activities conducted by the business (Korez-Vide & Tominc, 2016). The macro-environmental factors and competitive factors affect the strategies and performance of any organization. Such factors include. The factors include economic factors such as legal, social conditions, and demographics. The other factors also include natural forces and technological forces.

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Macro Environmental That Have an Impact Huntington Bank

The macro-environment is a broad context found in a company’s commercial operations. This element sheds more light on the overall market conditions such as culture, society, lifestyle, the kind and nature of people, economic status, the use and presence of technology, and the role of the government (Korez-Vide & Tominc, 2016). Such aspects usually elaborate more to the organizational heads the kind of environment they will thrive in when they think of offering their services to the public. Specific examples of macro settings include changes in interest rates, government regulations, unfavorable weather, and changes in cultural taste.

The interest rates level consists of the demand and supply of credit. Any increase in the market for credit or money will raise the interest rates and vise vasa. The interest rates are also known to affect the value of assets and loans, including retained interests such as the none-mortgage and mortgage service rights And securitizations. Huntington’s earning portions come from transactional income, such as real estate owned and sales of loans (D&B Hoovers, n.d). Therefore, any change in interest will harm the company.

The increase in interest rates also affects the customer’s ability to pay the principal on leases or loans. This may lead to the reduction of discount or increase in no-performing assets accreted into income. This may harm Huntington’s cash flow and operations (D&B Hoovers, n.d). The best way to avoid this is that the bank monitors the financial risk and sensitive position of the interest rates by establishing operating limits and policies

Competitive Factors That Have an Impact in Huntington Bank

Even though the term competitiveness is used in areas such as politics or economics, it lacks a standardized definition. The meaning of competitiveness varies depending on the perception and context. In businesses, competitiveness is the company’s ability to produce services and goods with a reasonable price ratio that has profit while fulfilling customer’s preferences over the market demand (Korez-Vide & Tominc, 2016). Competitiveness can be measured and built through various aspects such as human capital, relationship with customers, and innovation capacity.

The relationship with a customer is the ability to create and attract a long-lasting relationship with clients. Undoubtedly, this is the main qualities that define the competitive aspect of any organization. In consumer banking such as Huntington, they always seek to optimize their relationship with the commercial customer by not focusing on the acquisition but using a lifetime approach such as cross-selling, retention, and onboarding (D&B Hoovers, n.d).

The effect of this approach has made Huntington bank to grow its commercial relationship revenue. The percentage of clients has also increased significantly. The long-term perspective has also helped the bank elaborate more on why their yields are new, and yet their commercial remains low (D&B Hoovers, n.d). When the relationship with clients is right, then the number of those willing to do the business with the bank increases.

References

D&B Hoovers. (n.d.). Huntington Bank - Online Banking, Insurance, Investing ... Retrieved from https://www.huntington.com/

Korez-Vide, R., & Tominc, P. (2016). Competitiveness, Entrepreneurship and Economic Growth. Competitiveness of CEE Economies and Businesses, 25–44. doi: 10.1007/978-3-319-39654-5_2