2016 was a pivotal year for Barclays, embarking on one of its largest restructurings in history designed to make bank smaller, better capitalised, and less leveraged and more geographically anchored on its core UK and US geographic markets. The major decision to exit Africa is part of the mega restructuring. The bank had to contend with regulatory pressures as well as effects of Brexit as examples of some of the major external macro factors impacting their operational environment.
PESTLE is a business strategy tool used in strategy to analyse such macro environments and identify how future trends in the political, economic, social, technological, environmental and legal environments might impact individual organisations within an industry. Firms then study the key drivers of change behind the PESTEL factors. These key drivers of change constitute opportunities and threats in a firm’s external environment and industry which can be overcome by focussing on strengths and eliminating weaknesses. This is why PESTLE is only a starting point since other frameworks such as Porters Five Forces and SWOT have to be used in conjunction to help firms like Barclays utilise internal core competencies so as to take advantage of opportunities while neutralising threats in its industry.