Introduction
Goldman Sachs is one of the most successful financial organizations in the US and the international economy. The company has been in business for more than 152 years and is a dominant player in the economy (Goldman, 2022). This has been attributed to the marketing context of the firm, which comprises the internal factors that affect its capacity for sustainability. Moreover, the primary environmental factors confer distinctive characteristics on a firm, allowing it to tackle the difficulties posed by the market. Additionally, such models connect the organization and its targeted potential clients.
On the same note, the PESTEL factors are primarily accountable for the years of prosperity this business has enjoyed. Nonetheless, the executives at Goldman Sachs can be credited with adequately instilling core competency aspects. In this way, the firm has been able to subjugate and drive out of the economy its market competitors, such as Lehman Brothers, due to imperfect competition (Stowell & Meagher, 2017). At the same time, the bank has employed vital trending techniques that have made operations feasible. Overall, financial entities’ robustness in implementing key elements that reflect their strategic plans is the key to their achievements; hence a failure or a fracture in such systems process will ultimately lead to the collapse of such business.
Chief Environmental Factors
Competition
The competition variable is a fundamental aspect of an organization that necessitates producing exemplary services. Thence, a company’s market competitiveness is often dictated by entry into market players and new products. For example, competition has ensured the firm’s internal growth, which has been attributed to the relentless nature of organizations to provide the customer with exquisite services compared to those of rivals (Khattak & Saiti, 2020). Thus, Goldman Sachs being adamant about satisfying their loyal client’s needs, bolster them to push for the provision of impeccable product and services. In this regard, Goldman Sachs has revitalized operations in its daily activities in a bid to attract and maintain its loyal consumers; hence, it accentuates a competitive edge.
As a result, the variable has drilled a core competency in Goldman Sachs, which entails acquiring and retaining skilled talent that has fueled the firm’s success. For the firm to get a competitive advantage over its market competitors, this company further employs talent management as a crucial instrument (Hongal & Kinange, 2020). This company’s upper management is aware that the only way to handle the fierce rivalry in this field is to have a staff of professionally talented, creative, and inventive workers. To do this, the company has fostered an atmosphere where its workers may provide innovative solutions to their jobs and any future issues they may face. Its competitive compensation packages and other non-financial advantages have contributed to the retention of its highly skilled staff.
To add, Goldman Sachs has incorporated another core competency in adaptability. This element is another fundamental skill this company has utilized to surpass all other companies in its field. Since its founding, Goldman Sachs has encountered significant environmental difficulties and developments that have compelled it to adopt new processes and procedures (Urban et al., 2021). During its establishment, contemporary computer technology had not yet been developed. Thus, to manage customer data, the company used tangible documents and files. Goldman Sachs was one of the first companies to use IBM computer systems for data storage (Urban et al., 2021). It recognized that modern computer technology was crucial to its commercial success. As time passed, the internet arose, and technology continued to transform the financial industry’s processes. In addition, when online banking appeared, this firm was one of the banking firms that welcomed this new offering as a method of gaining more consumers and making financial transactions easier.
Further, digital banking was especially significant for this organization since it permitted its clients to manage their bank accounts regardless of location. It branded its internet banking GS Bank primarily aimed at consumers in North America. It is crucial to highlight that other corporations offer comparable items in the economy, but not in the way that Goldman Sachs did. The unusual part about this business is that it is swift in accepting newer innovations and knows how to surmount obstacles that early adopters sometimes confront while employing the latest technology (Urban et al., 2021). It has produced a team of dedicated and productive personnel that is flexible and accepts change. It illustrates why this organization generally adjusts to changes easily and without any pushback from its personnel.
General Public
Businesses often place a premium on their public image when introducing a new product, establishing a brand, or celebrating a commercial landmark. The public is a vital component of marketing and thus plays a crucial role in brand management throughout the lifespan of a business (Factors That Influence Public Policy, 2022). Goldman Sachs’s brand represents its culture, vision, and initial image to the outside world. For example, a ruined reputation in one of its product services will equal considerable losses. Therefore, such scenarios inextricably link to how consumers perceive the firm and may affect overall sales. Thus, Goldman Sachs’s positive image to customers is a marketing adjunct that adds depth to its brand and works in tandem with marketing to communicate a message. For instance, the general public may boost a firm’s reputation since the material is more reliable and informative. Public perception has improved consumer consciousness and credibility compared to advertising merely seen as advertising.
Importantly, to drive the organization effortlessly, Goldman Sachs has included effective communication as a primary competency to boost rapport in and outside the organization. According to Nwabueze & Mileski (2018), communication is one of the most significant determinants of a company’s capacity to succeed in an extremely dynamic market. Depending on the company’s adopted culture, it employs a unique set of communication techniques. Goldman Sachs employs an open strategy where workers can contact senior management freely. An open approach is one of the most efficient methods of communication for fostering contact between senior management, lower-level staff members, and consumers. Equally, the organization has placed suggestions on its social media pages to communicate with its clients.
Furthermore, another core competency the firm has encouraged is collaboration between the firm’s stakeholders and the public. Goldman Sachs emphasizes cooperation as one of its most significant core strengths. A company that supports cooperation can succeed because its personnel prefers functioning as a team to just accomplishing their assigned tasks (Jones et al., 2017). Workers will be eager to assist coworkers in completing challenging jobs. In such circumstances, staff will indeed appreciate healthy rivalry across sections. Every department at Goldman Sachs regards its workers as members of a stronger team. Furthermore, each team member is accountable for whatever occurs inside their department.
Goldman Sachs PESTLE Framework
Political
Political Stability
Political stability is essential for businesses because it affects consumer and investor loyalty and thus has a significant effect on the economy. Investment, Consumption, and economic growth are adversely affected by significant levels of political instability (Murad & Alshyab, 2019). Following internal and foreign conflicts, the Middle East region, where Goldman Sachs Group has been aggressively involved, is now suffering political instability. However, the firm’s capacity to comprehend and manage the current political upheaval has ensured it attains its growth ambitions, and executives will not hesitate to commit additional cash.
Economic
Demand and Labour Supply
The success of Goldman Sachs Group primarily relies on its personnel’s talents and abilities. The prompt accessibility of competent labor is essential for Goldman Sachs Group to maintain a competitive advantage. Therefore, the firm has studied the labor demand and supply patterns to effectively hire people with the needed set of skills. Nevertheless, a restrictive labor market with influential labor unions has provided the firm with several challenges. For example, it has pressured the Goldman Sachs Group to offer an unjust salary increase or stop production by issuing a boycott. Therefore, it is essential to evaluate the labor market dynamics, foresee significant trends, and change talent management tactics appropriately.
Social
Consumption Conduct
The relationship between consumer behavior and economic circumstances is substantial. This is because contemporary customers have become more demanding. Thence, when consumers have more disposable revenue and are prepared to purchase more services and goods to enhance their living. Because it has become easier to introduce innovative goods to these clients, income productivity prospects stay high. Hence, Goldman Sachs Group has closely reviewed its spending tendencies to alter its marketing mix plans. The business entity has also determined if the expenditure is motivated by utilitarian incentives since ethnocentrism is a significant consumer behavior characteristic that has positively impacted the Goldman Sachs Group’s success (Matovic, 2020). Thus, it has created descriptive design opportunities for growth for organizations
Technological
Technological Inventions
The pace and growth of technological advancement may impact the economy and industry as a whole. By analyzing upcoming innovation and technology patterns, Goldman Sachs Group can detect the pace of new product creation and the customers’ unique characteristics they most appreciate. Thus, the organization can learn if changing to e-commerce will be more profitable than building a physical store by studying customers’ sentiments toward upcoming innovative strategies. Similarly, Goldman Sachs Group is compelled to switch from manual to computerized operations if competitors invest in cost-saving automation technology
Environmental
Environmental Regulations
In many nations, strict environmental restrictions pressure businesses to prevent environmental damage. As a reaction, Goldman Sachs Group endorsed liable production procedures and promoted positive consumption methodologies among its prospective customers. Equally, the firm has attempted to enhance its label image on a resilient basis and achieve proper adherence to global and local environmental restrictions. The latter is done with apt since failure to do so may invite severe brand image critique from critical parties.
Legal
Employment Laws
Employment law is an overarching term that encompasses several laws safeguarding workers’ rights, such as fairness, tolerance, inclusivity, and health and safety. Thenceforth, the Goldman Sachs Group guarantees a safe place to work. There must be systems in place to prevent both indirect and direct prejudice. Proper adherence to personnel rules has assisted Goldman Sachs Group in enhancing its workplace brand image, which is crucial for recruiting and keeping top personnel in the current fight for workers.
Key Financial Trends for Goldman Sachs Group
Deregulation
The deregulation of financial markets, which included eradicating deposit account investment rates and the growth of financial institutions into equities reinsurance operations, has led to the establishment of new and expanded credit inputs. As a result, Goldman Sachs has begun utilizing it since it has caused a reduction in the discrepancies and volatility of the supply of credit, specifically the decimation of bank deposit interest rates (Goldman, 2022). In turn, this has previously decreased the unpredictability of business growth, leading to more extended periods of economic growth with more investment expenditure. In turn, it has resulted in higher capital raising in banking firms.
Consolidation
Recently record earnings thresholds have gained renowned fame. This is due to their capacity to supply assets to advance business strategy configurations, generating a considerable requirement for acquisitions and mergers. Goldman Sachs has begun consulting solutions, successive financing, modest growth, confined valuation versatility, and the need for scale economies, which have all contributed to a vast influx of possibilities for centralization in certain businesses (Goldman, 2022). In addition, the requirement for economies of scale has vastly increased the number of integration prospects in those industries.
Conclusion
Goldman Sachs is one of the most successful financial institutions internationally. This admirable accomplishment is a result of its internal environmental factors. As previously noted, organizations that compete depend heavily on their internal environment to gain a competitive edge over their market competitors. In addition, the company has avoided the insolvency that has plagued several businesses. This is due to the incorporation of core skills into Goldman’s operating models. The PESTEL framework research demonstrates that Goldman Sachs Group, Inc. controls external influences more effectively. Consequently, the company has adapted new banking trends to the growing technologies.
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