Barclays Strategicmanagement2(1)

BG95986 SIDDHANT DUTT

RISBT BUSINESS STRATEGY OF BARCLAYS 1


Name: Siddhant Dutt

Class: HND

ID : BG95986

Topic: Business Strategy of Barclays



ASSIGNMENT

UNIT Unit 7: Business StrategyLECTURER Ms Alankrita Bista VERIFIER Mr. AzamHAND OUT DATE SUBMISSION DATESTUDENT Siddhant Dutt TERM May 11

ASSINGMENT GUIDELINES

1. This Assignment is designed to help you achieve a Merit or Distinction. 2. During your Structured Individual Study (SIS), you are required to answer each question above

(Outcomes Assessment Criteria) which has been covered separately in respective Lessons.3. In your answer, write about the key concepts highlighted by the Lesson (underpinning

knowledge). 4. You can get an idea of the key concepts by referring to the Lesson’s handout, in the Overview

section of the Lesson.5. Look for real-life examples to apply your key concepts (applied knowledge).6. Make use of the SIS time to research books.7. During your SIS time, use the computer to research recommended websites and word process

your Assignment.8. Follow the guidelines given in your Handbook.9. Study the Merit and Distinction Descriptors below to ensure that your work demonstrates

compliance in order for it to be considered for their respective Awards.

It is important that the work you produce is carefully planned & written.Your work should demonstrate (a) your understanding of the theory you have learned (underpinning knowledge) and (b) your ability to apply it to real life/contemporary situations/case study (applied knowledge).

Please follow the instructions below:1. Start each answer from a new page2. Highlight each question clearly3. Avoid bullet points and restrict the use of numberings; remember that you are supposed to write

an essay. 4. All work should be comprehensively referenced and all sources must be acknowledged fully, this

includes books & journals used as well websites visited. Details such as page numbers, publishers and publication year should also be stated, in addition to the name of the author(s) and publication. Books, articles and journals should be the main sources; net sources are allowed up to 25% max.

5. Follow Harvard Referencing system.6. Ensure that your work is within the stated word limit.7. All work should be word-processed. 8. Pages should be numbered (bottom right hand corner)9. Assignment sheet should be attached in the front.10. Spell check the document and read thoroughly for grammatical errors.11. 1.5-line spacing is preferred but is not essential.12. Bibliography at the end of the assignment.

The correct format to answer each question (Task) is as follows:1. Introduction (analyse the question – which theory is it trying to ask you to demonstrate?)2. Underpinning Knowledge (write about the relevant theory/points)3. Applied Knowledge (apply the theory/points you have written about in your underpinning

knowledge to your case study/real life example)4. Conclusion (summarise what you have written in 2 & 3 above).



GRADE DESCRIPTORS

PASS DESCRIPTORS

(FROM Outcomes Assessment

Cri ter ia)

Learner’s Evidence Shows Tutor to

Check

1 Analyse how the businessenvironment is considered in strategy formulation

Define the contexts of business strategy

Conduct an environmental and organisational audit of a given organisation

Apply strategic positioning techniques to the analysis of a given organisation

2 Understand the process of strategic planning

Demonstrate an ability to think strategically

Prepare a strategic plan for a given organisation, based on previous analysis

3 Examine approaches to strategy evaluation and selection

Evaluate possible alternative strategies substantive growth, limited growth or retrenchment

Select an appropriate future strategy for a given organisation

4 Analyse how strategy implementation is realised

Compare the roles and responsibilities for strategy implementation in two different organisations

Identify and evaluate resource requirements to implement a new strategy for a given organisation

Propose targets and timescales for achievement in a given organisation to monitor a given strategy

MERIT DESCRIPTORS

Learner’s Evidence Shows COMMENTS/FEEDBACK

1 Identify and apply strategies to find appropriate solution

Relevant theories and techniques have been applied

Effective judgments have been made

Complex problems with more than one variable have been explored

An effective approach to study and research has been used.

2 Select/ design and apply appropriate methods/techniques

A range of sources of information used

The selection methods and techniques/sources justified

The design of methods/techniques justified

Complex information/data have been synthesized and processed.



MERIT DESCRIPTORS


Appropriate learning methods/techniques applied

3 Present and communicate appropriate findings

Appropriate structure and approach has been used

Logical and coherent arguments have been presented

Technical language accurately used

A range of methods of presentation has been used

Appropriate media used Familiar and unfamiliar contexts have been used

It is appropriate for familiar and unfamiliar audiences

DISTINCTION DESCRIPTORS


1 Use critical reflection to evaluate own work and justify valid conclusions

Synthesis has been used to generate and justify valid conclusions

The validity of results has been judged

Self criticism of approach has taken place

Evaluation has taken place using defined criteria

Realistic improvements have been proposed against characteristics for success

2 Take responsibility for managing and organizing activities

Autonomy/independence demonstrated

Substantial activities/projects have been planned, managed and organized

The unforeseen have been accommodated

The importance of interdependence has been recognized

3 Demonstrate convergent, lateral and creative thinking

Ideas generated and decisions taken Self evaluation has taken place

Convergent and lateral thinking have been applied

Problems have been solved Capacity for innovation and creative thought has been used

Receptiveness to new ideas have been demonstrated

Unfamiliar contexts have been applied



Any Other Comments

Grade Given by Tutor:

Tutor Signature:…………………Date:……….Pass Merit

Distinction

IV Grading Check :

IV Signature:……………… Date:…………..Agree Disagree MODIFY GRADE TO

Student’s Response:

Student Signature: Date:

Instructions-You are required to produce an academic report of 4000 words (+/- 10%) covering all the questions given below.

-You are required to follow the formal presentation format.

-You are required to reference sources by using Harvard Referencing Style.

-The college’s regulations concerning cheating, collusion and plagiarism apply to this assessment.

- This assignment must be completed individually, in print, and must be bound with front and back covers.

Questions

Select an organisation from the FTSE 100 and outline a strategic plan detailing the following strategic elements.

1. Outline your understanding of the organisation’s missions, visions, strategic intent, objectives, and stakeholder analysis.

2. Conduct an environmental and organisational audit of the organisation making use of PESTEL, Porter’s 5 forces; SWOT Analysis, Value Chain analysis etc. (use any 2 strategic audit models).



3. Based on the chosen organisation, analyse business portfolio by using any 2 strategic models e.g. .BCG Matrix, Ansoff’s matrix etc

4. Develop & evaluate possible alternative strategies for the organisation you have chosen.

5. Outline an implementation plan for the chosen strategies in question 4.



INDEXSr.No. TOPIC Pg.

No.

1.

Executive summary

Introduction to Barclays

1.1 Mission and Vision of Barclays

1.2 Barclays Strategic intent

1.3 Objectives of Barclays

1.4 Stakeholders of Barclays

10

11

13

16

17

18

2. 2.1 PESTLE OF BARCLAYS

2.1.1 Political analysis

2.1.2 Economic analysis

2.1.3 Social Analysis

2.1.4 Technological Analysis

2.2 Porter’s Five Forces

2.2.1 Entry Barriers

2.2.2 Rivalry among the existing competitors

2.2.3 Bargaining Power of suppliers

2.2.4 Bargaining Power of customers

2.2.5 Threats from substitutes

21

22

23

23

24

25

25

26

26

26

27

3. 3.1 BCG Matrix of Barclays

3.2 Ansoff Matrix analysis

3.2.1 Market Penetration

3.2.2 Market development

3.2.3 Product development

3.2.4 Diversification

28

31

31

32

33

34

4. 4.1 Levels of strategies in Barclays

4.1.1 Retrenchment strategy

4.1.2 Horizontal Integration

4.1.3 Vertical Integration

35

36

37

37



5. Organizational Growth strategy in Barclays

5.1 Resource

5.2 Financial

5.3 Human

5.4 Skill

5.5 Organizational process

39

39

39

40

40

40

6. Conclusion 42

7 References 43

8. Bibliography 44

LIST OF FIGURES

Sr. No. TOPIC Pg.

no1.1

1.2

Hierarchy of Strategic Intent

Barclays stakeholder engagement

16

19

2.1

2.2

Various PESTLE Factors

Five Porters Model

22

25

3.1 BCG Matrix 28

3.2 Ansoff Matrix 31



Executive Summary

Business firms often compete with each other to gain their customer’s

attention and business. While doing so, each firm tries to chalk out its

unique strategy or game plan based on its own internal strengths and

weaknesses in terms of which products or services to pursue, which

investment to make, which human resource policy to implement and

which organizational structure to adopt. As the environment changes,

companies may change their vision and objectives, structure, portfolio

of business, markets and competitive strategies. Vision, Mission,

Goals and objectives are the starting points of strategy formulation. In

this project we are going to study the various aspects of Barclays in

terms of strategy. The project highlights on Barclays Vision, missions,

objectives and stakeholders. It helps us to know the Barclays PESTEL

and Porters 5 forces. The writer also highlights on various strategies

adopted by the organization.



1. Outline your understanding of the organisation’s missions, visions, strategic intent, objectives, and stakeholder analysis.

Introduction to Barclays

The essence of strategy lies in striking a harmonious balance between a firm;

distinctive skills and capabilities and the external environment in which it

operates. (Bhat Govind K, Strategic Management)

According to Schellen Berger and Boseman Strategic management is a

continuous process of effectively relating the organization’s objectives and

resources to the opportunities in the environment.

F.R. David defines strategic management as process of formulating,

implementing and evaluating cross functional decisions that enables an

organization to achieve its objectives. (David Fred,2008)

Thus strategic management is stream of decisions and actions which lead to

the development of effective strategy or strategies to help achieve corporate

objectives. The strategic management process is the way in which strategies

determine objectives and make strategic decisions.

Barclays Bank

Barclays Bank is one of the leading providers of financial services and is

involved in retail as well as commercial banking, investment banking, credit

cards, investment management and wealth management services. It is spread

in many countries in the world and has a strong presence in USA, Europe,

Asia and Africa. The company is headquartered in London, England, UK.

The mission of the Barclays Bank is to make available products as well as

services to help the customers to achieve their financial goals that would in

turn lead to economic growth.



The history of Barclays Bank goes back to 1690 when John Freame and

Thomas Gould started doing business as Goldsmith bankers at Lombard

Street in London. In 1736 the company acquired the name "Barclays" at the

time when James Barclay joined the business. In 1896 a number of banks

including Gurney's Bank of Norwich and Backhouse's Bank of Darlington

came together as Barclays and Co, a joint stock organization. This bank

operated through 182 branches and was often jointly known as the Quaker

bank.

In the early 20th century the company acquired more such banks including

United Counties Bank, Bolithos Bank, and London, Provincial and South

Western Bank. In 1965 the US affiliate of the bank, Barclays Bank of

California was founded in San Francisco. It was in 1985 that Barclays UK

and International was brought together to found Barclays PLC. The very

next year the company became the first UK bank that was listed in the New

York as well as Tokyo stock exchanges. In 2000 Barclays Bank took over

one of the leading mortgage banks, Woolwich. In the next year it formed a

partnership with Legal & General to bring to its customers investments and

pension products. In 2003 Barclays Bank acquired Banco Zaragozano, one

of the major banking groups in Spain.

In 2005 Barclays Bank acquired a major share in the leading retail bank

Absa Group Ltd. The 2006 year is one of the most important years in the

company's history when 50 percent of the profits of the company have been

made from businesses in countries other than the UK. Barclays Bank is the



first bank in UK that introduced personal bankers in the branches in UK. In

2008 the company bought Gold fish, the reputed credit card company at $70

million. In the same year Barclays Bank had also bought a share in one of

the major Russian retail banks, Expobank at $745 million.

Barclays Bank aims to be one of the best universal banks that would be a

leader in the financial services sector of the world. The company follows the

strategy of anticipating the needs of the clients and the customers and serves

them by offering a whole rage of services. (Barclays.com)

1.1 Mission and Vision of Barclays

The mission is an enduring statement of purpose that distinguishes one

business from other similar firm. It identifies the scope of its operations in

product and market terms. It implies the image the firm seeks to project and

reflects the values and priorities of the firm’s strategic decision-makers.

A good mission statement describes an organization’s purpose, customers,

products or services, markets, philosophy and sense of technology. A

mission statement should i) define what the organization is and what the

organization aspires to be ii) be limited enough to exclude some venture and

broad enough to allow for creative growth iii) distinguish a given

organization from all others iv) serve as a framework for evaluating both

current and perspective activities and v) be stated in terms sufficiently clear

to be widely understood without the organization.

(Rao Subbha, 2005)



Mission of Barclays

The Barclays mission is to be an innovative, customer-focused group that

delivers super products and services, ensures excellent careers for their

people and contributes positively to the communities in which they live and

work.

In order to attain this mission Barclays concentrate on following aspects

Deliver a superior customer experience and offer high value products

and services that consistently exceed their customer expectations.

Attract, develop and retain talented, performance-oriented people by

providing employment opportunities that are among the best in

financial services industry.

Play a full and active role in the communities in which Barclays

operate to ensure mutual benefit from their success.

Vision

It is important for managers and executives in any organization to agree

upon the basic vision that the firm strives to achieve in the long term. A

vision statement should answer the basic question, “What do we want to

become?” A clear vision provides the foundation for developing a

comprehensive mission statement. Many organizations have both vision and

mission statement, but the vision statement should be establishes first and

foremost. The corporate vision has the potential power to focus the

collective energy of insiders and to give outsiders better idea of what

organization really is. (Rao V.S.P., Hari Krishna V, 2008)



Vision of Barclays

Barclays are committed to building a world-class organization. They aspire

to be amongst the most valuable and admired financial services companies

in the world:

A business that leads in its chosen markets

A portfolio of brands that are synonymous with quality and integrity A culture based on high performance and behavioral excellence

In short, a company that becomes a benchmark for all others.

In pursuit of these goals Barclays are now more than ever depending on the

contribution of our supply partners to deliver high performance that directly

and positively impacts on the service they give to their customers and the

creation of value for their shareholders. Barclays is committed to leading

the development of professional sourcing and supplier management and

maximizing the value derived from the relationships they have with their

supply partners. This is key in establishing high and continuously improving

standards of practice and behavior across both the Barclays Group and their

supply partners. Barclays will increasingly be working with a smaller

number of trusted supply partners for the majority of our key requirements.

In return for this commitment we will require higher levels of performance,

openness and collaboration than have been required in the past.

In return for a commitment to these high standards, Barclays will commit to

long term, mutually beneficial relationships aimed at creating shareholder

value for both organizations. This site details the essential principles, values

and processes that will form the foundation and provide for the success of

Barclays future supplier relationships.



1.2 Barclays Strategic Intent

“Strategic intent” is the leveraging of a firm’s internal resources, capabilities

and core competence to accomplish the firm’s vision, mission and objectives

in a competitive environment. When established effectively, a strategic

intent can cause people to turn our excellent performance. The intent can

take the form of a broad vision or mission statement or a more focused route

covering specific objectives and goals.

Hierarchy of strategic intent includes the following elements:

A broad vision of what the organization should be

The organization’s mission

The strategic objectives and specific goals to be pursued relentlessly

The plans that are developed to accomplish the intentions of

management in a concrete way.

Figure1.1 Hierarchy of strategic intent



Barclays, in terms of reaching goals and objectives can look at its market.

As was mentioned the company does little of everything to accommodate

almost each individuals needs. By focusing on specific needs of the

market, Barclays gain more information, try as much as possible to

provide for these needs. It is seen that Barclays has segmented its market,

one good strategy used, in order to provide for its specific needs i.e.

young, old, rich, poor etc.

Barclays growth and expansion was an attempt to better and maybe even

gain more business operations. Eg. The company’s takeover of

Woolwich in 2000, this was an attempt to better its, mortgage banking

since Woolwich was and still is known as UKs leading mortgage bank.

Some of Barclay’s business which went international was Barclays

Global Investors and its investment banking operations which started

1986.

1.3 Objectives of Barclays

Objectives form the basis for the functioning of organization. Objectives

help to define the organization in its environment. Most organization

need to justify their existence, to legitimate themselves in the eyes of the

government, customers and society at large. In other words, objectives

may be defined as the long term results that an organization seeks to

achieve in pursuing its basic mission.



Objectives may be tangible or intangible. Tangible objectives include

achievement of materially quantifiable targets or goals. Intangible

objectives include factors like brand or company image, employee

morale etc.

Objectives of Barclays

To run and develop as a well know business

Build close relationship with their customers

To build for the future and to spread all over the world

1.4 Stake holders of Barclays

Stakeholder analysis is important for the development of knowledge and

understanding about other organization in the firm’s environment. The first

step is to list all stakeholders, and then position them on a stakeholder map.

This indicates the main relationships and pattern of interdependence between

stakeholders.

Such maps not only directly related stakeholders, but also include all those

that are indirectly assist the business in achieving its objectives. The likely

effect that any proposed strategy will have on these various groups (that is,

support or resistance) can then be assessed.



1.2 Barclays Stakeholders engagement

Barclays recognize the legitimate interest of their stakeholders when seeking

to challenge and influence business decisions. Exploring viable solutions to

individual and collective employee related issues. Stakeholders try to

maintain confidentiality when requested by Barclays. Barclay’s

responsibility is the first to communicate with its employees about issues

affecting them when these are not in public domain. To provide proper

service to their stakeholders Barclays had formed various committees to

look after the internal and external stakeholders.

Barclay’s compliance team works with internal and external stakeholders to

advice on litigation affecting the global group’s activities and assets. The

corporate development team plays a huge part in supporting Barclays plans

for global growth, advising on mergers and acquisitions, strategic alliances

and joint ventures. The corporate affairs team protects Barclays trusted

reputation, ensuring both international audiences and internal colleagues are



kept informed of the Group’s news and objectives. From mitigating the

environmental impact of Barclays building to ensuring the company

complies with property governance, Barclays property team manages the

groups premises. Barclays Corporate Secretarial services to the board of

directors and is based at the global headquarters in London. Responsible for

financial reporting and forecasting, the finance team monitors Barclays

budgets, ensuring stakeholders within the business have accurate

information.

Barclays believe in demonstrating professional management and leadership

and cultivating a culture of good corporate governance. It Values the

diversity of all employees and help them to fulfill their potential. Barclays

recognize and differentiate reward in line with performance and deal with

underperformance in a fair manner.

Thus it supports the principle of continuous improvement in handling the

interest of its members. They provide constructive feedback on performance

systems and ideas for improvement of the Barclays’ value chain.

(BPP learning media, ‘Business strategy’ pg.18)



Chapter 2

2. Conduct an environmental and organisational audit of the

organisation making use of PESTEL, Porter’s 5 forces; SWOT

Analysis, Value Chain analysis etc. (use any 2 strategic audit

models).

2. 1 PESTLE of Barclays

Organization does not exist in isolation; they depend on the environment in

which they exist, from which they draw materials and customers, and to

which they supply goods and service. Good knowledge of the external

environment can help to improve planning. Analysis of the external

environment and the trends which lead to change in it can identify threats

and opportunities more quickly decrease the likelihood of major surprises

and shorten the firm’s reaction time to events. The external environment can

be split into three elements, although these are often interrelated in practice.

The physical environment

The social environment

The competitive environment

The physical and social environment can be further divided into PESTLE

factors

Political

Economic

Socio-cultural

Technological

Environmental/Ecological

Legal



(Davis,K, 1995)

2.1 Various PESTLE factors

Barclays Bank identified the sustainability as a means of recognizing and

managing the economic, social, and environmental issues across the Group,

and at the same time, contributing to the wellness of the society. PEST

analysis is created to identify the factors that might affect the sustainability

of the organization.

2.1.1 Political Analysis

The sustainability of Barclays’ agenda has expanded rapidly. It reflects the

company’s increasing focus on the wider nature of business and made the

stakeholders growing interests in competitive world of business. There is

now a great awareness about the global challenges such as climate changes,

poverty, scarcity of resources, and demographic shifting. The political

factors which can affect Barclays is the fact that are wars within the country.

The business operation that most likely get affected by this is its offshore

banking. Within the world now, as it is now becoming a smaller place with



almost one market with countries as buyers and sellers, there are many

conflicting arising between and among nations. Eg. New rift between USA

and Venezuela, for oil no one knows what this may spark but as a global

bank in these countries, Barclays can be affected. The Government for a

particular country may raise taxis which will now affect the company

profits. At the end of the Budget this year, in London tax has risen for

almost everything. Increased taxes mean more money to pay to the

government and less money for you as profits. Barclay’s revenues and

profits can suffer as a result of the extra tax it has to pay for just running its

business

2.1.2 Economic Analysis

The approach to the sustainability program is useful and encourages the

company to be open and transparent to the issues such as the initiatives in

further research and development, dialogue with the government and various

organizations, and their priorities. The Economic factors which can affect

Barclays is mainly the changes in currencies, not just the pound but also the

US dollar etc. In order to be very effective, this company needs to be up to

date as much as possible with the fluctuations of the currencies or the

exchange rates as it is a bank and as it needs to be able to provide for its

customers

2.1.3 The Social Analysis

The sustainability strategy focuses in their objective to improve the value of

the business and their stakeholders. They give importance on the customers

and clients such as maintaining the understanding of their needs and

promoting the company by measuring satisfaction. It can be only possible by



focusing of their global performance by their assurance to develop an

innovative solution and enhancing performance. On the other hand, the

people working under their organization make a great advantage in the

performance of the business. In addition, they attract employees to collect

the talent, develop them according to the competent world, and retaining

them as much as possible. Every Season customers may require different

things, whether it is money for a holiday, money for a house or they just

want to save. These reflect the social factors, which affects Barclays

business operations. Based on what customers prefer at a specific point in

time is their, Barclays, duty to ensure that they provide for it. This company

does this by having various promotions and special offers given to

customers to make it easier for them. E.g. For a family looking to go on

holiday in the summer; they can borrow money with little interest etc. This

sort of offers attracts customers and so ensures the enhancement of Barclay’s

operation.

2.1.4 Technological Analysis

The Barclays uses the means of technology for their business especially in

the areas of inclusive banking. Their aim to help the people in fight against

poverty is possible through financial system. The technology makes it

possible to empower the system and establish a competitive advantage.

Pioneering the new ideas, adding the skills and operational excellence are

the guiding principle of the organization. Using the latest gadgets within the

company would usually mean they have time and energy to deal with issues,

whether it is customer complaints or otherwise, effectively. More of these

technology used means that Barclays is a growing company and it is up to

date with what is going on; making things easier. The downfall to this,



however, is the fact that it can be very costly to get it started. Firstly there

has to be proper training for effective use and then there is the maintenance

of it both of which can be a very risky endeavor.

2.2 Porter’s 5 Forces

Barclays is attempting to expand their business and services and discover

the potential and emerging markets. Through the investigation of the

competition and entry in these markets, the sustainability of the bank can be

identified. The Porter’s analysis is used to measure the ability of the firm in

performing in the foreign country.

2.2 Five Porters Model

2.2.1 Entry Barriers

There is a high entry because of the emerging markets such as India and

Africa that are actually highly regulated by the government and the central

banks. A lot of control and decisions are operated in the banks of these

countries that might regulate the interests on loans and deposits as well as



controlling the money supply. The Barclays is not that popular in these

countries because people are investing in governmental or public sector

banks which is an advantage for Barclays to implement its strategy for the

customers to have a quick and efficient service that can attract other

potential clients.

2.2.2 Rivalry among the Existing Competitors

In the competition in the emerging markets, there is an indication of high

rivalry because of the involvement of the public and microfinance

institutions. It is therefore, difficult to compare Barclays because of the high

regulations. Again, in the application of the strategies, the firm can acquire

the major stakes in the market which gives them an easy entry and create a

brand visibility.

2.2.3 Bargaining Power of Suppliers

There is a medium power among the suppliers of the bank who are definitely

the people from whom the banks raise funds. The major source of funds of

Barclays comes from the customers or depositors that are transformed to be

their suppliers. In order to attract the larger funds, the private banks offer

high interest rate which is important for the continuous sustainability of the

bank. In addition, the Barclays Card is introduced to attract more clients and

increase the volume of funds.

2.2.4 Bargaining Power of the Customers

There is a high power among the people in terms of utilizing the products

such as their cards, loans and other services. The high power on the



customers is gained because of the number of banks operating in the market

that offer similar services. However, Barclays is in advantage because of the

e-banking and the provided insurance services.

2.2.5 Threat from Substitutes

There are plenty of substitutes available in the market and it is said that there

is a high threat coming from this group. Banks are offering the same services

are aligned in the same agenda because of the similar services, although

different in terms of interests and payments on credit. Therefore, Barclays is

eyeing to compete from the unconventional companies which can give them

the rate of return. In the emerging country, particularly in India, the

customers are recognized to have a high propensity towards switching to

other substitutes, especially in the case of private banking.

Conclusion

Barclays already experiencing the air of success and still aiming for more,

this is possible through their ongoing view for sustainability. With the help

of the traditional strategy, Barclays will set a leadership in standard model

for the other firms.



Chapter 3

3. Based on the chosen organisation, analyse business portfolio by

using any 2 strategic models e.g. .BCG Matrix, Ansoff’s matrix

etc

3.1 BCG Matrix of Barclays

The Boston Consulting Group (BCG) model, popularly known as the BCG

Matrix and Growth-Share Matrix is based on two variables, i.e. the rate of

growth of the product-market and the market share held by the firm relatives

to its competitors.

The market growth rate is an indicator of the attractiveness of the industry

and the relative market share is an indicator of the strength of the firm in that

industry relative to its competitors.

3.1 BCG Matrix



Barclays achieved what it has achieved so far by using various strategies. il.

First of all, in order for this company to know what it is capable of in terms

of the resources it has, and the count it generates, in other words, in order for

them to know their position within the financial industry and their position

in the market, Barclays has used the famous Boston Consultant Group

(BCG) matrix analysis (Johnson et al, 2002). This tool of strategic analysis

basically puts any company or organization within a specific industry in a

position based on two dimensions of its market share, which is the amount

or the share of customers that use their products or services; and its market

growth, which means the growth of the industry the business is in or even

the amount of money this business spends on gaining a place within the

entire industry. There are four possible positions any company can be in

within its industry. There is first of all, the question mark stage or the

problem child stage. This stage basically depicts the introductory part of a

company or organization and its products or services. At this stage, as one

can imagine, the company is now trying to establish itself within the market,

and as one can guess, will have little or no share in the market but very high

costs of entering. These costs can be related to advertising and other

promotions, which will allow people to become aware of its existence.

The second stage or the rising star stage is similar to growth within the

industry. The company is now known by the customers so it will have a

relatively high or large share of the market but will still have very high costs

of growth at still because of advertisements, sales promotions, etc. At this

stage, even though it is known, the company is still a way off from being in

the ideal stage.



The ideal stage that is spoken of is known as the cash cow or the maturity

stage. Within the industry, this company is as its peak where sales is very

high due to its high market share and profits even higher because of low

costs spent on the company, as basically the industry has gotten smaller;

there is no more growth within that industry so money spent on attracting or

wining over customers from their competitors is not really necessary.

The final stage of this analysis is called the dead dog, and as the name

suggests, the company is dead. Low costs and industry growth as well as

low market shares are characteristics of this stage. The company is now in

decline and at this stage should think of various ways to revive its products

or services.

Barclays financial services group had used this tool to figure out, based on

its cash generations, market share and industry growth, what stage of the

industry it is in. and based on whatever position, Barclays had come up with

various strategies to ensure that it maintains a number one position within

the entire market. At present, it can be said that this company is in its

maturity stage of mainly because of its move to go international some years

ago and the fact that the industry is not getting any bigger. Also, based on

the expertise of the services provided by this company, it can be said that

they are in the cash cow stage.

(Minzberg, Ahlstrand and Lampel (2005), Strategy Safari, )



3.2 Ansoff’s Matrix analysis

The Ansoff Growth matrix is a tool that helps businesses decides their

product and market growth strategy. Ansoff’s product/market growth matrix

helps to know the new existing products in new or existing markets.

3.2Ansoff’sMatrix

The output from the Ansoff product/market matrix is a series of suggested

growth strategies that set the direction for the business strategy. These are

described below:

3.2.1 Market penetration

Market penetration is the name given to a growth strategy where the

business focuses on selling existing products into existing markets. Market

penetration seeks to achieve four main objectives:

• Maintain or increase the market share of current products – this can be

achieved by a combination of competitive pricing strategies, advertising,

sales promotion and perhaps more resources dedicated to personal selling



• Secure dominance of growth markets

• Restructure a mature market by driving out competitors; this would require

a much more aggressive promotional campaign, supported by a pricing

strategy designed to make the market unattractive for competitors

The core competencies of Barclays include its personnel and corporate

competency wherein the focus is on the company’s relationship with its

internal and external environment. These two competencies assist the

company in its daily operations. It also provides the company the capability

to create new trends in the market. The two competencies are given extra

attention by the company since these two competencies can do various

things for the company. In the instance of one of the competencies

experiences some problem the company has to create solutions or it will

experience more problems that may hamper the operations of the company.

3.2.2 Market development

Market development is the name given to a growth strategy where the

business seeks to sell its existing products into new markets. Barclays can

target children who are in secondary school. Children would love to be able

to make credit payments and if Barclays can devise a plan which would

allow parents to give their consent to their children making small cashless

payments with a weekly limit instead of a monthly one. It could bode well

for Barclays. This would set of as an opportunity again for it is basically

targeting a broader market. The design and plan for the process requires a

little bit of thought but find wise it is not a very expensive ordeal. Parents

who are already existing clients will be an even easier target and would

perhaps be interested without any kind of persuasion from the bank at all.



Working with existing customers to target new ones is the simple part but

gathering the untouched market would be the slightly hectic part. Again cost

wise it would not be too expensive but the work required would be time

consuming and perhaps some surveys would have to be considered for

appropriate market research. Another element that has to be kept in mind is

whether Barclays is actually adapting to the strategy of issuing out more

credit cards given the loss they have already incurred and keeping the credit

crunch in mind.

3.2.3. Product development

Product development is the name given to a growth strategy where a

business aims to introduce new products into existing markets. This strategy

may require the development of new competencies and requires the business

to develop modified products which can appeal to existing markets. If

Barclaycard came out with a new innovative product such as Lloyds did

with their TSB Airmiles account, they would be tolling in a lot of new

customers and new business from existing customers. Research and

development would be involved for coming up with new product. The 3

costs of the mergers would be covered in the advertising schemes and the

partnership agreement would allow Barclaycard to continue making revenue

over the sales of their card. A card that is credit card and offers interest to

the bank but using it for purchase would be a first from Barclay. This would

impact mostly the external stakeholders in the industry, the customers and

society. This would be operating at macro level for it would be technological

advancement and if beneficial it will eventually reflect socially considering

the trends in social factors are affecting the demand for a company’s

product.



3.2.4 Diversification

Diversification is the name given to the growth strategy where a business

markets new products in new markets. This is an inherently more risk

strategy because the business is moving into markets in which it has little or

no experience. For a business to adopt a diversification strategy, therefore, it

must have a clear idea about what it expects to gain from the strategy and an

honest assessment of the risks. Barclays have merger with various banks to

promote their business. These mergers and acquisitions helps Barclays to

expand its business in various areas.

(Davis, K. The challenge of Business, New York, McGraw hill)

CONCLUSION

Thus with Barclays support, other companies can benefit from their

strategies used etc. With the company knowing this, it can take advantage of

being in demand. Another opportunity for this company comes about again

because of its size. As a result of it being so well known, the company may

attract investors. This is a very good thing as it will gain more and more

resources, which will fund its endeavors.



Chapter 4

4. Develop & evaluate possible alternative strategies for the organisation you have chosen.

4.1 Levels of Strategies of Barclays

Modes of strategic management are the approaches adopted by managers in

formulating and implementing strategies. The approach addresses the issues

of who has the major influence in the strategic management process and how

the process is carried out. Managers generally use one of the three major

approaches to strategic management. Entrepreneurial, adaptive and planning

(Mintzberg, 2005)

Strategy refers to course of action. Strategy gives direction to the

organizational plans to achieve its goals. Based on the nature and level of

strategy implementation, the strategies can be classified into:

1. Functional level strategies

2. Business level stratifies

3. Corporate level strategies

Each of these strategies operates at respective levels. After analyzing the

environment and assessing the internal environment (SWOT analysis),

the next step in the strategy is making process is to develop strategic

alternatives to help the organization in achieving its objectives.

Alternative Strategy helps clients address the issues that have the biggest

impact on their business' value. Organization approach focuses on a fact-

based analysis of the market and competitive drivers of value creation. It



generates strategic insights into the business thanks to our expert knowledge

of the links between strategy, finance and performance.

Organization have experience of supporting senior executives allows them to

translate insights into pragmatic strategies delivering tangible performance

improvements. It also facilitates the alignment of the team behind the

strategy and ensures that it is rapidly translated into action. Previous

engagements helps to focus on strategic position assessment, profitable

growth strategy, organizational structure, resource allocation, strategic cost

reduction, due diligence and strategic management process.

Barclays can use various types’ strategy like stability where the firm can

maintain its status quo and sustainable growth. The firm can grow on

various aspects. Barclays is one of top companies in UK. So they may

require various alternative strategies in various dimensions. The growth may

be internal growth. Organization may select growth strategy to reduce cost

of production per unit. Growth strategies involve a significant in

performance objectives.

4.1.1 Retrenchment strategy

Retrenchment strategy is a defensive strategy followed by a firm when its

performance is disappointing or when its survival is at stake for a variety of

reasons. In case of Barclays it does not require retrenchment strategy as

almost in all sectors it is showing a consistent growth.

Barclay as a large organization generally can use a mixture of stability,

expansion or retrenchment strategies either simultaneously, or sequentially.

Example Barclays can achieve growth through acquisition of new business



or divesting itself of unprofitable ventures. Depending on the situational

demands, therefore, Barclays can employ various strategies to survive and

remain profitable.

4.1.2 Horizontal Integration: Horizontal integration refers to owing or

controlling a number of similar but separate activities in the same kind of

business.

4.1.3 Vertical Integration: It allows the firm to enlarge its scope of

operations within the same overall industry.

We know all strategies we implement have to fall under the SMART criteria.

This means that we have to know exactly what we want to execute to the

point to make sure our actions are detailed and specific. We have to be able

to quantify our data and make sure we know how much we have to put-in in

regards of inputs and know how much we’re getting back to ordain them

measurable. We have to know we have resources as of now or will be

readily available in the future to guarantee they’re attainable. Based on this

the results provided will be relevant. All this should be completed in a

certain time-frame or have a dead line making it timely. This is the SMART

criteria and this is the basis of us using the Ansoff Matrix and Porter’s five

forces theory. Understanding this and applying it to all the strategic options

Barclays have outlined is a good way of keeping sure that our options are

intelligent choices. We already have our inputs in order considering we can

measure hem using the 4 P’s (Product: Credit cards, Debit Cards and other

technological advancements with similar and additional features, Place: The

UK and smaller segments, Promotion: the advertising schemes and other

strategies we choose to promote our products. Finally Price: which is the



value we set based on the demand we forecast and the production costs of

our product and services).

Barclays cannot only look externally to analyze if these goals are achievable,

but they can also look internally. The difference is that the external analysis

deals with outside the company as was discussed, Competitors, Customers,

Political, Environmental, Social, Technological etc. Internal analysis,

however, is the opposite of it comes from within the company itself, sales

figures to see how it is performing, past promotions strengths and

weaknesses. Therefore, Barclays can look at itself in order to pin point

exactly where they get their most operations and try to gain as much as they

can from it.

CONCLUSION

Thus Barclays can see where they make their losses and try to develop

strategies in order to strengthen these. Some of these can be the company’s

sales sheet or its balance sheet at the end of the previous years; by taking

these into consideration, the strategies they are using can either be good or

bad, in terms of they can keep using them or try to figure out other means

and ways to make profits.



Chapter 5

5. Outline an implementation plan for the chosen strategies in

question 4.

Organizational Growth strategy in Barclays

Barclays Growth strategy can be implemented in following areas

5.1 Resources

The essential resources of Barclay include its own physical and

human resources. These two resources are acquired and continuously

developed so that its capabilities can be fully realized by the company. The

unique resource of Barclay includes the company’s intangible resource. This

kind of resource cannot be easily and directly acquired and it may take some

years before the full use of such resource can be realized.

5.2 Financial

The company funds come from either the parent company or from

other sources like investors. The funds are used to pay for the different

expenses of the firm. Barclays wants to focus on price based strategies

wherein the main goal is to achieve more profits without sacrificing other

things. The company has a set of priorities where it focuses its budget on.

The company has been doing well financially but it still wants to maintain

its financial standing through providing an effective and efficient service

with lesser cost and maintained profits.



5.3 Human

In providing excellent service to the clients, a company needs to have a

dedicated staff that performs well and knows that the service they give to the

client can help the company have a positive or negative image. The staff of

the company is well trained to ensure that the best service can be given to

the clients. The company makes sure that it hires promising individuals that

can assist in the company’s task of reaching their goals. These people are

trained well by the company so that each employee will have an important

role to play in the company. The company provides various financial and

compensation packages to their employees. This ensures that for every

effective service the employees do they are greatly rewarded. The company

also recognizes and gives awards to employees who perform above

standards.

5.4 Skill

The personnel of Barclays are well skilled in providing services to the

clients. The company makes sure that they hire individuals who are skilled

in management, banking and finance. The company also looks for various

activities that will help the personnel improve their skill.

5.5 Organizational processes

Barclays’ organizational processes were well thought of and were designed

in accordance with the need of the environment. Each organizational process

whether it relates to production, marketing or sales has a specific goal that

contributes to the success of the firm. The processes of Barclay underwent a



rigorous analysis. The management team made sure that they choose well

the processes that they will use.

Barclay’s financial group is known to many as just Barclays bank, mainly

because it is not known the extent of their business operations. Barclays is

not only known for its commercial business offered to UK and international

customers, (current accounts, saving accounts, insurance, morthages, etc),

but also Wealth Management and Stock brokers. Both of which are available

to high network individuals. Barclay’s wealth management includes offshore

banking, stock broking, private banking etc. The availability of such

business operations ensures that every segment of each market is taken care

of, working class or otherwise. This strategy which is used by Barclays is

essential and effective as there is something in it for everybody; each

individual is taken care of in this company, whether they are looking for just

a saving account or financial advice for a new or ongoing business.

(Rao V S P., Hari Krishna V, (2008): Strategic management)



CONCLUSION

Barclays is one of the UK’s leading banks, and with its great history, puts it

high above many others. This company has experience in doing what it does.

Although there are many competitors, it is seen that this company is still

ahead. It is still ahead because it uses various strategies which are working

and which will continue to work effectively. One of the Barclays main goal

is to build the best bank in the UK, it is seen that based on the moves it has

made, with training staff, technology and even its choice to go global, it is

on its way to doing that.

The fundamental principal to Barclay’s philosophy is to include the interest

of all of their shareholders from customers, employees, shareholders and the

wider community in route to providing a valued and prosperous

circumference of satisfied stakeholders.

Barclays cannot only look externally to analyze if these goals are achievable,

but they can also look internally. The difference is that the external analysis

deals with outside the company as was discussed, competitors, customers,

political, environment, social technological etc. Therefore Barclays can look

at itself in order to pin point exactly where they get their most operations

and try to gain as much as they can from it. On the other hand, their

company can see where they make losses and try to develop strategies in

order to strength these.



References

1. Bhat Govinda k, (2007): Strategic Management, Himalaya Publishing

House, Mumbai-400004.

2. David Fred R., (2008): Strategic Management: Concepts and cases,

PHI Learning Private Limited, New Delhi.

3. Rao Subba P, (2005): Business Policy and Strategic Management,

Himalaya Publishing House, Mumbai

4. Rao V S P., Hari Krishna V, (2008): Strategic management-Text and

Cases

5. BPP learning Media, Business Strategy , Viva Books

6. Davis, K. The challenge of Business, New York, McGraw hill, 1975.

7. Pearce A John II, Robinson B Richard (2005), Strategic Management

formulation, Implementation and Control, Tata McGraw-Hill

Publishing Company Limited, New Delhi

8. Minzberg, Ahlstrand and Lampel (2005), Strategy Safari, Pearson

Education, Delhi.

9. www.Barclays.com



Bibliography

1. Johnson, G., Scholes, K., 2002, corporate Strategy, 6th Edition,

Prentice Hall, England.

2. Barclays, company history, retrieved on April 13th , 2006 from

www.newroom.barclays.co.uk/contents/detail.asp

3. Rao V S P., Hari Krishna V, (2008): Strategic management-Text and

Cases

4. Pearce A John II, Robinson B Richard (2005), Strategic Management

formulation, Implementation and Control, Tata McGraw-Hill

Publishing Company Limited, New Delhi


PHI Learning Private Limited, New Delhi.

6. Cherunilam Francis, Business Policy and Strategic Management,

Himalaya Publication, New Delhi

7. Daniel Gray, ‘Uses and Misuses of Strategic Planning”, Harvard

Business Review, January-February.


PHI Learning Private Limited, New Delhi

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House, Mumbai-400004

10.Minzberg, Ahlstrand and Lampel (2005), Strategy Safari, Pearson

Education, Delhi.

11. www.barclays.com


http://www.newroom.barclays.co.uk/contents/detail.asp

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