Case study Barclays Bank: PEST, SWOT and Five Forces Analysis Barclays bank is providing its services in

Fantastic news! We've Found the answer you've been seeking!

Question:

Case study

Barclays Bank: PEST, SWOT and Five Forces Analysis

Barclays bank is providing its services in India in some their selected business divisions.
Barclays bank now wants to expand its services in India with other corporate units. This report is
a helping tool for their expansion as it provides basic information needed for this expansion.
External Environment Analysis by the help of PEST, SWOT and Porter’s five forces provides
essential information for the management of Barclays bank while making and implementing
business strategies with more knowledge, authority and control.

Task 1: Business Structure of Barclays Bank:
Barclays is one of the leading British based multinational banks having branches in 5 different
continents across the world. Barclays bank has strong position due to its asset estimation of more
than 2.3 US dollars. Banking structure of Barclays is divided into Personal and corporate
banking, Investment banking, Investment management and the unit of credit cards. The main
headquarter of Barclays is located at London and the customer’s base of Barclays bank is more
than 48 million in different continents including Africa, Asia, Europe, North and South America.
The basic structure of Barclays is divided into two clusters:
1. Corporate and investment banking plus Wealth and investment management.
2. Retail and Business Banking
Barclays bank also plays part in providing consultancy services for people in operating their
small scale business. The unit of personal banking provides its services to manage the investment
of small scale businesses. The security and easy access ability level for borrowing purposes
makes Barclays one of the standard financial service sectors. The business unit provides
consultancy for personal banking borrowing. They provide innovation to start different small
level businesses and provide attractive financial services and opportunities for personal loans.
Corporate banking is one of the profitable units of business unit of Barclays as it has more than
50,000 customers in five different continents. Risk management unit is also important to provide
advisory for businesses which have potential to invest and get profit and also provide
opportunities for investment. Wealth and Investment management unit works in more than 20
countries to provide its services. The basic functions of this unit are international and private
banking services, investment management services, fiduciary services and brokerage services.
Business structure of Barclays bank allows world class banking solutions for corporate
customers as well as personal banking clients. Using up to date technology in term of online
banking solutions and mobility services provide an edge on competitors due to the latest
procedures used in these services. Barclays rely on its global relationship approach. Different
relationships teams work across the world to add value to the business of corporate and personal
clients.
Impact of Market Structure
The basic purpose of Barclays is to increase its business in term of customers and profit, looking
for potential customers all around the world, looking for growing economies and to expand in
such economies to fulfill its vision of growth.
Barclays bank is working in India for more than three decades. Investment banking division was
the initial business of Barclays banking in India. Now Barclays bank is providing its corporate
and personal banking services in India. This technique of using selected divisions is because of
the market structure of India which is different as compared to Europe, Africa or America.
People hesitate to deposit in banks and also there was less focus on borrowing from banks. The
trend is changing due to awareness and availability of latest technology. The businesses of
selected divisions in India shows that market structure have impacts while working in
international economy. Changes in business structure while working internationally are basic
requirements due to different values, structures and perceptions of the customers living in
international market.
Task 2: Causes of Globalization
The change in the trends of international economy damaged the working of different
organizations. The negative trend of economy of different European and American business
environment allows organizations to look for new markets, customers and better economic
regions. This is one of the biggest causes of globalization. The other cause is the advancement in
technology and the availability of easy ways of doing business. People came to know about latest
processes, new innovations in products and services, the differences in the quality of products
and services and new ways of communicating. These cause international companies to expand
their business across the borders to target the needs and wants of such customers. The concept of
international free trade also caused globalization to take place due to the incentives associated
with free trade. Availability of better suppliers in the international market causes organizations
not to rely on domestic suppliers. Availability on quality suppliers on competitive basis is a
reason of globalization. Lower wages rates in other regions as compared to domestic labors in
Europe and America encouraged organizations to expand their business in Asian countries which
are less costly for infrastructure and low rate employees. All of the above mentioned reasons are
primary causes for globalization. Advancement in technology, use of internet, emails, mobiles,
and better traveling provided the basis for globalization to take place. The advancement in online
technology provides basis for improved Management Information System to collect and analyze
data all around the world to make investment decisions.
Implications of Globalization
Better business control through internet, mobiles and MIS provides comfort for organizations to
handle business from anywhere in the world. This has made strategic decision making easy and
fast as response from customers and management is speedy as compared to previous systems.
The improvement in the living style and standard are implications of the availability of
international standard products and services in those regions. People came to know about the
variety and quality of products due to increased and reliable products and services as a result of
international expansions. One can now see and buy products through online websites, emails and
mobiles phones as these are easy and less costly way of communication now days. Now people
have more choices in term of products, services and prices. One can compare product quality and
prices by the help of internet and websites to buy more reliable products according to their
budget. The other implications of globalizations are E-Commerce, better procedures, improved
manufacturing techniques, computer simulations and low cost products and services due to
availability of reliable suppliers and processes in region.
World Trade Organization
There are different causes and implications of globalizations but still there was a need of laws
and procedures for globalization and international business. WTO is an international
organization to provide standard rules and regulations for global businesses. Providing guidelines
for business expansions in other countries by taking inputs from host and guest countries.
Providing a list of social, legal and moral responsibilities to both parties for better business is one
of the tasks of World Trade Organization. Different members across the world have provided
their inputs and suggestions to generate standard laws for global businesses. Every organization
and country has to wok according to these laws. Providing soft barriers for investment
organizations and implementing the concept of free trade for global business are the major tasks
of World Trade Organization.
Task 3: PEST Analysis of Barclays - External Environment Analysis of Barclays Bank
Analysis of business environment through PEST analysis, SWOT analysis, Force Field Analysis
and Porter’s Five Forces provides authentic and important information to decision making unit
before formulating or implementation of business strategies. The macro and micro forces can
impact the strategies of management due to their dynamic nature. External environment analysis
is not a onetime process; it is a continuous process to make changes in strategies according to
external environment.
PEST Analysis
Analysis of Political, Economic, Social and Technological elements which can affect the
strategies and decision made by management is done under PEST analysis.
(P)olitical Analysis
India is a country where people choose their members of parliament through elections in a fix
time period. The Member of Parliament makes policies for foreign investors and multinational
companies. There is no clue of intervention of any third power in the political system.
Opposition provides suggestions for policies. So, there are fewer chances of changes in the
policies for foreign investors which are a good thing for Barclays bank.
(E)conomic Analysis
One of the growing economies of the world with have emphasis on research is an attractive place
for foreign investors to invest. The continuous growth in the GDP for the last 10 years provides
opportunities for Barclays and other foreign companies to expand in India.
(S)ocial Analysis
One of the countries having high population and high growth rate of population in future
provides opportunities for Barclays bank to have more targeted customers. Increase in literacy
rate and awareness about latest and up to date services in region provides opportunities for
Barclays bank to invest in India.
(T)echnological Analysis
Use of internet banking, mobile banking, ATM, credit cards, e-commerce and social media
provides a lot of opportunities for Barclays bank to introduce their up to date and latest services
in growing economy of India. Barclays can provide their services to improve banking operations
in India which is the reason why India allowed Barclays operations three decades back.
SWOT Analysis of Barclays Bank
Using strengths of Barclays bank in term of latest technology and operations to get benefits of
opportunities available in India in term of large term of customers and markets can be possible
by having knowledge about these internal resources and external business environment. SWOT
analysis provides this information.
(S)trengths
 Global Leader in providing financial and investment services in five major continents.
 Strong brand name in corporate banking system having more than 50,000 corporate
clients all over the world.
 High credibility in the growing market of Pakistan which is also based in Asia.
 Personal banking with no limit on minimum deposit provides an edge on majority of
competitors.
 Focus on risk management.
(W)eaknesses
 Need of bailout in UK due to economy crises in recent past.
 Bad impact on image due to government funding issue in Zimbabwe.
 Less innovation in marketing campaigns related to Indian culture. Barclays is working in
India for a long time but they fail to adopt market orientation related to Indian culture
(O)pportunities
 Past business experience of India provides an extra advantage to make an expansion
decision.
 Growing banking sector of India, focus on corporate banking and increased personal
funding due to reliability and credibility of Barclays bank.
 Investment opportunities in IPL and other Indian leagues due to corporate image of these
leagues can provide global promotional opportunities for Barclays bank.
 India is a country with wide geographical area and second highest population. India can
provide a lot of potential corporate and personal customers by making an expansion
decision in other parts of India.
(T)hreats
 Increase in interest rates has decreased the funding from personal banking sector.
Government banks and investment policies provides more attraction for personal
investors due to bigger output of these services.
 Domestic banks with cultural related strategies is a threat for Barclays
 More international banks are moving towards Indian market due to the availability of
business and customers. It can increase the scale of competition in India.
Porter’s Five Forces
 Entry Barriers: The entrance of new multinational banks like HSBC and other are
expanding their businesses in India due to soft barriers of entering and availability of
customers. This situation can increase the competition scale and number of saturated
markets in India.
 Rivalry with Industry: Services provided by different local and international banks are
of the same type. So, it is important to change interest rates and services charges to attract
more customers as compared to other banks. The switching of financial services for
customers to other banks is easy and not much costly so banks need to develop latest and
up to date processes to facilitate customers.
 Threat of Substitutes: Innovations in the products and services provided by banks,
including car financing, house financing and education financing provides opportunities
for bank to focus not only on traditional banking system. The local financing institutes
with less interest rate for personal borrowing are also a threat for banks in India.
 Bargaining Power of Suppliers: Reserve bank of India takes actions regarding
monetary suppliers which impact the supply of money in the economy. Customers
provide supplies in deposits for personal banking and majority of banks are offering same
interest rates. So, there is a need of innovation in services to attract financial suppliers.
 Bargaining Power of Buyers: Providing alternative services in term of finance for car,
houses, education, businesses and consultancy can bring the bargaining power of
customer low as all the banks are providing same type of services with same interest
rates.
Task 4: Business Objectives of Expansion
1. Capturing the potential customers in other attractive regions in other cities
2. Boosting the current market orientation of Barclays bank in India
3. Increasing the number of divisions working in India to capture more opportunities
4. Investment in Global promotional opportunities in tem of Indian Premium League and
other Leagues which have global impacts
5. Focusing on international revenue to carryout domestic and international operations.
India can provide opportunities for larger scale of revenue due to its population and
geographical area as compared to domestic branches in UK
6. Providing E-Commerce services in India due to increased level of interest showed by
Indian customers for online operations
7. Capturing corporate customers of India as Barclays bank has strong base and experience
of dealing with corporate customers. These customers can provide vast opportunities for
revenue as compared to personal or investment banking. Having more than 50,000
corporate customers is good enough experience for Barclays to target corporate banking
in India noting that India is growing economy as compared to major European countries
so it can provide more opportunities for business in India. There are number of corporate
sectors in India and number of Billionaires businessmen who can provide a lot of
opportunities for Barclays bank through their operations
Resistance from Employees
Making any change in the business structure or operations can help to bring employees out of the
comfort zone. This is the reason why some of employees resist against any type of change in
structure of operations. Making an expansion decision in Indian market means there will be a lot
of changes to be made to formulate and implement strategies for new geographical areas and
segments. Altering the operations of employees to take their assistance in expanding operations
can bring resistance from employees. Providing them incentives associated with successful
expansion of Barclays bank can help to bring down any resistance from employees. Expansion
can bring a lot of opportunities for managerial positions in new branches. Good human resource
management can communicate these opportunities with existing employees by giving them
attractive growth and career paths for potential employees to bring down the level of resistance
from employees.
Recommendations
Focusing on promotional activities associated with global marketing can help Barclays in Indian
and international market. Recent Olympics, Indian Premier League, Formula race and other
global events in India can provide a lot of help for Barclays in their promotional activities if they
use these events for marketing purposes. Proving online services in domestic languages can
provide a differentiation edge and USP for Barclays to target more customers. Barclays should
invest in social activities of education and green environment to build a better corporate social
image in India. Focusing on innovation in term of substitute products can help to bring more
revenue and customers to Barclays bank.