Strategic Management of Lloyds Banking Group

This assignment requires a detailed analysis of the strategic management practices employed by Lloyds Banking Group. Students must examine the bank's market positioning, identify key competitors within the financial industry, and assess Lloyds' commitment to corporate social responsibility. The analysis should draw upon provided sources, including their annual report and external publications, to provide a comprehensive understanding of the bank's strategic direction.

GLOBAL CORPORATE STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1 FIRM’S COMPETITIVENESS IN THE GLOBAL FINANCIAL SERVICES
INDUSTRY.....................................................................................................................................1
TASK 2 STRATEGIC ALLIANCES, M&A’S AND GLOBAL COMPETITIVENESS..............5
TASK 3 CORPORATE GOVERNANCE, CSR, LEADERSHIP AND COMPETITIVENESS. . .7
TASK 4 PERSONAL REFLECTIONS ON LEARNING..............................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
In today’s highly competitive environment financial service industries are facing huge
competition. For this, most of them are adopting several global corporate policies and strategies.
Further, in order to sustain in this era it is essential for businesses to obtain international
expansion. This development requires coordinating all pricing and product strategies across
international market (Peng, 2013). It helps them in enhancing their market share by the way of
increasing customer satisfaction.
In this regard, the present study is based on the understanding of key strategic issues
relating to the Global financial services industry. For this, Lloyds Banking Group has been taken
into consideration which is a major British financial institution. The group was formed in the
year 2009. They are having their different branches across Wales and England with over 30
million customers worldwide. Moreover, they are the most famous and leading providers of both
individual and business clients within including current accounts, savings, personal loans, credit
cards and mortgages.
TASK 1 FIRM’S COMPETITIVENESS IN THE GLOBAL FINANCIAL
SERVICES INDUSTRY
In order to go through the competitiveness of company it is quite essential to review the
past performance of firm. It can be easily viewed by the annual report of Lloyd that there are
various competitors of firm such as Citigroup and ICBC Company. Citigroup provides
consumers, corporations as well as government with a broad range of financial services and
products (Lloyds Banking Group plc, 2015).
After going through the annual report of Lloyd Banking Group it has been identified that
in the first 9 months of the year they have made a strong presence and become the best bank for
their customers as well as shareholders (Ghemawat, 2013). The financial performance of bank
had given huge contribution to demonstrate the strength of business. By the end of September
2015 they underlying profit up by 6 per cent to £6,355 million. With the help of overall review it
can be announced that the main business aim of the company is to become the best bank for both
individual and business customers.
However, they are facing huge competition due to the increasing globalization as well as
other existence of other competitors such as ICBC, HSBC and Citigroup etc. By having business
existence in the UK, they continue to support for a robust UK economy with current low
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employment level as well as increased house prices (Aoki, 2013). Lloyd Banking Group will be
able provide satisfactory services to all their customers by adopting effectual global corporate
strategy (De Wit and Meyer, 2014). This group is continuously supporting the UK economy by
delivering its key commitments to businesses.
Firm’s competitiveness can be easily measured through the swot analysis as well as other
factors related which might hamper the overall competitive age. It clearly represents all the
strengths weaknesses as threats and opportunities of the group.
Advantages
After analysing the data from annual report of the Lloyd Banking Group it has been
founded that they are one of the best financial service industries of UK. It is considered as their
major advantage which helps them in increasing their customer base (Arbogast, Thornton and
Bradley, 2012). Another major advantage of this banking group is that they are serving their
business operations in rich countries due to which they can easily sell their products to poorer
countries. Globalization is another major area which has its effects on the better business
processing of firm. However, competition has also been increased within the same but it is far
better for providing various opportunities as well. With the help of this, the banking group is able
to enhance the employment and also they can improve their standard of living. They are serving
their business operations in different sectors such as Insurance and Investments, UK Retail
Banking and Mortgages as well as Wholesale and International Banking (Punzel, 2011). Due to
this, several opportunities are provided to local industries to work hard and compete with the
international businesses. While working with this banking group provides several opportunities
to the users. It is another biggest opportunity as investors can get much wider scope to invest in
different business with the help of this banking group.
Disadvantages
As far as the above advantages are considered, several disadvantages are also being faced by
Lloyd Banking Group. However, globalization has proven to be successful for this banking
group at some extent, it also hampers the productivity in some cases. Due to this, they are facing
major competition and also affect the local businesses and brands (Boschma and Hartog, 2014).
The overall local traditions and culture of people are also affected due to this. Another major
disadvantage for this banking group is that majority of population nowadays are moving towards
international firms for buying products and services.
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They are serving their business operations within the UK as well as England and Wales.
Here, they are facing huge interference from political parties due to which several conflicts
might arise among them (Lynch, 2006). There are several strategic issues relating to the Global
Financial Services Industry are also faced by them which should be overcome.
Opportunities
Lloyd Banking Group can adopt global corporate business strategies through which they
can attain better future opportunities. They can make their winning presence over the UK as they
have varied former competitors such as Bradford & Bingley. It is the best way through which
they can easily enhance the level of profitability (Park, 2014). In addition to this, globalization is
another most effective factor which has opened various new doors for financial service
industries. With the help of this, they are getting wide range of opportunities relating to enhance
market share, business expansion and better future growth by increasing consumer trust, several
employment opportunities in the next upcoming time etc. In addition to this, increasing
technological advancements has proven to be very beneficial for firms. Due to the use of mobile
banking services very bright future opportunities are coming on the way (Neely, 2007). Mobile
banking may leads to enhance the level of satisfaction among all the customers. Several British
consumers are using mobile phone to manage their financial accounts at anytime from anywhere.
However, it has provided huge opportunity to banking industries such as to minimizing their
operational cost per branch and satisfying the needs of clients. For achieving better growth in
near future they are attaining opportunity and focusing on launching Islamic banking services as
well. It provides them several growth options and attracting Muslim clients as well. Lloyd bank
can share all its growth opportunities in different segment of banking and provides wide range of
financial services as well (Carlsson, 2003). Government base of UK is quite strong and it
provides several growth opportunities to various financial banking institutions. With the help of
increasing monetary base of UK Lloyds can enhance their mortgage loan production easily.
From all the above given points it can be clearly determine that there are wide range of
opportunities provided to these firms.
Threats
One of the most common threat faced by the financial industries are related to the increasing
competition. There are several regulatory requirements which may affect the market share of
companies. This is considered as another major threat for Lloyd banking group. In addition to
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this, the total competitive advantage of firm highly gets affected due to the increasing
divestments (Marks and Mirvis, 2012). However, due to the changing political, economic
conditions as well as varied changes in UK financial standards may affect the banking business
on a rapid pace.
After going through the above discussion it can be determine that firm’s competitiveness in
the global financial industries can also be identified by the changing needs and demands of
customers. It is becoming a major issue for today’s banking group as consumers requires
changes in the service and products of bank. Due to these factors, most of these groups are
focusing on satisfying the needs of customers (De Wit and Meyer, 2010). There changing desires
somewhere revolves around the technological change due to which banking groups are offering
mobile banking and varied other e-commerce application to attract more number of customers.
Various financial industries nowadays are going through the different approaches which are the
most preferred methods of banking. Consumers nowadays are demanding for the quality as well
as easy services. Here, in this concern, it has been identified that there are four basic
requirements of customers from financial service providers such as:
Client usability: banking groups are requires to provide competent services which are
highly useful for their customers. All of these businesses assess the needs of their
customers as per their feedbacks and provide them appropriate services.
Service availability: Most of the consumers nowadays require easy and accessible
services from the banking group (Becoming the Best Bank for Customers, 2014). It is the
best way through which they can attract large number of customers.
Data privacy and security: In order to attain higher competitive advantage it is quite
essential for financial industries to keep all their customers information secure. It is the
best way to enhance the trust level of customers as well as brand image of group.
Easy banking: It is considered as a basic requirement of customers due to the increasing
technology. Most of them required easy banking services due to their busy working
schedule. However, mobile marketing is one of the easiest and secure options used by
customers nowadays (Lynch, 2006). It motivates them to go through online transactions
as well as purchasing.
Further, it has been founded that financial service industries are facing huge competition due
to the increasing globalization and changing demands of customers.
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TASK 2 STRATEGIC ALLIANCES, M&A’S AND GLOBAL
COMPETITIVENESS
Lloyd’s ambition is to become the best bank for customers in the insurance, customer
finance, retail and commercial banking markets. For this, they have adopted various strategies to
gain their productivity.
There is a process of contract sign between two firms to pursue a set of agreed objectives
known as strategic alliance process. Within this process, business firms are mutually agrees to
share their resources in order to achieve common goals and objectives (Kuratko, Hornsby and
Hayton, 2015). This is considered as a most effective strategy adopted by banking group in order
to expand their business. In addition to this, there are various other strategies for the expansion of
business such as:
Merger and Acquisition: There are various past literatures which has given appropriate
justification and information about the mentioned techniques. According to (Dess and Gregor
(2005) merger is a process of strategy adopted by firm at the time of declining market share or
any type of loss in business. Under this process, two different enterprises can form a new
business with their mutual understanding and agreement. It provides them various opportunities
through which they can enhance their market share as well as increase their number of customers
as well.
On the very next hand, (Kourdi, 2010) in his article determines that acquisition is
somehow related to merger in terms of objectives. But, both of them possess differences in terms
of overall process. Here, in acquisition process a firm can purchase any company to form a new
organization. It is generally done by them when they found themselves less profitable in the
market. Lloyd bank has been formed in the year of 2009 through the acquisition of HBOS by
Lloyds TSB. This group wants to become one of the best banks.
With the help of going through the strategic alliance, mergers and acquisitions this
banking group can easily develop and enhance their digital capabilities in the field they serve
their business operations. Lloyd banking group are having their business excellence business
operations and services within the area of area of insurance, customer finance, retail and
commercial banking markets (Lloyds Banking Group plc, 2015). Due to the changing customer
perception and increasing competition, Lloyd undertakes all these methods and acquiring other
banking firms to overcome with these challenges. It is the best way through which Lloyd
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banking group can provide diverse range of services to their customers and satisfy their needs as
well (Aoki, 2013).
These consolidated methods help Lloyd in becoming one of the best banking groups and
making their higher existence in commercial banking markets. With the help of this acquiring
this process, they can acquire and incorporate internet banking options in their business
operations (Klebanoff, 2012). In helps them in attracting huge base of customers and providing
them better and easy banking services. In addition to this, it can be determining that strategic
alliance with different financial service providers deliver huge customer satisfaction.
By adopting consolidated methods Lloyd banking group can easily inspire its digital
capabilities and provide personalized services to clients. These merger and acquisitions are the
formal techniques adopted by majority of banks nowadays just to go through the business
expansion within their business (Garriga and Melé, 2013). In this way, banks can minimize their
costs and risk as well by distrusting their total services across the members of the alliance.
As per the second section, it has been determine that Lloyds ‘business model’ somewhere
fits for purpose in a fast and dynamic 21st Century global business environment. But, it also
requires some changes within their business operations. The best part of their business model is
that they put customers at the heart; based on traditional attributes such as prudence and a long-
term view. One of the major reasons behind this is its positioning in today’s financial markets.
Through their used business model they are able to identify their consumers’ needs and make
appropriate mobile usage (Hillier, Grinblatt and Titman, 2011). With the area of Britain most of
the users are effectively using mobile banking in order to manage their finances. One of the main
targets of any financial business industry is to maintain better relations with their customers by
providing them better services. Lloyd business model provides them this opportunity to develop
better relations and maintain higher competitive advantage. Within this fastest growing and
technological advanced it is also essential for business to undertake online banking method. Due
to this factor, it is needed for them to adopt latest techniques for business to undertake online
banking method. As per the current business model of Lloyd there might be some changes in
which they should be formulate this model according the economy of UK (Ghemawat, 2013). In
case of having all such changes this banking group can easily differentiate future regulatory
reform.
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TASK 3 CORPORATE GOVERNANCE, CSR, LEADERSHIP AND
COMPETITIVENESS
One of the main aims of Lloyd bank is to develop their brand image all around the world as
one of the best banks. For this, they are highly responsible for rebuilding trust with Britain’s
households, businesses and communities. Here, various factors which helps them in making best
at its part. One of them is CSR, it is known as a corporate social responsibility with the aim to
develop best brand image in the mind-set of customers (Johnson, Scholes and Whittington,
2005). Due to this, Lloyd banking group requires to carry out various CSR activities through
which they can integrate various regulations into their business model. On the other hand,
corporate governance is another most effective mechanism by which businesses are directed.
With the help of this method manager of financial institutions can make decisions regarding
corporate affairs (Ghemawat, 2013). According to the corporate governance report of 2015,
chairman itself stated that they are highly focusing on developing better client relationship by
developing trust among them.
In addition to this, last most essential factor which they need to undertake is in the
relation with leadership as well as appropriate management. It highly focuses on the enhanced
customer satisfaction. Moreover, it can be determine that management team of Lloyd can
incorporate best CSR and corporate governance practices. With the help of this, they can build
high class relationship with their customers by putting their needs first. The main objective of
this banking group is to attain minimum risk and customer focused UK retail and commercial
banking business model (Linn, 2008). For this, they must go through the various strategies so
that they can acquire higher customer satisfaction and gain productivity. For this, it is essential
for banking groups to make their services simplified and easy for their customers. In this
concern, they can develop best experience for their customers. Moreover, another most effective
way for them is to deliver sustainable development. Lloyd bank is trying to focus on their
employee training and development so that appropriate services can be provided to customers
(De Wit and Meyer, 2010). By incorporating all these strategies into their business operations
Lloyds can develop is ability and satisfy their customers’ needs effectively.
Further, it can be determine that Lloyd's Chairman and senior management team can
easily satisfy their customers’ needs and develop positive brand image as by adopting all these
strategies.
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TASK 4 PERSONAL REFLECTIONS ON LEARNING
As far as I have gone through this study I have founded that it helps me in various ways.
By conducting this study I am able to enhance my area of knowledge within the financial service
industries. It has raised my self-confidence level and I am able to complete this study by
increasing understanding of the Global Financial services industry competition. By carrying out
this study, I understand that the objective of bank is to satisfy the needs of clients and
shareholders as well as useful of mobile marketing for financial sector.
Strategic alliances and corporate leadership plays a major role in sustaining growth through
responsible banking. It helps the corporation to entering into the competitive market and earns
higher profit. With the help of these practices company can reduce cost and uncertainty in
business environment. Lloyd bank has adopted a technique of acquisition by making going
through with HBOS and Lloyds TSB. With the help of any type of strategic alliance they are able
to shares the cost, physical resource and knowledge base of employees. Further, it supports the
international expansion of the firm and building better brand image as well.
CONCLUSION
From the above report it has been founded that Lloyd Banking Group is providing
effective client services to their. Their business model somewhere fits with their development
strategy in this competitive era but it requires some changes such as implementation of highly
advanced featured mobile banking etc. Moreover, they undertake effective approaches such as
strategic alliance, merger and acquisition to go through their business expansion and enhance
their brand image. Further, several CSR activities as well as leadership strategies are also taken
into consideration in order to build effective digital channel. With the help of this, they are able
to enhance the level of customer satisfaction.
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REFERENCES
Books and Journals
Aoki, M., 2013. Controlling insider control: issues of corporate governance in transition
economies. Chapters.
Arbogast, G., Thornton, B. and Bradley, J., 2012. A global corporate sustainability model.
Journal of Sustainability and Green Business. 1. pp. 1.
Boschma, R. and Hartog, M., 2014. Merger and acquisition activity as driver of spatial
clustering: The spatial evolution of the Dutch banking industry, 1850–1993. Economic
Geography. 90(3). pp. 247-266.
Carlsson, R., 2003. The benefits of active ownership. Corporate Governance. 3(2). pp.6 –31.
De Wit, B. and Meyer, R., 2010. Strategy Process, Content, and Context International Perspective.
Cengage Learning.
De Wit, B. and Meyer, R., 2014. Strategy, An International Perspective. 5th Ed. Cengage
Learning.
Dess., and Gregory G., 2005. Strategic Management. 2nd ed. New York: McGraw-Hill
Garriga, E. and Melé, D., 2013. Corporate social responsibility theories: Mapping the territory.
In Citation Classics from the Journal of Business Ethics. Springer Netherlands.
Ghemawat, P., 2013. Redefining global strategy: Crossing borders in a world where differences
still matter. Harvard Business Press.
Hillier, D., Grinblatt, M. and Titman, S., 2011. Financial markets and corporate strategy.
McGraw-Hill.
Johnson, G., Scholes, K. and Whittington, R., 2005. Exploring Corporate Strategy: Text and
Cases. Financial Times Prentice Hall.
Kourdi, K., 2010. Business Strategy: A Guide to Effective Decision-making. Profile Books.
Kuratko, D. F., Hornsby, J. S. and Hayton, J., 2015. Corporate entrepreneurship: the innovative
challenge for a new global economic reality. Small Business Economics. pp. 1-9.
Linn, M., 2008. Planning strategically and strategic planning. Bottom Line. Managing Library
Finances. 21(1). pp.20 – 23.
Lynch, R., 2006. Corporate Strategy. 4th Ed. Financial Times Prentice Hall.
Marks, M. L. and Mirvis, P. H., 2012. 3 A research agenda to increase merger and acquisition
success. Handbook of research on mergers and acquisitions. pp.61-75.
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Neely, A., 2007. Business Performance Measurement: Unifying Theory and Integrating
Practice. 2nd ed. Cambridge University Press.
Park, S., 2014. Targeted social transparency as global corporate strategy. Northwestern Journal
of International Law & Business. Forthcoming.
Peng, M., 2013. Global strategy. Cengage learning.
Punzel, T., 2011. Risks and Decision Making: Using the Example of British Airway. GRIN
Verlag.
Online
Becoming The Best Bank For Customers, 2014. [PDF]. Available through:
<http://www.lloydsbankinggroup.com/globalassets/documents/investors/
2014/2014_lbg_annual_report.pdf>. [Accessed on 14th January 2016].
Klebanoff, A., 2012. The Impact of an International Market. [Online]. Available through:
<http://www.inc.com/arthur-klebanoff/the-impact-of-an-international-market.html>.
[Accessed on 14th January 2016].
Lloyds Banking Group plc, 2015. [Online]. Available through: <
http://www.lloydsbankinggroup.com/investors/financial-performance/lloyds-banking-
group/>. [Accessed on 14th January 2016].
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