Lloyds Bank UK Performance Analysis and Recommendations

The report concludes that Lloyds Bank should focus on building brand equity through advertising campaigns, create awareness about its services, and differentiate itself from competitors. It also uses PESTLE analysis to review macro environment factors and Porter's value chain model to assess competitiveness in the UK banking sector.

Individual Report
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK ..............................................................................................................................................3
1. Background of Lloyds Bank UK. ...........................................................................................3
2. Macro Environment Analysis..................................................................................................4
3. Porter's Value Chain Analysis.................................................................................................5
4. Marketing Mix of Company....................................................................................................6
5.Brand Value Of Company........................................................................................................8
6. Recommendations for Lloyds Bank UK..................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1
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INTRODUCTION
Management tools refer to applications, solutions, systems used for controlling and
improving business. They show the impact of external environment on functioning and
operations of business. This report discusses about macro environmental analysis, 7P’s of
marketing mix of Lloyds Bank.
Further, it discusses about use of Porter's Value chain to analyse its competitiveness and
positioning in commercial banking sector. Lloyds Bank Plc is a British Commercial and Retail
Bank with branches in England and Wales. It was established in the year of 1765.
TASK
1. Background of Lloyds Bank UK.
Lloyds Bank Plc is a British Retail and Commercial bank. It was established in the year
1765 in Birmingham. The bank expanded during nineteenth and twentieth century’s and slowly it
took over number of smaller banking companies.
In 1995, Lloyds Bank merged with Trustee Saving Bank of British and traded as Lloyds
TSB Bank plc between 1999 and 2013. Lloyds Bank UK is a principal subsidiary of Lloyds
Banking Group that was formed in the year 2009 by acquisition of HBOS.
Lloyds Bank is the largest retail bank of Britain and have large network of ATM’s across
England and Wales. Further, Bank has made an arrangement for its customers to be served by
Bank of Scotland branches in Scotland, Halifax branches in Northern Ireland.
Lloyds Bank provides financial service to millions of its users of England and Wales with
their presence in every community of United Kingdom. Moreover, it supports 124000 start-ups
businesses in the year 2017 across the UK. It has its operational headquarters in London and
other offices in Wales and Scotland. Further, Bank has numerous office complexes, brand’s
headquarters and data centres in Yorkshire including Leeds, Sheffield and Halifax.
Lloyd's Bank provides wide range of banking and financial services to their customers.
These services are as follows: Current Accounts, Credit Cards, Loans, Savings, Individual
Saving Account’s, Home and Motor Insurance, Mortgages and Life Insurance.
Lloyds Bank offers numerous services to start-up businesses in England and Wales. It
provides effective services to their consumers with their strong distribution network and
competent employees who offers 24-hour telephone and online banking services. Moreover,
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Lloyds Bank Foundation funds local, regional and national charities. It joined hands with Mental
Health UK and supported an exciting new charity partnership with this association. Lloyds Bank
also fought and supported Anti-Slavery and Trafficking movement within United Kingdom.
2. Macro Environment Analysis
External factors or components are uncontrollable by most of the organisations. This
includes components like Political legislations, technological matters, financial tendencies,
environment influences and communal impact. They directly influence functioning of company/
bank.
To analyse Macro Environment of Lloyds Bank, PESTLE Analysis can be a useful tool:
 Political: The political factor plays major impact on profitability of Lloyds Bank Group
Plc. In the year 2016, British banking sector faces tough challenges within banking
sector. A sustainable business model of Lloyds Bank UK helps to overcome these
challenges within their sector. Llyods is no longer burdened with any conduct issues
resulting from its involvement in 2008 financial crisis.
Nevertheless, there are certain political issues that hamper functioning of Bank
this was introducing 8% of surcharge on bank profits by the UK government. Moreover,
banking sector faces the biggest political shock by decision of UK leaving European
Union. This causes instability in the political environment of UK and affects working of
Lloyds Bank. Economical: The economic environment comprises of factors such as Inflation, Foreign
exchange, Savings and Interest rates, etc. Further, it includes economic cycle and current
trends within economy of nation. The effects of post Brexit creates economic risk and
upheaval in economy of UK. Brexit can create certain negative impact on Lloyds Bank
like Low interest rate environment, impact over operation of Bank, Downfall in capital
and issuing of certain other regulations over Lloyds Bank (Hampshire, 2017).
 Social: It refers to factors/ components like labour composition, lifestyle, social mobility,
community and consumers of services/products. They can create opportunities for bank
to expand their business or barriers that affect their operations.
Demographic changes within UK population can affect future potential of Lloyds
Bank. For example, bank may be affected by ageing British population. Bank needs to
shift their operational functions to support needs of ageing population of UK.
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 Technological: The banking industry has made effective use of technology to ease their
operations. Every services of bank are available on just on one tap by consumers.
Development of financial innovations like: Fin-tech firms and other digital service
operators are helping bank to enter financial markets with convenient and cost effective
products. Lloyds bank has great access to upgrade technology with its multi-channel
business model that serves combination of digital and mobile capabilities at front
(Gutierrez, Boukrami. and Lumsden, 2015). Legal: This refers to legal proceeding and regulations that govern banking sector of UK.
Lloyds Bank suffers from lawsuits brought by Lloyds/HBOS Shareholder Action Group.
The lawsuits include ill-fated buyout of HBOS in 2008. Shareholders of bank claimed
£400 million from Lloyds Bank. This legal actions represents last remains of financial
liabilities from pre-crisis period(Driver, 2013)
 Environmental: It includes environmental issues like air quality, natural habitats and
growing pollution. This affects almost every industry in UK. Lloyds Banking Group Plc
has realised about current trends and changing behaviour of UK population and the
government to reduce Carbon footprint by business entity. Bank has decided to introduce
renewable electricity and reduce the use of paper for online statements while
communicating to clients.
3. Porter's Value Chain Analysis
The Porter's Value chain analysis is a strategic management tool to analyse particular
sector and understand about undisclosed forces of profitability of that particular industry. Lloyds
Banking Group can use this strategy to understand trends of their industry and developed plans
to increase their profitability in long term.
The five forces are as follows: Threats of New Entrant: It refers to entry of new competitors within the particular sector
or industry. New entrants bring innovative technology, lower pricing strategies, reducing
cost of operations and new value creation for customers. This creates pressure on
functioning of Lloyds Bank. To overcome these challenges, Lloyds Bank needs to have a
competitive infrastructure, creates trust among customers and offer customers with
attractive products/services to increase and retain clients to use their services (De Backer,
and Miroudot, 2014).
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 Bargaining Power of Buyer:The bargaining power of buyers is high in commercial
banking sector. They are often demanding lot. Further, buyers want the best deals and
offerings for lower rate. It creates pressure over Lloyds Banking Group Plc profitability
in long run. Customers within banking sector can switch to any other banks if they find
banking service incompetent. To overcome this situation Bank need to retained customers
by offering e-services to their existing clients (Dadhich and et. al., 2015) Bargaining power of Supplier:The suppliers of commercial banks are investors,
government and service users. Lloyds Bank have huge sum of investments from the
government of UK that makes it as the major supplier of funds to bank. Suppliers have
high bargaining power in banking sector; Government changed regulations of allowing
Lloyds Bank acquisition of HBOS. Moreover, recent down turn has created loss of faith
within customers in banking institution. This increases their bargaining power as
suppliers. Industry Rivalry:The UK commercial banking sector is ruled by five major banks which
are; HSBC, Standard Chartered, Santander UK, Royal Bank of Scotland and Lloyds Bank
UK. This creates intense competition among the five players of commercial banking
sector. Companies are trying hard to retain customers and clients within their bank. To
avoid competition banks are opting for Mergers and acquisition Options. Further, banks
are entering into new markets to expand their business and garner more revenue and
profits (Christopher, 2016.).
 Threats of Substitute Products/Services: In banking sector, there is little or no
differentiation in products offered. Companies within this sector offer basic banking
services like investing and saving. Lloyds Bank offers wide range of services to their
household consumers and business start-up.
4. Marketing Mix of Company.
Lloyds Bank marketing mix is as follows: Product: Lloyds Bank in UK offers wide range of services to their clients. It offers
guidance and support to millions of customers in United Kingdom. Products/ services of
company are shaped to fulfil needs of their individual clients and Start-up business.
Dimensions of services offered by Lloyds Bank include Personal, Private and
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International Banking and Business. It offers services like; Credit cards, Savings
Account, Insurance, Loans and Mobile Banking. Place: Lloyds Bank is one of the main financial institutions located in UK. It is a
subsidiary holding of Lloyds Banking Group. Bank does not only serve in England and
Wales but it has expanded its operations in Asia, Africa and Middle East regions. Lloyds
Bank provides client oriented services to support UK customers who have their business
or operations in Asian countries (Messai and Jouini, 2013) Promotion: Bank has invested large sum of money in their marketing plans to be on top.
It realises the importance of positive public image and thus, Lloyds Bank supports and
sponsors many events to create brand awareness among their targeted market. It sponsors
many campaigns in past 10 years like; Lloyds Bank UK become part of campaign
organised by Lloyds Banking Group to express their deep gratitude towards their users
for supporting banking services provided by them. Further, in the year 2016, bank
launches a new campaign naming it as for your next step”. Price: Bank provides unique and specialised services and products to their users. Lloyds
bank uses value based pricing strategy for their consumers. Bank believes that value as
core aspects. Potential consumers are willing to pay the price for benefits they derived
from the use of banking services of Lloyds Bank. Moreover, Bank offers differentiate
pricing depending upon financial strength of clients Physical Existence: The physical existence of Lloyds Bank is on both the platforms i.e. It
offers services through large network of their branches in different areas of the world.
Along with this it provides consumer to access their services through Online or Mobile
Banking. At their branches there are particular sector experts helping consumer. In online
platform it has built an App for their users to easily access to all services of Lloyds Bank
(Rahman and Areni, 2014) People: Bank has strong workforce which enables Lloyds bank To achieve it desired
objectives. There are around 45,856 employees to cater the needs and demands of their
customers. It has highly qualified and trained officers who work across different sectors
of Bank.
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 Process: Lloyds Bank follows standardised process while offering services to consumers.
Bank has developed its own Mobile App which can be easily accessible by their
consumers. It provides telephonic customer care supports for complains or issues.
5.Brand Value Of Company.
Brand Value refers to the financial assets that company record on its balance sheet. These
are the measures that estimate that shows brand worth. This creates a competitive advantage for
that particular company who has high brand value. It act like premium which influences
consumer behaviour and customers are ready to pay extra sum of money to obtain the
product/services of that company.
Lloyds Banking group is the most trusted bank within commercial banking sector of UK.
Bank caters to the needs of over 30 million customers in United Kingdom. Vision and mission of
Lloyds Bank is to help Britain prosper and be the best bank for their customers. Bank has gained
huge brand value through serving the needs and demands of diverse population of UK. It
operates as Halifax Bank and a Lloyds Bank brand in Scotland operates as Bank of Scotland
where it has been serving People of Scotland since 1695. This banking group indulges in
providing wide range of services to diverse consumers, business start-ups and wholesale markets
(Runhaar, Driessen and Uittenbroek, 2014).
Lloyds Bank enjoys strong position in the commercial banking sector of UK. It was the
highest performer among four big banks 16% growth value to £4.4 billion. Lloyds bank is trying
to build strong customer base with re-branding strategies. Bank is trying to regain trust of
customer back for banking institution through culture of responsibility. It is making its
operations more transparent and delivering fair outcomes (Brand Value: What It Means (Finally)
And How To Control It. 2015). Lloyds Bank is creating a strategic vision of achieving their
mission and objectives by using three value shapes which are; Putting Customer First: This implies that bank will consider consumer as their priority
in whatever they do. It will build their services in accordance to needs and demands of
their clients. Keeping It Simple: Lloyds Bank is trying to keep their operations simple. Bank is trying
to make its activities such as communicating with consumers, transaction etc. simple. It is
trying to identify opportunities and simplifying its functions.
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 Making a difference Together: It implies working together to deliver the needs of
customers. Banks will emphasis on feedback and comments to improve their functioning.
6. Recommendations for Lloyds Bank UK.
Lloyds Bank is a multinational bank located in different parts of the world. It enjoys
strong position within commercial banking sector of UK. To be at the top, bank needs to
improvise services offered by it. Further, to gain a competitive advantage, it requires making
certain changes. Start Advisory services: After post recession, small businesses are looking for advisory
partners. To create a strong base, Lloyds Bank should start advisory consultant service
for their start-up. This will help bank to become a part of strategic decision-making
within these start-ups and gain competitive advantages over other rivals.
 Focus on Creating Customer Experience: Bank should focus on creating value services
for their users. Lloyds Bank should try to build high quality products that meet customer
needs. It will help to re-gain the trust and faith of consumers, which had been lost due to
2008 recession. Lloyds Bank can achieve it by :
◦ Prioritization of loyal and high value customers
◦ Quick and prompt delivery of all the information and about services provided by bank
to their users Focusing and building Customer Relationship Management
 Brand Building: It refers to generate awareness and establishes or promotes company
through various techniques or strategies. In simple words, it means to build brand equity
by using advertising campaigns. Lloyds Bank should work upon Building Brand Image
by creating awareness among their users about varieties of services offered by them. It
should try to bring service differentiation in order to attract consumers.
CONCLUSION
This report concludes that there are various management tools to measure performance of
a company. These include PESTLE Analysis, Porter's Value chain, etc. They help company to
review what are the current threats and opportunities that has been prevailing in their sector;
Lloyds Bank UK uses PESTLE Analysis to review the impact of macro environment factors on it
operations.
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Further, it uses Porter's value chain model to know about its competitiveness within
banking sector of UK. There are certain recommendations for Lloyds Bank to be at the top
position within commercial banking sector.
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REFERENCES
Books and Journals
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Dadhich, P., Genovese, A., Kumar, N. and Acquaye, A., 2015. Developing sustainable supply
chains in the UK construction industry: A case study. International Journal of Production
Economics. 164. pp.271-284.
De Backer, K. and Miroudot, S., 2014. Mapping global value chains.
Driver, J., 2013. Estate Agency: A Marketing Challenge by. In Marketing in the Service
Industries (pp. 97-113). Routledge.
Faroughian, F. F., Kalafatis, S. P., Ledden, L., Samouel, P. and Tsogas, M. H., 2012. Value and
risk in business-to-business e-banking. Industrial Marketing Management. 41(1). pp.68-
81.
Gutierrez, A., Boukrami, E. and Lumsden, R., 2015. Technological, organisational and
environmental factors influencing managers’ decision to adopt cloud computing in the
UK. Journal of Enterprise Information Management. 28(6). pp.788-807.
Hampshire, C., 2017. A mixed methods empirical exploration of UK consumer perceptions of
trust, risk and usefulness of mobile payments. International Journal of Bank Marketing.
35(3). pp.354-369.
Messai, A.S. and Jouini, F., 2013. Micro and macro determinants of non-performing loans.
International journal of economics and financial issues. 3(4). pp.852-860.
Rahman, K. and Areni, C.S., 2014. Generic, genuine, or completely new? Branding strategies to
leverage new products. Journal of Strategic Marketing, 22(1), pp.3-15.
Runhaar, H., Driessen, P. and Uittenbroek, C., 2014. Towards a systematic framework for the
analysis of environmental policy integration. Environmental Policy and Governance.
24(4). pp.233-246.
Online
Brand Value: What It Means (Finally) And How To Control It. 2015. [Online]. Available
Through.
<https://www.forbes.com/sites/steveolenski/2015/09/15/brand-value-what-it-means-finally-and-
how-to-control-it/#1aec15d313b2>
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