Alignment of Entry Modes to Firm’s Visions - Monzo Bank

BUSI48952 Contexts of Management
INTRODUCTION
The vision of thecompany refers to what the company wants to accomplish for the success of the
organization and Mission is a statement of how the company will achieve the vision. Strategies refer to the
series of methods to accomplish the vision by using the mission of the company. It is imperative for all the
business organizations to analyze their external environment to measure the impact of macro-environmental
factors on the performance of business and to take corrective measures to improve it.This presentation
willdiscuss the company’s strategy of Monzo bank lid. It is a UK based small size online bank headquartered
inLondon, England; providing financial services through its own mobile app and a prepaid debt card. The
presentation will also demonstrate the macro environmental and competitive dynamics for this company.
Further it will also provide strategic recommendations to enter in a geographical market for the company.
Discussion of the company’s strategy of Monzo Ltd.
 Vision –To expand the banking and financial services in the cities of US. To be the best community bank
in every community , ensuring safety of the finances of customers and to provide accurate and prompt
services through online transactions.
 Mission – Monzo’s mission is to make money work for everyone. It includes supporting the customers’
needs and making its online banking app as accessible as possible to the maximum customers. Its mission
is to offer maximum help to support the customers in controlling their finances.
 Values – The bank holds high standards of ethical behavior by supporting its employees and by creating a
positive and hassle-free working environment for them.
 Strategic Positioning –The current strategy of Monzo is focused on attracting new quality users who
use prepaid cards. Its main generic strategy is to is to put emphasis on word of mouth advertising and
having a loyal customer base. Its key strategic positioning includes community meet ups and
hackathons to be stable in the banking industry by strong positioning of the firm. The focus of this
company is on cost controls to support the customers effectively.
Key Stakeholders – The key stakeholders of Monzo bank include Shareholders, investors,
employees, regulators, government, and customers or clients etc. The major and most powerful
stakeholders are its shareholders (with more power and more interests) who consist of Thomas
Blomfield , Paul rippon etc. who collectively hold more than 17 million shares of the company.
Its other investors include Vanderbilt university and Octrahedron capital.
 Monzo bank is authorized by prudential regulation authority and is regulated by Financial
conduct Authority that impacts and monitors the functioning of this bank. The bank has
more than 1500 employees who have less power but more interest in the company. The
government of UK is also its stakeholder that has more power but less interest in the
 Alignment of Entry modes to Firm’s visions – The Monzo bank will enter the US market through partnership and strategic
alliance. It is a long-term and multi department commitment for the companies entering in the international market
that defines goals for both companies. It will enter the international market through partnership alliance with Onio-
based Sutton bank but it will not offer money lending services for its US customers.
Evaluation of macro-environmental aspects in the region that Mozo bank operates in
 Impact of changes in trade agreements and regional blocs
 Brexit had impacted the banking industry in terms of loss of bank assets and loss of financial services jobs. In
contextwith Monzo bank, it was not much affected by Brexit as the company faced no changes to the working of its
cards in UK or abroad due to Brexit. Also, the bank ensures that the deposits of customers are protected by the Financial
services compensation scheme of the value 85000 Euro perperson that will remain safe even after Brexit.
Impact of Socio demographic trends
 The demographic changes such as change in population growth rates and disposable income of people impact the
demand for consumer credit and mortgages that in turn impact the interest income for the banks. Monzo needs to
consider this aspect. Migration of people to another country also does not impact much on Monzo as it offers Monzo
card exchange rate to be used online in a foreign currency.
Role of Informal institutions
The culture delivers the values and behaviors that contributes to creation of trusts in banks and ensures positive image of
banks among its employees , investors and customers. A strong culture reflects how the employees are hired, resources
are allocated and it links the banks with employees who have similar beliefs. Monzo ltd. encourages an open and
collaborative working environment. It impact the company in a positive manner by contributing to its brand image in
the banking industry.
Impact of political and regulatory factors
 The political factors of the macro environment include political stability, change in the trade agreements, trade
restrictions, tax policies, trade reforms, tariffs etc. But the Monzo bank did not face the impact of political
instability such as Brexit as the company is regulated by Financial conduct authority and prudential regulation
authority that ensures safety of the finances of its customers. But the bank needs to comply with the laws of
these regulators otherwise it will have to face the penalties in case of any violation of the regulations set
bythese regulators in the interest of customers or employees or country. The bank will also have to comply
with the regulations of US because of its expansion there.
Impact of economic conditions
 The economic factors such as interest rates, inflation rates, foreign exchange rates , disposable income of
people, population growth rates etc. impact the functioning of banks. In context with Monzo ltd. , economic
factors such as interest rates affect the functioning of this bank. Also, the disposable income of people impact
consumer credit demand that impact interest incomes or the banks.