Strategy and Change Management at Lloyds Bank: PESTEL Analysis and McKinsey Model

This report covers the strategy and change management process at Lloyds Bank through PESTEL analysis and McKinsey model. It includes the impact of COVID-19, net zero target sustainability, and fin tech use. The report also discusses the political, economic, social, and technological factors affecting Lloyds Bank.

And Change
management- Lloyds
Bank

EXECUTIVE SUMMERY
Change management refers to the procedure and methods under which any organisation
narrate and apply the changes within the both internal as well as external processes. It also
include fixing and carrying the employees, setting up the necessary steps for change along with
observing the pre and post changes in the activities in order to making sure their successful
application. Organisational changes are always found as the challenging tasks. It frequently need
numerous stages of practice and may affect various independent operations within the business
organization. Developing an organized approach for change is condemnatory to help assure a
advantageous conversion while justifying the disturbance. COVID-19 effect the entire economy
of country. Its impact on the Lloyds bank has been analysed. PESTLE analsyses help the
organisation in klnowing about the several external factors which are effecting the operations of
business. McKinsey strategy change model is useful for developing the effective changing
strategies at work place.

Table of Contents
EXECUTIVE SUMMERY..............................................................................................................2
INTRODUCTION...........................................................................................................................4
COMPANY BACKGROUND........................................................................................................4
SECTION 1......................................................................................................................................4
Market Share...............................................................................................................................4
Fin Tech Use...............................................................................................................................5
Impact of COVID-19 .................................................................................................................5
Net Zero Target Sustainability....................................................................................................5
Strategy Planning process by the use of william's strategy management model........................6
SECTION 2......................................................................................................................................6
McKinsey Strategy Change Model.............................................................................................6
SECTION 3......................................................................................................................................7
PESTEL Analysis of Lloyds bank..............................................................................................7
Porter's generic strategies..........................................................................................................10
SECTION 4....................................................................................................................................10
Recommendations.....................................................................................................................10
CONCLUSION..............................................................................................................................11
References:.....................................................................................................................................12

INTRODUCTION
The change management is a process which permit the professional within organizations
to purchase and scale the change management actions which help wedged individuals and groups
decision by their change. In simple words, it can be explained as the process of planning,
implementing and solidifying the several changes in the organisation. Basically, it state how the
companies handle changes such as adopting any new technology, shifts in hierarchy of
organisation. Lloyds Bank is the selected organisation for this report which is a British bank.
This report covers the entire background of company, strategy planning process, process of
application of strategy change model. Along with this, it also deal with the PESTEL analysis and
porter's 5 forces analysis of Lloyds bank.
COMPANY BACKGROUND
Lloyds bank plc is a British retail and commercial bank having their branches all over the
England and Wales. It was founded by John Taylor (a button maker) and Sampson Lloyd (an
iron producer) in 1765 having headquarters in Gresham Street, London, United Kingdom. This
company is dealing with the banking and insurance products. The origin of this bank reach back
to 1765, when John Taylor and Sampson Llyod set up a private banking business in Birmingham
which was named as Taylors and Llyods. That bank was only providing services to the
manufacturers and merchants. The bank has provided services to their customers more than 100
years, from a single branch. The Taylor has dropped out from the business in 1852 and after that
it becomes the Lloyds & Company. It becomes a limited concern in 1852. by joining Barclays
bank, It was established in Lombard Street where it took over Barnetts, Hoares and Co. At the
very first time, they use the symbol of famous black horse.
SECTION 1
Market Share
From a recent research, it has been found that the market capitalization of Llyods banking
Group is $44.93 billion which make it as the 437th most valuable company as per its market
capital. Market capitalization is the sum total of market value of any company outstanding
shares and it is used for measuring the worth of a company. Lloyds bank is consider as one of the
largest financial services organisation of United Kingdom as they are serving more than 30

million customers with more than 65000 employees. They are operating business operations
under several brands such as Llyods bank, halifax, Bank of Scotland and Scottish Widows.
Fin Tech Use
In order to develop the banking function as per the expectations of the customers, the
Lloyds bank has introduced online banking under which they introduce several of mobile
application such as Lloyds bank Mobile banking. It has been found that the use of technology in
banking result in the effectiveness and efficiency in the business operations. Along with this,
they are using the Infosys Finacle, Oracle Financial, Canopus, Fidelity National information
services and many more. Distribution of Pega Cloud bring various improvement in Lloyds bank
such as they move almost 25% of applications to the cloud, make a different division which
handle the credit card dispute in 30 seconds and many more.
Impact of COVID-19
COVID-19 pandemic result in the high level of credit losses as the insolvencies has been
arises among the Lloyds bank and household and this was only because of COVID-19 crises
which result in the global economic downturn. As the economic effect spreading, Lloyds banks
find themselves performance some big precedence that involve real track to reposting now while
also adjust for the future (Goumeh 2021). They had adopted several of practices such as social
distancing and perform the functions that were never developed to perform remotely. Along with
this, economic recession bring the monetary and currency value downwards which result in the
stop of flow of money. Several of businesses and corporations stop working and many of them
were shut down which also result in the less demand of loans and credits. It directly effect the
functions of Llyod Banks. COVID-19 directly effect the purchasing power of people which also
decrease the requirement of advance money. In this way the business operations of Lloyds bank
has been affected due to COVID-19.
Net Zero Target Sustainability
Lloyds bank is committed to decrease the footprints through the operations, financing
portfolio and supply chain. The meaning of being net zero is to decrease the emissions, which
they add to the atmosphere with the improvement of amount they remove, so that the
management of Lloyds banks make a balance which can protect the earth with the creation of
thriving, resilient global economy.

Strategy Planning process by the use of william's strategy management model
Strategic management model was developed by William F. Glueck on the basis of
general decision making process. It include several phases such as strategic management
element, analysis and diagnosis, choice, implementation and evaluation. The objectives and
strategies of organisation are considered as the important elements which contribute to the
strategic management process (Galletta 2021). The strategies of planning William Glueck to the
Lloyds banks are:
 Stability Strategy: This strategy suggest the management of Lloyds bank not to bring
any change in their planning if the environment is stable and they are performing well
in the market.
 Growth Strategy: It suggest to do the proper analyses of market before adding the new
area of operations.
 Retrenchment strategy: This strategy of strategy management model suggest the Lloyd
banks to reduce the services if they are not useful and make scarcity of resources.
 Combination strategy: this strategy is used by the Lloyds Banks for the purpose of
cutting back in some areas and expanding in some other areas.
SECTION 2
McKinsey Strategy Change Model
The McKinsey model is defined as a strategic tool and framework which is helpful for
managers and businesses evaluate their performance. The management of Lloyds Bank use this
model for the purpose of regularly enhancing their performance and implementing the process of
change management successfully at work place (Kharat, K., 2020). It is bases on the 7 key
elements which is commonly known as 7S which are as follow;
 Strategy: It refers to a well conservator business concern plan which permits the company
to develop a idea of action for the purpose of achieving a sustainable competitory benefit,
reinforced by the mission and values of Lloyds Bank. This bank make the blueprint of
action by which the organisation can gain the competitive advantage.
 Structure: It is defined as the way in which the chain of command and accountability is
organised which also result in the effective organisational chart. Lloyds bank is following

hierarchy structure in their organisation. This structure of organisation result in effective
communication at work place along with inter departmental coordination.
 Systems: It is required the business and technical framework which is useful for the
organisation in establishing the workflows and the chain of decision making. In simple
words, it can be defined as the day to day activities performed by the staff members of
Lloyds banks for ensuring the completion of tasks. For instance, Lloyds bank is using fin
tech for the purpose of completing the tasks.
 Skills: It leads to the development of abilities and proficiency of an organisation which
makes the employees eligible to perform and achieve the organisational goals and
objectives. Lloyds Banks is using the technology of artificial intelligence in order to
develop the skills and competencies of employees (Dimitras and et. al., 2018).
 Style: it refers to the importance of leadership style and working style of organisation
and how it bring changes in the decision strategies, people motivation and performance of
organisation. COVID-19 has bring several changes in the style of performing activities in
Lloyds banks as most of customers shift to the online banking.
 Staff: It include the talent management and employees having a relation with decision of
company like as recruitment, training and rewards system. In the context of Lloyds
banks, they are adopting the regulation of COVID-19 as a result their staff is working
from home only.
 Shared values: The goals and core values are reflect within the culture of organisation or
influence the code of ethics. Lloyds bank is following the COVID-19 regulations. They
are following the social distancing at their work place along with assuring not to gather
the people in their organisation.
SECTION 3
PESTEL Analysis of Lloyds bank
Political factors
 Government involvement and regulations: The government of United kingdom has issued
a huge level of regulations to examine the Lloyds banks. This is because they obtain high
amount of savings of the public. Hence, it is necessary for the Lloyds Banks to follow all
the laws of the state.

 Dual Banking: The federal government and the state have quality and control on the
Lloyd Banks and they are using the dual banking system for the regulation.
 Dodd Frank act: several of financial analysts have ferociously professional the Dodd
Frank Act as it has lower competitiveness of the UK firms. Along with this, it is too
circumscribe. In 2020, the regulatory pressure on the Lloyds bank has been changed
because of some factors which include more trade tension, globalization, social and
technological concerns (Dayma and et. al., 2018).
Example: the organisation is required to perform research activities on continuous basis. Any
future changes in the regulations directly affect the business operations of Lloyds banks. The
management can make and develop the business strategies as per the changes to perform the
business operations in an effective and efficient manner.
Economic factors
 Banks and economy: It has been found that the banks and economy of country are
interrelated with each other. A healthy and developed economy of country is
beneficial for the Lloyds banks and vice versa. Several of job opportunities are have
been created only by the local or foreign investment.
 Interdependent relation: Lloyds bank and economy of UK can not be good partners. It
is necessary for Lloyds bank to work economy for the purpose of performing their
business operations as it is not possible to do operations if the economy of the country
is not working.
 Developing Economies: It has been found that several of banks are performing
business operations online or with the use of technology. Most of customers of
Lloyds bank do personal and business transactions by using credit or debit card.
Lloyds bank can select the developing economies such as India, Hongkong,
Singapore and many others (Li and et. al., 2021).
Social factors
 Socio cultural trends: The change in the expectations and preferences of customers
makes the Lloyds banks to change brand strategies and planning. If the management of
Lloyds bank towards the attitude and behaviour of the people of a certain area, then the
management will observe several of changes in the recent time. For example, the people
of 80s and 90s tend for using debit and credit cards for doing any transaction.

 Impact and Changes: It has been found that several of things are changing and
transformed by recent years. The people of 80s and 90s prefer customer service and
convenience. It is the reason why the Lloyds Banks offer several of packages to their
customers. Hence, it change the entire picture of Lloyds Banks in this 21st century.
Example: The change in the trends of consumers have been analysed. The customers prefer
online banking now a days. So the organisation is required to focus on the online applications.
Technological factors
 Online banking: The advancement of technology brings several of changes in the
business operations of Lloyds banks. Now a days almost all the financial
transactions are done by online banking. Along with the transactions, customers can
also take the advantage of cards, insurance, loans online (Antoniou and et. al.,
2020). Technology makes the Lloyds Banks to make the wide area to reach to their
customers. They had introduced mobile application as well which the customers can
use for transferring the funds or paying any bills.
 Privacy and security: Some of serious issues have been raised by the use of
technology such as trust, confidentiality, security and privacy. Technology makes
the personal data of customers more weak than never before in history. If any
unauthorised person know the username and password of online banking of any
customer, they can easily transfer al the money. The risks has been decreased to a
huge extent by the use of double security and checking systems.
Environmental factors
Eco friendly and sustainability are consider as the factors which are most important for
Lloyds bank as they are investing a lot of investment for the purpose of dedveloping the
renewable energy sources. Lloyds bank has introduced the procedures of going without paper
transactions along with the solar ATMs having lithium polymer battery which is rechargeable.
Lloyds bank is focusing on making the environment clean by the use of energy more
efficiently. They had started publishing their annual report in the soft copy. It creats a good and
positive brand image (Manninen, P., 2021).
Legal factors
It has been found that different countries has developed different regulations for the
banking sector. Lloyds bank have to follow several regulate the business operations such as

Dodd Frank act, Federal Reserve Act 1913, Glass Steagall Act and many more. The government
of United kingdom has developed many other laws for the purpose of safety and protection of
customers. Lloyds is following the law of labour by contributing towards the employment.
Porter's generic strategies
This model help the organisations in determining the opportunities and threats for thr
future growth and expansion. It is useful for companies as it help in analysing the industrial
competition level. Porter's five force model help the Lloyds bank in analysing the competition as
they are working in the competitive market of United kingdom.
 Bargaining power of buyers: the customers of Lloyds bank want to buy the best services
by paying the minimum prices. It keep the pressure on the profit of Lloyds Bank in the
long run. The bargaining power of customers of lloyds bank is low as the people of
United Kingdom do not want to switch the banks (Abusloum and et. al., 2020).
 Bargaining power of suppliers: It has been found the bargaining power of suppliers of
Lloyds bank is high. Powerful suppliers in Financial sector use their negociate power to
infusion high cost from the firms in Foreign Money Center Banks field.
 Threats of New entrants: the low growth of financial industry of United kingdom state
that the new entrants threat is low. The reduction in the level of profit of lloyds banks
result in the discouraging the new entry from entering in the financial industry.
 Threats from the substitute products: Lloydds banks along with the competitors banks
are facing the low threats of substitutes. The major reason for this is similarities among
the services provided by them.
SECTION 4
Recommendations
From the above analyse, it has been found that the Lloyds Banks to bring some
innovative new services because it will help the organisation in attracting the new customers
along with retaining the existing one. Through creating the economies of scale, the management
of Lloyds Banks can lower per unit the fixed cost. Spending more money on the research and
development, the management can ensure their position in the market. Building an effective
supply chain with several of suppliers, the organisation can reduce the bargaining power of

suppliers. In addition to this, it is highly recommanded to the Lloyds banks to spread their
business operations in several developing countries having developing economies such as India,
China, Singapore and many more. The expansion of business operations result in the
maximization of profitability. As per the regulations of COVID-19, the banks are restricted not
to gather people or customers at a single place. Hence they are required to invest more of capital
in technological factors so that they can provide all the services of financial institutions online to
the customers. The following of hierarchical structure at work place of Lloyds Banks create a
clear line of communication and authority. By following this structure, the organisation can
make and develop the effective strategies as the management of organisation can easily
communicate with the staff members of organisation. The use of artificial intelligence in the
operations of Llyods bank bring the efficiency. They are required to focus on the social and
customers trends so that they can provide the services as per the expectations of customers.
CONCLUSION
From the above report, it has been concluded that the changes in the management of an
organisation effect the entire functioning of organisation. It is necessary to do complete research
before making and developing new strategies at work place. William strategy management
model help the lloyds Banks in performing the effective strategic planning. McKinsey change
model is useful for developing the changes in the organisation. Furthermore, several of
recommendations has been given to the Lloyds Banks plc for the purpose of implementing the
changes in the management in order to making that changes profitable.

References:
Books and Journals
Abusloum, M.A., Mohamad, K.A. and Othman, A.H.A., 2020, November. Testing the
Moderating Effect of Openness to Change and Imposed Change on Employees’
Readiness for Converting Commercial Banks to Islamic Banks. In International
Conference on Business and Technology (pp. 1829-1849). Springer, Cham.
Antoniou, N., Vrontis, D., Thrassou, A. and Papasolomou, I., 2020. Employee retention during
Cooperative banks' mergers and acquisitions. Journal for Global Business
Advancement, 13(1), pp.108-133.
Dayma, D., Kaushik, U. and Saxena, M.M., 2018. Merger and Acquisition Change Process
Between Two Banks Impacts on Motivation, Anxiety and Stress of Employees. IAHRW
International Journal of Social Sciences Review, 6(3), pp.434-436.
Dimitras, A.I., Gaganis, C. and Pasiouras, F., 2018. Financial reporting standards' change and the
efficiency measures of EU banks. International Review of Financial Analysis, 59,
pp.223-233.
Galletta, S., Mazzù, S. and Naciti, V., 2021. Banks' business strategy and environmental
effectiveness: The monitoring role of the board of directors and the managerial
incentives. Business Strategy and the Environment.
Goumeh, F. and Barforoush, A.A., 2021, March. A Digital Maturity Model for digital banking
revolution for Iranian banks. In 2021 26th International Computer Conference,
Computer Society of Iran (CSICC) (pp. 1-6). IEEE.
Kharat, K., 2020. Change Management in Public Sector Banks–An Agenda for
Leaders. Vinimaya, 41(4), pp.5-18.
Li, Q., Xu, Z., Shen, X. and Zhong, J., 2021. Predicting Business Risks of Commercial Banks
Based on BP-GA Optimized Model. Computational Economics, pp.1-19.
Manninen, P., 2021. Regulating Banks in the Age of Climate Change: A Precautionary Approach
to Calibrating Capital Requirements of Banks to Better Reflect Climate-Related
Financial Risks.