Strategic Business Report: Barclays Bank

This report analyzes Barclays Bank's strategic position using the Boston Consulting Group (BCG) matrix. It begins with an introduction and an overview of Barclays Bank's profile, including its operations in retail, wholesale, and investment banking. The report then delves into strategic theory, explaining the BCG matrix and its components: market growth rate and relative market share. The four quadrants of the BCG matrix—stars, cash cows, question marks, and dogs—are defined and their strategic implications discussed. The core of the report applies the BCG matrix to Barclays Bank, selecting four portfolios (investment banking, credit cards, current accounts, and foreign exchange) for analysis. Relative market share and market growth rates are calculated for each portfolio, and their positions within the BCG matrix are determined. Based on this analysis, strategic recommendations are provided for each portfolio, suggesting investment, divestment, or maintenance strategies. The report concludes by emphasizing the importance of strategic decision-making for business sustainability and growth.

STRATEGIC BUSINESS

Table of Contents
Introduction................................................................................................................................................3
Organization’s Profile................................................................................................................................3
Strategic Theory.........................................................................................................................................5
Application of BCG Matrix on Barclay's Bank.........................................................................................7
Conclusion................................................................................................................................................11
References................................................................................................................................................12

INTRODUCTION
In the present era, companies are constantly indulging new strategies and tactics for enhancing
the business operations as well as improving the business volume. However, constantly increasing level
of competition has enforced companies to regularly bring changes in the activities of business (Aabo,
Hansen and Pantzalis, 2012). In the present report, researcher focuses on evaluating the growth rate and
market share of Barclay's bank through the help of BCG Matrix. Main purpose behind carrying out this
study is that it will enhance the knowledge and skills of readers and learners regarding understanding
the actual position of cited company in target market and the implementation of BCG matrix to
enhance the market share growth. In this regard, study entails detailed information about the profile of
Barclay's Bank and about the strategic theory to identify and justify the strategic choice of models.
Lastly, through the means of selected model application will be shown on the banking sector of UK.
ORGANISATION'S PROFILE
Barclay's is a British multinational banking and financial services company which is
headquartered in London. Considering the present position of Barclay's, it is a universal bank with
operations in retail, wholesale and investment banking. Along with these, there are certain areas under
which bank provides services to its customers such as wealth management, mortgage lending and credit
cards (Barclays Bank PLC, 2015). Being a public limited company, it is the duty of key people of
Barclay's bank to provide quality of reliable services to its target customers so that long term
relationship can be maintained and desired results and outcomes can be achieved. However, it is
operating in over 50 countries and territories as well as it is having around 48 million customers
(Dinger and Hagen, 2009).
Further, Barclay's Bank is organised in four core businesses such as personal and corporate
which consists of personal banking, corporate banking, wealth and investment management,
Barclaycard, investment banking and Africa. Along with this, there are four major products in which
Barclay's Bank deals such as retail banking, commercial banking, investment banking and investment
management. In addition to it, Barclay's has primarily listed on London Stock Exchange (LSE) and it is
the constituent of FTSE 100 Index (Ackrill and Hannah, 2001). At present, market capitalisation of
Barclay's is of approximately 22 million and it is the 22nd largest company of any corporation that is
listed on London Stock Exchange.
Every company has a good and bad patch but it is the responsibility of people associated with it
to constantly make efforts and carry out the operations of business in an effective and efficient manner.
Similar to this, in 2001, Barclay's Bank has to close its 171 branches within UK which are mainly

located in rural communities. However, the bank called itself “The Big Bank” but this name as quickly
given a low profile after serious of embarrassing PR stunts. One of the major changes came in the
brand image when top level management took over the sponsorship of the Premier League from
Barclaycard in 2004. Furthermore, through the help of valiant efforts and loyalty of customers,
Barclay's enhanced its operations to a great level (Gola and Roselli, 2009). However, the signs of real
success was seen when management announced its agreement to acquire Legman Brothers. In 2008,
Barclay's announced to purchase, subjected to regulatory approve the investment banking and trading
divisions of Lehman Brothers which was one of the biggest financial conglomerate of US that had filed
bankruptcy. During the initial stage, this deal was blocked by the British government and the reason
behind this was the ongoing financial crisis (Burns, 2014).
Barclay's operations are organised within two major clusters named as corporate and investment
banking and wealth and investment. While secondly, retail and business banking are its other clusters.
Furthermore, corporate and investment banking and wealth and investment consist of three different
business units which are corporate banking, investment banking and wealth and investment
management. While on the other hand, the retail and business banking clusters comprises with four
business units, that is, Africa Retail and business banking, Barclaycard which consists of credit card
and loan provisions, Europe and UK retail as well as business banking in both.
Furthermore, investment banking focuses on providing comprehensive financial advisory,
capital raising, financing and risk management services to corporations as well as government and
financial institution (El‐Masry and Abdel‐Salam, 2007). However, investment banking consists of
corporate finance, mergers and acquisitions, equity capital markets, debt capital markets and risk
solutions group. Apart from this, Barclay's corporate banking offers integrated corporate banking
solutions to large local companies, financial institutions, non-bank financial institutions and
multinationals globally. This also consists of some of the world's largest corporations. Main motive
behind Barclay's corporate banking is to provide comprehensive solution for the financial needs of our
clients through the means of company's dedicated network of relationship teams. Herein, corporate
banking consists of cash management, trade and working capital as well as financing and risk
management (Alkhafaji, 2003). Lastly, personal banking is one of the crucial aspects of Barclay's
functioning and employees are putting tons of efforts to deliver the quality of services to its clients or
customers so that they can develop long term relationship with bank. Barclay's personal banking offer
great services to its clients such as wide range of accounts that are designed to fit for all the banking
needs of individuals such as current account, savings account, term deposit account and debit cards.
Looking at the present condition of banking sector in UK, competition level is constantly

increasing. This leads existing players to bring innovation and reliability in their approaches so that
they can sustain the position in the market and generate better results for future growth. However, this
is one of the major reasons behind selecting banking sector for the present study and Barclay's as the
company (Haentjens and Wessels, 2015). Further, through the help of BCG Matrix, investigator will
evaluate the actual position of cited bank and would understand the factors that are playing a crucial
role in the successful run of Barclay's Bank. Considering the fact that Britain's financial system is
extremely vulnerable to future crisis under present regulations.
STRATEGIC THEORY
Looking at the present conditions of market, it is essential for the firm operating in it to indulge
different strategies or tactics so that company can meet desired modifications and generate the best
possible outcomes. In this context there are several strategies that can be implemented in order to
enhance the functioning of business and generates desired results and outcomes. BCG (Boston
Consulting Group) model is popularly known as the Growth Share Matrix which is majorly based on
two variables that are: the rate of growth of the product market and market share held by the firm in
relevance to its competitors (Padmalatha, 2011). Furthermore, BC Matrix is a corporate planning tool
that assists managers in portraying company's brand portfolio or SBUs on a quadrant along with
relative market share axis which is denoted horizontally and pace of attaining market growth denoted
as vertical axis. In other words, growth share matrix is a business tool which uses relative market share
and industry growth rate as the major factors for determining and evaluating the potential of company's
brand portfolio and accordingly helps in suggesting future investment strategies.
According to BCG its two dimensions assist in revealing the profitability of business portfolio
in terms of cash needed to support that unit and the liquidity generated by the Unit (Calandro Jr and
Flynn, 2005). Firstly, Relative market share is one of the major dimensions that are used to evaluate the
market share of business portfolio. However, higher the corporate market share assists in generating
higher cash returns. In simple terms, more the company produces and offers its products and services to
target audience it will generate higher revenues and returns. On the other hand, the second dimension is
market growth rate which evaluate that, higher the market growth rate indicates higher earnings and
profits. Thus, companies that operate in rapid growth industries are cash users and are worth investing
in the situation when their future trends and aspects are showing growing results. However, the main
purpose behind using this approach is that, it assists in understanding the brands that company should
invest in and the brand or unit in which they should be divesting (Griffin, 2007).

(Source: Venzin, 2009)
These are the four basic elements of BCG Matrix under which different brands and Units of
organisations are categorised and their growth rate market share is analysed.
Firstly, Dogs position indicates the lower market share of the company as compared to its
existing competitors as well as highlights that company is operating in relatively slow growing market.
Thus, it is the duty of senior authority of the business to make sure that they perform deeper analysis of
each brand or SBU to understand whether they are worth investing in or to be divested (Sayar and
Wolfe, 2007). In such situation there are few strategic choices available to the businesses like
retrenchment, divestiture and liquidation.
Secondly, cash cows represent the most profitable brands and products so that they can be
milked more in order to generate as much as possible cash. However, the cash generated through this
category of products and services should be invested on the units of stars so that they can be supported
for their future growth (Pearl and Rosenbaum, 2013). As per the Growth Share Matrix, it is important
for the companies to invest in cash cows products but just provide them adequate amount of support so
that they can maintain their share within the market. In this context, there are several strategic choices
available to the firm for the cash cow products like product development, diversification, retrenchment
etc.
Thirdly, stars are the units or brands that operate in high growth industries and maintain high
market share. Furthermore, stars products of the company are considered as both cash generators and
cash users. They are the primary units of business and enterprise and it is important for them to invest
in it so that they can generate higher cash in terms of revenues. There are several strategic choices
I
llustration 1: BCG Matrix

available to the business such as vertical and horizontal integration, market penetration, market
development and product development.
Lastly, question marks are the brands that require very closer thinking; it is because these are
units which holds very little market share in fast growing market and consuming the large amount of
cash and incurring losses (Sayar and Wolfe, 2007). However, it is important for the top level
management to understand that even after large investments these units struggle to gain market share
and eventually comes under the category of dogs. Thus, it is the reason for which management have to
give very close monitoring to these units or brands and accordingly decide whether they are worth
investing or not.
The main aim behind using this strategic model is that it assists in evaluating the growth rate
and market share of the units and brands of the companies operating in UK market. Furthermore, there
are several benefits of using this matrix is that:
 It is easy to perform and carry out the analysis procedure effectively.
 BCG matrix assists in understanding the actual strategic positions of business portfolios.
 However, it develops suitable base for the further more thorough analysis (Proctor, 2014).
After understanding the benefits there are certain limitations for which Growth share analysis has been
criticized heavily for its oversimplification and lack of useful application. Following are the limitations
of BCG matrix:
 It only classifies business under four quadrants.
 It does not focus on defining market thus; businesses can be categorized as Dogs, while they are
actually cash cows or vice versa (Morris, 2010).
 External factors are not considered which have significant impact on the functioning of
businesses.
APPLICATION OF BCG MATRIX ON BARCLAY'S BANK
Despite of several limitations identified about the matrix it can still be considered as the most
useful tool if carried out in systematic manner. In the present case study, BCG Matrix has been used to
evaluate the growth rate and market share position of Barclay's Bank portfolios. However, operating in
such a competitive market it is essential for the management to make sure that the strategies and tactics
indulged within the functioning of operations are useful and effective in terms of generating better
results and outcomes (Hedley, 2010). The main benefit of using this model is that it assists in providing
clear guidance for each quadrant in terms of the approach to investment and support of Barclay's wide
range of units. Further, by the means of BCG matrix cited bank can easily allocate resources by

pursuing market share goals.
Following are the steps of BCG matrix through the help of which analysis of Barclay's strategic
positioning has been made:
Choose the Units: This is the first step of BCG matrix which focuses on evaluating different
units and brands of the company. According to the present given scenario, four portfolios of Barclay's
have been selected in order to evaluate their strategic positioning (Farina, 2010). These portfolios are
investment banking, credit cards, current accounts, and fortnight exchange. However, these are the four
units on the basis of which entire analysis has been carried out.
Define the markets: In the BCG Matrix analysis, defining the market is considered as one of the
most significant aspects. Rationale behind this is that, if analyst is unable to define accurate market
then it may lead to poor classification of market. In the present study, market is being classified under
four different segments which consist of Investment banking, credit cards, current accounts, and
fortnight exchange. Following table assist in evaluating the leaders of different market and current
position of Barclay's bank Units in each of the portfolios. Investment banking with 4.8% of market
share lies in Stars category of BCG Matrix because JP Morgan with 8.5% is at the top of the list in
Investment banking (Critchlow, 2015). While on the other hand, despite having 18% of market share,
current account stands in cash cows categories because Lloyds bank plc with 27% is leading the chart
of current account in UK (United Kingdom Current Account, 2015).
Business Portfolios The Highest Market Share Barclay's Market share
Investment Banking JP Morgan 8.5% 4.80%
Current Accounts Lloyds Bank plc 27% 18.00%
Credit Cards Barclay's Bank Plc 1% 1.00%
Foreign Exchange Citi Bank 16.11% (EuroMoney,
2015)
8.11%
Relative market share: In general, relative market share can be computed by the means of two
terms revenues or market share. The main aim of calculating relative market share is that it assists in
defining the difference between selected company's market share and the chart leader. In the present
study, as stated above four different portfolios has been selected thus, Barclay's share of market will be
divided by the leading company of each portfolios in order to compute the relative market share.
Relative market share = Selected firm's market share (or Revenues)/ the largest competitor market
share (or Revenues)
Business Portfolios The Highest Market Barclay's Market Relative Market Share

Share share
Investment Banking JP Morgan 8.5% 4.80% 4.5/8.5 = 0.56%
Current Accounts Lloyds Bank plc 27% 18.00% 18/27 = 0.6%
Credit Cards Barclay's Bank Plc 1% 1.00% 1/1 = 1%
Foreign Exchange Citi Bank 16.11% 8.11% 8.11/16.11 = 0.5%
Market growth rate: This is another significant element of the BCG Model. However, in the
industry growth has been considered in order to evaluate the actual growth that company like Barclay's
in its Banking sector can expect in the future. Different portfolios have varied growth rate thus, it is
important for the bank to make sure that it maintain the functioning of business in effective manner and
accordingly attain the growth. However, following are the growth rate in different portfolios that helps
in evaluating the future of the units. In this context, Barclay's should invest more in Investment
Banking sector because it is showing growth rate of 3.9% which is relatively high and it is expected to
grow more, as people are more interested in investing money rather than keeping saved in accounts.
While on the other hand, growth rate of current account is showing negative result of -0.3% which
clearly indicates that Barclay's top level management should not invest in this segment. Moreover,
should divest this portfolio in order to avoid future loss situations. In case of credit cards growth is
relatively good and Barclay's is leading the chart means they should just maintain this segment as it
will help them in generating cash (Credit Card Press Release, 2013). Lastly, foreign exchange lies on
the line of BCG Matrix with 0.13% of growth rate.
Business Portfolios Industry Growth Rate
Investment Banking 3.90%
Current Accounts -0.30%
Credit Cards 1.00%
Foreign Exchange 0.13%
BCG Matrix:

On the basis of above BCG matrix of Barclay's Bank it can be easily evaluated that, the selected
four portfolios of the bank are segmented in different elements of the matrix (Barclays Bank PLC,
2015). However, Investment Banking (IB) is one of the most significant unit of Barclay's company has
it is in Star category of BCG Matrix. This clearly indicates that senior authority of bank should focus
on investing in it so that they can generate higher results. However, growth rate of IB is 3.9% and
market share of 0.56%. While on the other hand, the growth rate of current account is showing negative
result of -0.3% and market share of Barclay's Bank in current account is also relatively low of 0.6%
(United Kingdom Current Account, 2015). Thus, it is suggested that either management of bank should
develop the product so that it does not start generating better outcomes nor they should divest the
portfolio in order to avoid the future loss and risks. Furthermore, credit cards are also segmented in
cash cows' category with 1% of growth rate and market share of Barclay's (Credit Card Press Release,
2013). Thus, senior should maintain the position so that cash can be generated. Lastly, foreign
exchange is lying on the relative market share of 0.5% with 0.13% of growth rate. Thus, company
Illustration 2: BCG Matrix of Barclay's Bank

should invest in foreign exchange portfolio so that it can be segmented to cash cow's category and help
Barclay's in generating better business volume in near future.
CONCLUSION
In conclusion to the above report it has been observed that, strategic decision making is critical
in context to maintain the position of business enterprise as well as attaining the future growth and
sustainability. Further, investigator through the help of BCG matrix has evaluated actual strategic
position of different portfolios of the Barclay's bank. However, on the basis of these analysis different
units has been recommended varied strategies so that they can be carried out in effective manner and
generates desired results for the firm.

REFERENCES
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