Strategy and Change Management Analysis of Barclays Bank

This report provides a comprehensive analysis of Barclays Bank's strategy and change management practices. It begins with an overview of the bank's background, market size, fintech usage, and the impact of COVID-19. The report then critically explores the strategic planning process using Wil...Read More

The Strategy and
Change Management
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Table of Contents
Executive Summary ........................................................................................................................3
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
Background of the company........................................................................................................4
SECTION 1......................................................................................................................................5
Market Size of the bank...............................................................................................................5
Fin tech use-apps the bank is using..............................................................................................5
The impact of Covid-19 on bank.................................................................................................5
Net Zero target sustainability.......................................................................................................5
Critically exploring the strategy planning process using William’s strategy management model
......................................................................................................................................................6
SECTION 2......................................................................................................................................7
Critical analysis of how the McKinsey strategic change model is being applied to the bank
when dealing with the strategic change.......................................................................................7
SECTION 3......................................................................................................................................8
Development of PESTLE and Porter’s five forces model to analyse the external environment
of bank.........................................................................................................................................8
Porters generic strategies ..........................................................................................................10
SECTION 4....................................................................................................................................11
Recommendations......................................................................................................................11
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................13
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Executive Summary
In the organization, the goal of change management is to implement strategies for effective
change and to help people embrace change. Change in business is constant and inevitable. This is
categorized as the company’s backbone and helps in the development of specific roadmap that
takes business towards the attainment of set targets. This would help business in having better
strategy which is being prepared with a deeper analysis and by considering the current market
trend in mind. For the report Barclays bank is taken which is UK based international bank. The
report covers market size, fintech use, Covid-19 impact. It also discusses the several strategies in
change management and recommendations are provided for attaining competitive advantage.
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INTRODUCTION
The term strategy refers to a concept of the collection of certain business decisions that are
made by the companies and the actions of which are carried out in order to achieve those
business goals and achieve a competitive position in the market. The development of strategy
includes an involvement of certain micro as well as macro environment analysis such as SWOT
and PESTLE analysis. It also includes other market and industry environment analysis such as
Porter’s five force and other competitive evaluation. The present report involves an analysis of
banking firm which is Barclays Bank that is being situated in UK. The report talks about the
micro and macro environmental factors. The further report also includes bank’s change
management process. At last certain recommendations are made to the bank dependent upon the
issues that are being determined as well as analysed.
MAIN BODY
Background of the company
The UK based international bank Barclays has its headquarter in the regions of London and
functions its operations with two separate divisions that is Barclays international and at UK level
both. The bank is being supported by a different service organisation that is Barclays Execution
Services. It was being founded in year 1690 and presently is being taken care by Nigel Higgins
as the chairman of the whole banking group. It offer services through them and retain banking
branches, investment, commercial, private and wholesale banking. It also offers its services in a
form of wealth management company having its overall revenue of more than 21.766 billion
pounds by each financial year. The bank is speeded across the world and is functioning with a
hard work of more than 83,500 employees across the globe under different divisions such as
Barclays UK, Barclays Corporate bank, Barclays Investment bank, Barclays US consumer bank,
Barclays private bank and Barclays payments. The company has a strong international level
financial stability and other top five positions in the ranking of State Street corporation and Axa.
SECTION 1
Market Size of the bank
The Barclays bank one of the largest bank in UK. It was ranked fifth among the largest bank
in Europe with assets amounting to over 1.5 trillion euros. Its brand value needs to be estimated
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to be 4.6 billion U.S. dollars in the UK. As of now the bank is operating with more than or nearly
by 10.50 per cent in its market share among UK banks and has a net worth of more than 2.461
billion pounds and the value of company’s assets is more than 1.349 trillion pounds.
Fin tech use-apps the bank is using
The Barclays bank uses different types of fin tech apps that provides a differential benefit to
its customers across the world such as functions its operations with a high expertise within its
payments system, management of liquidity and the cash. It also uses Agency banking services
that provides an access to each clearing system of UK, manages foreign exchange risk through
its innovative products, and the payment flows. Along with these they also use BARX and
SWIFT as its services that provides helps in the collection & disbursements system.
The impact of Covid-19 on bank
During the Covid-19 outbreak, the bank realized a certain amount of credit that the bank
may not be able to repay and to manage this it has declared almost £ 1.6 billion as bad debt. It
has a great negative impact upon the business but on the other hand the use of digital or internet
banking by the customers of Barclays bank has helped them to have their sustainability in
market. The bank has also analysed that it is slowly recovering its debt or credit from customers
as they haven't been able to make a lot of money, but this has been offset by the UK government
through its stimulus measures. The Covid-19 has also impacted the bank in a way that they have
formulated different committees or desks for their clients who are suffering from the hardships of
Covid such as they have built a personal customer support services, business customer support
services, corporate client support, community aid packages and many others which helps them to
boost up their morale and enhance their customer service experience.
Net Zero target sustainability
The concept of net zero target sustainability is an aim of Barclays bank to achieve this by
year 2050. They have a belief that the bank could be able to develop a real contribution in
respect to the tackling of change in climatic conditions & provides assistance in the acceleration
of low carbon economy. In order to achieve this objective, the bank has developed a BlueTrack
phenomenon which is its trade mark and measures the financed emissions from it. They also
track the carbon limit time to time from this which is being developed thorough analysing certain
industry approaches that are present in the market. Within this they are having a separate
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dashboard that presents a data of financed emissions objectives by certain time along with its
progress which leads them to reach net zero score.
Critically exploring the strategy planning process using William’s strategy management model
The strategic planning process is a systematic and emerging method of performing
strategic planning in an organization. This process is used in strategic management for the
successful creation and implementation of strategies in the company. The William Strategy
management model within the process of strategic planning involves different phases of model
which are as follows: Strategic managements elements: This is used in order to identify Barclays bank’s
mission, goals, as well as its values with the main persons who all are involves in the
process of decision making. The vision defines the ultimate goal for the company. Analysis & diagnosis: This is in order to have a search for prevailing environment as
well as by diagnosing the impact of certain threats and opportunities that the Barclays
bank is having. There is evaluation of the internal and external environments for
assessing present situation in market. Choice: This is in respect to consider different alternatives as well as assuring the proper
strategy is being chosen. The strategies are developed of various level business level
strategy, corporate level strategy and global level strategy for selecting the best strategy
in Barclays bank. Implementation: Its role is to match bank’s different plans, resources, policies, structure,
as well as the administrative style within its strategy. With the implementation of strategy
in Barclays bank the organisation chart is changed.
 Evaluation: This is so to ensure the strategy & execution would meet the objectives of
bank. The performance in Barclays bank is evaluated by implementing strategies that are
monitored due to regular change in environment conditions.
SECTION 2
Critical analysis of how the McKinsey strategic change model is being applied to the bank when
dealing with the strategic change
The McKinsey 7s model refers to a strategic tool as well as the framework which provide
helps to managers as well as business in order to determines their performance. The McKinsey
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7s model determines the seven essential elements for a bank which is required to pay its focus as
well as ae aligned with the successful process of change management with constant
enhancements. Strategy: The strategic direction as well as the whole organisational strategy for Barclays
Bank are clearly stated & communicated to each of the bank’s employees & to the
stakeholders. This provides assistance to the organization in managing its guiding
actions, performance & devise various tactics which are connected with the other
strategies of business. Also, the strategy’s definition as well as the communication also
develops operations for Barclays Bank highly transparent & directs the responsibilities or
bank’s actions. The new strategies can be developed in fintech use. Structure: The Barclays Bank operates with a flatter organizational hierarchy which is
being supported by learning as well as progressive firms. The bank is having a lesser
managerial levels within its departments & is having high access to the top level
management or leadership, the staff members feels more secure along with a high
confidence & also possess greater access to information. System: Barclays Bank has defined as well as well-demarcated its systems in position to
assure that the operations of bank are effectively managed & that there is no chance of
conflicts or clashes. The systems at Barclays Bank are highly departmental within nature,
& includes, HR, finance, public relation, sales, etc. Shared Values: The main values at Barclays Bank are clearly defined as well as
communicated towards higher creative & supportive bank’s structure which would allow
staff to perform optimally & develop their motivational or organizational commitment. Style: The Barclays Bank operates with a participative leadership style. With a
participative leadership style, the Bank is competent to engage as well as involve its staff
in its decision-making process & managerial decisions. This also permits the leadership
to interact with the employees non constant basis & various managerial groups to
determine any potential conflicts for the resolution of various dispute, & for the feedback
related to the strategic tactics or operations. Staff: The Barclays Bank has an enough number of staff employed throughout its global
operations. Staff for various job roles as well as the positions are hired from within the
bank & also be externally depending upon the emergency & the levels of skill required.
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 Skills: Barclays Bank has a highly talented workforce, with high skills as well as
capacities. The whole workforce is hired on the basis of their merit as well as
qualifications.
SECTION 3
Development of PESTLE and Porter’s five forces model to analyse the external environment of
bank
PESTLE analysis Political: The political factors perform an important role in analysing the factors which
could impact Barclays bank with its long term profitability in specific nation or market.
The government stability helps Barclays bank in growth and development. The bank can
have expansion with the favourable tax policies and government subsidies is allowing for
maintaining competitiveness by cost controlling. Economic: The includes factors such as savings rate, inflation rate, foreign exchange rate
interest rate & the economic cycle that determines the aggregate demand as well as
aggregate investment within an economy. The micro environment factors like
competition norms has impact upon the competitive edge of the bank. Barclays bank
could use nation’s economic factor like inflation, growth rate & the industry’s economic
indicators that constitutes industry growth rate. Moderate inflation helps in bank growth
and increases consumer spending. Social: Society’s culture & a way of doing actions has an impact upon the culture of a
bank in industry. Shared beliefs as well as the attitudes of the customer’s performs a great
responsibility in how marketers at Barclays bank would determine the customers of a
given market & how they use to design the marketing campaign for Foreign Money
Centre Banks industry customers. Technological: A bank must not only act upon the technological analysis of the industry
but along with this upon the speed in which the technology has a disruption effect on that
industry. The increase of technology advancement helps in collaboration with the
customers in Barclays bank is enhanced by adopting innovative techniques of marketing
and use of social media.
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 Environmental: Various markets possess various norms or the standards of
environmental that could have an impact upon the profitability of bank in such markets.
This is related to the environmental standards, laws and regulations in different markets.
The Barclays bank benefited and invested in renewable technologies as subsidies are
offered to encourage investment. Business is affected by the change in weather and
climatic conditions.
 Legal: In different countries, the legal framework as well as the institutions are not strong
sufficient to safeguard the intellectual property rights of Barclays bank. It deals with the
health and safety laws by providing secure working environment for workforce. For the
consumers in Barclays bank data protection is important issue regarding privacy and
security concerns.
Drivers of change opportunities and threats
Opportunities
 The Barclays bank was having the government political stability and favourable taxation
policies which leads to growth and development.
 There was high rate of technological advancement which makes Barclays competitive
and have opportunity of offering innovative products and services related to banking.
Threats
 The Barclays bank can face negativity with the change in rules and regulations which
impacts the business performance.
 The high inflation and unemployment trends leading to low disposable income which
affects the performance of companies of Barclays bank.
Porter’s Five Force Analysis Buyer Power: This factor considers the power which buyers of Barclays’ bank have. The
Barclays has many branches and everyday customer’s as buyers develops them
particularly powerless as contrary to having just some, big customers, who will have
greater power to negotiate with it. Within the market, the customers have a plenty of
alternatives when it is on to select banks, but it is not like there are higher banks which
are that highly better.
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 Supplier Power: Supplier power refers to an interesting concept with Barclays bank, as
unlike most, they do not really serve physical products that needs to be offered, per
customer. However, Barclays bank carries a few suppliers, but bank’s products are of
relatively less significant &, if required, can be easily replaced by other branches of
Barclays bank. This expendable feature of suppliers has their low bargaining power. Competitive Rivalry: The third force which Porter’s five forces has as its competitive
rivalry. Within this Barclays bank losses highly considerable volume of bargaining
power. This is as there is a presence of many different alternatives to Barclays bank, such
as HSBC, Lloyds & RBS. It is in Barclays’ bank that favour then, that they would have a
sound track of records. The Threat of Substitution: The threat of substitution is also an important force when
analysing the balance of power within a market. The Barclays banks have higher threat of
being substituted, though, with digital payments such as Bitcoin & Litecoin attaining
prominence, & online payment gateways such as PayPal & Stripe which are becoming
ever highly powerful. The threat is present there, even if it does not require quick acting
on. Although, Barclays bank must definitely continue its plan of reinvesting their
existence assets into furnishing the future of money.
 The Threat of New Entrants: The last of Porter’s five forces is the threat of new entrants.
Generally, this banking market that Barclays bank determines itself in is existing
dominated by other firm names with huge amount of significant assets. It will be difficult
for a new bank to come along & succeed within the market with decades of years of
banking operation.
Porters generic strategies
This strategy is used for determining the organisation directions which includes four
strategies. This model helps in enhancing customer satisfaction.
 Cost leadership strategy- This is based upon organising and managing value added
activities for being low cost producer of product in the industry. The arrangement of
value chain activities helps in attaining cost leadership in context to Barclays bank.
 Differentiation strategy- It involves the development of product or service which offers
an unique attributes that is valued by the customers and perceives in better or different
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from those competitors. In context to Barclays bank the value added by uniqueness of
product allows firms for charging premium price.
 Focus strategy- This defines to specific segment or group of segments in industry which
aims to achieve cost advantage or differentiation in Barclays bank.
 Focus differentiation strategy- This relies on difference of given segment from others.
It is associated with adding something extra in niche market for success. In context to
Barclays bank it adds the contribution cost reduction and increases differentiation by
understanding customers needs.
SECTION 4
Recommendations
From the above report following are the recommendations:
 A Barclays bank must continue with its external market and competitive analysis so that
can have a clear and better determination of market and can be able to take corrective
actions for bank and customers. This would help Barclays bank in operating its business
with current market trends that can be beneficial for them to attain higher competitive
advantage in industry.
 It is also recommended to Barclays bank must apply different frameworks of strategic
management within its organisation so that can have deeper understanding of the
concepts and can make effective strategy. This would also lead to have a higher
profitability and sustainability in market at national and international level both.
 Barclays bank can include newest technologies or innovation in its operations so that can
offer better products or services to its customers as well as to the different corporate
houses which will enhance the customer base for bank & would have higher market
position.
 A bank can also adopt effective strategy of change management after proper analysis and
study so that can implement the change with a sequential procedure and with greater
effectiveness.
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 A Barclays bank is also recommended that a bank must comply with all the legal and
other laws at foreign level so that cannot face any difficulty in functioning its business
and can also have a smooth operation across the world.
 In the Barclays bank the competitive advantage is short term which is depending on
digital transformation. The advancement of technology is leading to increase in
productivity and efficiency. The usage of technology brings the innovation in banking
and online services are provided by the Barclays bank to its customer for convenience
and helps in gaining competitive advantage and sustainability.
CONCLUSION
From the above report it can be concluded that the bank is having different way of planning
its strategy and having a distinct plan of change management. On the other hand, however, it also
operates with the same industry workforce that other companies have from the micro and macro
environment, together with other competitive forces. The change model within the above report
is being understood through the application of McKinsey strategic change whereas the
application of Porter’s five forces, Pestle framework and Porters generic strategy has been done
so that can be able to understand the external environment of the business in time. The change
management can be taken by bank as per its needs to remain competitive and such change ca be
implemented with the use of effective model.
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