Strategic Analysis of Barclays Bank: Business Strategy and Challenges

This report provides a detailed analysis of Barclays Bank's business strategy, examining its strategic planning processes, challenges within the UK financial industry, and the implementation of these strategies. It delves into the core principles guiding Barclays, including customer focus, innovation, and integrity, while also exploring various strategic planning models such as vision-based and scenario-based approaches. The report addresses the challenges faced by the UK financial sector, including cybercrime, regulatory compliance, and the impact of FinTech. Furthermore, it differentiates between wholesale and retail banking operations, highlighting their distinct characteristics and operational considerations. The application of Ansoff's Matrix for Barclays is also discussed, outlining potential growth strategies such as market development and product development. Finally, it covers infrastructure, operation, and customer expectations in the financial sector.

Business strategy
(Barclays)

Table of Contents
INTRODUCTION .................................................................................................................1
Strategic planning of Barclays bank.......................................................................................1
The challenges face by UK financial industry and the process of strategic implementation to
the selected organisation.........................................................................................................2
The strategic implementation and differentiate between wholesale organisation and retail
organisation............................................................................................................................3
Ansoff's Matrix for Barclay Bank..........................................................................................5
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

INTRODUCTION
Business strategy define as the combination of steps to take a decision and performed
them to achieve business goals and able to stand in the market. Business strategy is backbone of
business which help to achieve the desired goals. In competitive atmosphere, business strategy is
essential to make better position in the market. In current pandemic situation, all business
strategy fail to maintain business (Das, Nayyar and Singh, 2019). All business plan fail due to
this situation caused by Covid-19. As a business advisor in Micro wallet Ltd, a person cover
micro-finance areas. And later on company want to expand it's business and also want to sell it's
share into the market. In given context, as a business advisor, need to make a report related to
Barclays bank. Barclays bank is a UK based banking and financial institution. This company
make strategies plan to achieve goals and solve all the problems. This strategic planning helps to
achieve future goals.
Main Body
Strategic planning of Barclays bank
Strategic planning refers to a process for documentation and establishment of direction
for various small businesses. This both accesses the current as well as future aspects of business.
Strategic plan is also providing business with directions and records its mission, vision, values
each of which are short-term and long-term. When taking financial sector into context the future
of banking is completely dependent upon the development and implementation of its strategic
plan. A strategic planing process is allowing organisations to set a map for them, direct them and
provide them aims and objectives to be achieved. Every move and action that financial
institutions take are according to the strategies they have derived beforehand.
Barclays is a reliable financial organization which is innovative and always try to focus
on customer and deliver products on time (Weber, 2018). This company basically work on five
principles such as collective and individual success, talented colleagues and target to leading
position in the global financial industry by using best people policy, always try to understand
customer's needs, pioneering and trust, always try to drive new ideas and high integrity to build
the trust of customers, colleagues and stakeholders. Barclays strategic planning try to make
vision to achieve defined goals. Barclay always follow five models of strategic planning such as
vision based strategic planning model, the issue based model, scenario based model, organic
strategic model and the alignment model.
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To understand business functions , at first need to follow strategy. Barclay bank
strategies based on corporate strategy which is based on overall strategy of an organization
which have multiple business unit and operating in multiple market. So corporation strategy
useful to support and enhances the value of an organisation. Corporation build competence by
sharing technologies and resources between business units and help to develop a corporate brand.
Barclay bank also follow business unit strategy. This strategy help to stand in individual markets.
Team strategy helps in corporate and business. A team works in an organisation to work
together. All levels of strategy ensure the success of an organisation.
The challenges face by UK financial industry and the process of strategic implementation to the
selected organisation
Currently UK financial industry facing many challenges such as cybercrime in finance,
Regulatory compliance in finance, big data use in finance, AI use in finance, Fin tech disruption
of the financial service industry, customer retention, employee retention, Block chain integration,
customer experience, crossing the digital divide in financial services.
 Cybercrime in finance – Financial organisation facing cybercrime in finance. So need
some innovative solution to solve cybercrime. Distributed ledger technology( DLT),
block chain helpful to secure financial data.
 Regulatory compliance in finance - Regtech helps to solve the burden of compliance .
 Big Data use in finance -Big data provides opportunities to financial service providers.
Customer database and new feeds helps the banks yo serve better to their customer. It
helps to convert unstructured data into small useful information (West and Phillips,
2018). This technology helpful in asset management, trading, risk management and other
financial services.
 AI use in finance – AI helps to transform the financial service industry. This technology
solve some problem like automated wealth management, customer verification and open
banking services.
 Fin tech disruption of the financial service industry – It helps in financial services.
 Customer retention in the financial services industry- Need to provide products
according to customer desire. It helps to gain customer retention.
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 Employee retention in the financial service industry – Financial services need to
attract more employees. Employees now want a culture which is according to the values
and lifestyle of the employee.
 Block-chain integration in finance – Block-chain helps to solve the problem of
cybercrime. Block -chain is not suitable until it reach a tapping point in the maturity of
technology.
 Customer experience in the financial services industry – It is a main problem facing
by financial services industry.
 Crossing the digital divide in financial services marketing- Today every person
connected with social media. In the era of digitalization, an institution need to advertising
their campaigns on the digital channels.
The strategic implementation and differentiate between wholesale organisation and retail
organisation
Strategy implementation mean the execution of plans and strategies on time. It helps to achieve
long – term goals of an organisation. By using strategy implementation, organisation utilise and
improve structure, culture, resources and people and control system. Following steps must use in
strategy implementation- Building an organisation and put the strategies into the action- At first need to focus
areas and make strategies plan. After focusing all focus areas, it is easy to cover
everything. Also need to measure results of focus areas. Outline a sample to cover all
points. Follow at least one project for clarity. Make a short strategic action plan. This
outline helps to take next steps. Maintain a review process time to time. Strategies helps
to achieve the goals of an organisation in short period of time (World Bank, 2019). The
strategies into the action help to do all task step by step. Supplying resources- Supply chain is a system of producing and delivering a service.
Supply chain helps to define market and future target. Supply chain helps to utilize
resources properly on each stage and also easy to maintain record of all resources. Supply
chain helps to complete each task on step by step. Supply chain helps to supply products
on time in the market. It helps to manage an organisation in proper manner. Developing policies to encourage strategy- An organisation need to make developing
policies. Developing policies helps to analyse all steps like raw products to final product.
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All developing policies help to implement the strategy. Always make developing policies
according to the tasks need to complete. It helps to make better workplace and it is easy
to complete each strategy. Reward structure to achieve the goals- An organisation able to achieve it's goal by
motivating their staff. Always pay bonuses as employee rewards and increase according
to the performance. Reward structure motivate the employees to do more work. By this
way working efficiency of an organisation increase and also improve the quality of
services to attract more client.
 Leadership – Leadership is a process to motivate a group of people to achieve a target.
Leadership helps to perform well and linked to profit. It also helps in innovation.
Leadership based on several traits (Çipi and Pulaj, 2020). Leader helps to inspire vision
for future. It also manage delivery of the vision and build a team to achieve a target.
Leader by using his leadership skills always make a team according to the abilities of
employees. This team work in coordination to achieve a goal and it also helps to make
better relationship between the employees.
Wholesale means selling a product in bulk quantities and retail mean to sell a product
into small quantities. Wholesale and retail are main part of the supply chain. In an organisation,
the goods manufactured in large quantities and later on sell to wholesale who sells to retailer for
final sell to the customer. In this process retailer targets to final customer and sells the product.
So these two channels are intermediaries in a business.
Differentiate between wholesale banking and retail banking
 Wholesale banking mean banks which targets corporate or big customers and their focus
to provide services to corporate clients.
 Wholesale banking ticket size of loan is very high and due to this NPA is more
pronounced. In retail banking, ticket size of loans is low and NPA is less pronounced.
 Wholesale banking provides loans to industry, machinery advance, export credit. Retail
banking provides loans like car, housing, educational and personal loans.
 In retail banking, monitoring and recovery of the loan so hard if it convert into NPA but
in wholesale banking, customer base is low and it is easy to monitor the recovery of loan.
 In retail banking, cost of deposit is low because retailers don't have bargaining power but
in wholesale banking banks offer high interest rate to attracts more funds from them.
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 Retail banking need a large number of branches to attract more customer (Sodeyfi, 2016).
So in retail banking there is high operation costs. In wholesale banking, small number of
branches require to attract more customers.
Infrastructure, operation and customer expectations in financial sector
Now these days, banking is an essential part of the banking. Bank rely on technology to
maintain the client personal data and to provide them other services. IT infrastructure in financial
sector like internet banking, UPI and other services helps to improve the qualities of services in
the financial sector. This it infrastructure helps in operation and to complete customer
expectations.
The customer expectations in financial sector are and the industry is not immune to the
new demands in the industry. Expansion in big data, various financial services, social media
have successfully personalised the experience for a number of consumers. Now the consumers
can successfully use all the financial services online without actually visiting the banks
physically. Innovation in financial sector have successfully spurred the industry as a whole. This
development is also growing pressure on traditional financial institutions. Some of the major
changes and trends in financial services include the transformation of banking that is done
through digitization. Leveraging of customer data that will successfully trade its value in return
and conversational banking that is providing customers with access to a number of different
chatbots who provide business with a number of customer touchpoints. Barclays is also
successfully making use of various opportunities with the help of which their consumers can
finance assets and leverage profit from critical projects. On the other hand bank is also working
upon various methods of digitalization that have completely changed the operations in the
business. They are focusing on making work convenient for both the customers and their
employees.
Ansoff's Matrix for Barclay Bank
The Ansoff matrix refers to a strategic planning tool that is providing organisation with a
framework which is helping the managers, senior executives and marketers to choose the
strategies for future (Mujeri and Mujeri, 2020). There are four different strategies which can be
used by Barclays for their further growth and expansion as mentioned below:
Market development: There are two different ways in which Barclays can successfully use the
strategy of market development. The first strategy is entering into the new markets with a
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different geographical location. In order to do so Barclays is required to understand the region
and financial services that are taking place in those region. They are also required to study
various rates of competitors in the new market before entering into the market. The second way
in which the strategy of market development can be used by Barclays is that company is
adopting a new product or service that is only aiming at a specific segment of consumer. This
may be various luxury services which are only provided to the premium customers of the
company. This will help company to gain consumers in new market but only for certain specified
sector.
Market Penetration: This is a strategy which is used by business in order to increase the sales of
products and services in the market where they have already set up their business. They are using
various promotional tools and variety of products and services in order to penetrate in the
market. In order to dominate the market Barclay's can successfully develop more personalised
services for all their consumers. It is necessary that the organisation is working in the current
market segment providing their consumers with a number of different services along with
opening various branches to make the work more convenient. They need to ensure that the
customer services provided by them are satisfying their current consumers successfully. They
can also enter into strategic alliance with different organisations in order to motivate them to use
the services that are provided by Barclays. These may include fund management, services for
assets and wealth. All these steps will help Barclays to earn more profits from the market they
are already operating in.
Product Development: This is the strategy in which organisation will successfully provide the
customers in present market with some new product or service. It is necessary Barclays is
successfully promoting all the new product and services that they have introduced in market.
This may also include bringing any change in the already existing services as it gives birth to a
totally new product or service (Potgieter and Mawande, 2017). Barclays bank can take an effort
to encourage the parents so that they open bank account of their children which will be beneficial
for their future. The account of parents are already attached with the bank and the bank is only
making slight changes here. Even though they are serving to the same consumers but it contains
product development strategy as changes in their products ans services provided to consumers is
taking place here.
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Diversification: Diversification is another method in which huge market research is required by
organisation as they entering into a totally new market with a totally new product or service.
Barclays bank have already diversified horizontally into a number of different financial
segments. They can also diversify vertically providing their consumers with various services
other than the banking one. They can also go into various sectors like auto mobiles, retailing,
media and printing which will help them to enhance their business. However huge risk is
involved in this strategy along with huge requirement of capital.
Conclusion
With the help of above report it can be concluded that strategic planning is an essential
part in every business. Along with a proper strategic plan business can gain all the opportunities
coming their way. Financial institutions also require strategic planning so that they can grow
achieving all their aims and objectives. Their are a number of development seen in financial
sector due to change in infrastructure and use of digitalisation. There are also various strategies
mentioned in Ansoff's matrix that is allowing businesses to develop and grow further to achieve
all their aims and objectives.
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References
Books and Journals
Das, S., Nayyar, A. and Singh, I., 2019. An assessment of forerunners for customer loyalty in
the selected financial sector by SEM approach toward their effect on business. Data
Technologies and Applications.
Weber, O., 2018. Financial Sector Sustainability Regulations and Voluntary Codes of Conduct:
Do They Help to Create a More Sustainable Financial System?. In Designing a
Sustainable Financial System (pp. 383-404). Palgrave Macmillan, Cham.
West, M. and Phillips, D., 2018. Exploring the future of Business Information Services in the
financial sector. Business Information Review, 35(1), pp.12-16.
World Bank, 2019. Ethiopia Financial Sector Development: The Path to an Efficient Stable and
Inclusive Financial Sector. World Bank.
Çipi, A. and Pulaj, E., 2020. A Delphi-based study on the innovation practices in the Albanian
financial sector. International Journal of Information Technology and
Management, 19(1), pp.19-32.
Sodeyfi, S., 2016. Review of literature on the nexus of financial leverage, product quality, &
business conditions. Journal of Economic & Management Perspectives, 10(2), pp.146-
150.
Mujeri, M.K. and Mujeri, N., 2020. Financial-Real Sector Nexus. In Bangladesh at Fifty (pp.
493-534). Palgrave Macmillan, Cham.
Potgieter, I.L. and Mawande, L., 2017. Self-esteem, employability attributes, and retention
factors of employees within the financial sector. Journal of Psychology in Africa, 27(5),
pp.393-399.
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