Business Strategy Report: Business Strategy in Financial Industry

This report provides a comprehensive analysis of business strategy within the financial industry, focusing on Deloitte as a case study. It begins with an introduction to strategic planning, emphasizing its importance in achieving organizational objectives. The report then identifies key challenges faced by financial institutions in the UK, including consumer expectations, competition, investor expectations, and regulatory conditions. Furthermore, it differentiates between wholesale and retail banking, highlighting their distinct characteristics, products, profitability, and operational structures. The report also evaluates the effectiveness of strategic options using the Ansoff matrix, exploring market penetration and market development strategies. The analysis provides valuable insights into strategic planning and implementation within the financial sector.

Business strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
1.Strategic planning in context of the financial industry:............................................................3
2.Challenges faced by the financial industries in UK:................................................................4
3. Strategic implementation and differentiation between wholesale and retail organisation......5
4.Evaluate the effectiveness and application of strategic option.................................................6
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1
1

INTRODUCTION
Business strategy is basically a long-term planning executed by the management personals
in order to acquire futuristic objectives and targets of the organisation. This strategy includes the
products and services company planning to offer, short- term and long-term objectives, the kind
of target market or customers they wanted to cater. This report will conduct a detailed study on
Deloitte. The Deloitte TT limited was founded in 1845 with its origin in London, UNITED
KINGDOM. It is a multinational company dealing in specialised service sector. They provide
various services like auditing, risk and financial advisory, consultation, tax and lawful services.
This following report will define the strategic planning’s followed in a financial industry. Further
it will also identify various challenges which a monetary institution in UK have to face. It will
also describe the different strategies implemented in wholesale and retail banking and
differentiate them on that basis. Lastly the research will critically evaluate the applications of
tactical models to the retail industry.
1.Strategic planning in context of the financial industry:
Business planning is the procedure of development a direction for business and will help to
identify the long term and short-term objectives. This planning process also helps to monitor the
mission and objectives of the enterprise and identifying the tools and techniques to achieve them.
Managing budget statement, assets sheet and bankbook planning is a complex process but it has
to be carried out to manage risk management of interest rates and wealth management
(Alstadheim, 2020). Technological advancement preparation is very essential for banks varies
from small scale to large scale as mobile banking and safety & security of data is becoming
important. Lastly, the merger and amalgamation planning prioritised by the management of
financial enterprises. Different activities will be implanted in the organization like, tactical,
technological, Mergers and acquisition and finance planning.
Mergers and acquisitions planning: The M&A planning prove is important for every scale size
firms and plays a key role in financing strategic plans. The financial services have experienced
significant integration. Through this process the biggest companies like Deloitte have grown
bigger. The association is very obvious in city areas and small size market. Banks with high asset
values take part in attainments, in most of the acquisitions, such banks will act as buyers.
2

Amalgamation planning should essentially be the part of tactical development progression. This
will determine Who can merge with you? Who can acquire you?
Technology planning: It does not matter whether the bank is private or corporate adapting
technological advancement is necessary. Technology will provide an insight of how a company
uses or utilize technological support in corporation activities (Fernandes and Pinto, 2019). It
includes, what are the needs of customers in mobile and internet banking services? Protection
and safety of customers personal data?
Capital Planning: This planning process will determine how a firm can manage their annual
report. In Deloitte they emphasise on investment plan which is required to be updated on a
timely basis to acquiescence with fresh aimed wealth stages and fulfil organisational needs.
Understanding of these guidelines are essential to have a better understanding of the asset and
liabilities and commercial plan, for the clienteles and shareholders companies cater to (Steiner,
2010).
Strategic planning: An efficient Strategic Plan will result in overall success. The Mission and
Vision are more permanent, but the strategy will be modified and revised on continue basis. The
exact thing will be implicated for the long term and short-term goals as well. Through this
planning procedure it will enable to identify the major initiatives to be taken (Gertler, Kiyotaki
and Prestipino, 2016).
2.Challenges faced by the financial industries in UK:
The banking industries are facing extraordinary revolution as it moving or growing
forward. Most of the financial firms have adapted the high-tech uprising, but there are still many
challenges present in the market which need to overcome. The banking establishments will need
new and innovative ideas and methods for accomplishment. Now a day’s customer expects faster
accessibility and better results (Bryson, Edwards and Van Slyke, 2018). Financial institutions
which fails or left behind to maintain the pace with the ever-changing environment and
competition will suffer in the long run. The banking industry facing challenges in numerous
ways, they are discussed below.
Consumer expectations: Deloitte TT are finding it hard to maintain balance with the client’s
expectations. Traditional banking institutions are struggling really hard to deliver the services
which were demanded by the customers specifically in regards with technology. For example, A
3

large percentage of customers are using mobile banking and internet banking for transactions. A
research was conducted and it was found that banking clienteles use smartphones or other
electronic devices for banking, but they also expect good personal customer handling when they
physically visit their bank branches.
Increasing pressure from competition: Consumers are ready to experiment or make changes
with their monetary facilities provider. Currently there are many firms entering in the finance
market and people are switching to them as they brink new technologically advanced and
innovative ideas (Melecky and Podpiera, 2018). Deloitte have less complicated procedures and
good return on investment or interest rates. This is the main reason people deviate from
traditional banking facilities to these modern monetary firms.
Investor expectations: As mentioned in the above point entering of new competition in the
market, investors’ expectations are fluctuating rapidly. This will make it difficult for the
conventional establishments, which leads to lowering down the participation of new investors
and preventing the turnover of existing shareholders (Okpebholo and Sheikh, 2020).
Regulatory conditions: Protocols in the financial service area are deteriorating, which compels
the banks to invest a large ratio of their personal budget. Establishing and efficient system which
is eligible to maintain a balance with the guidelines and standards necessitate resources.
Traditional banks were facing such kind of extreme challenges, which leads them to push harder
to evolve, modify and improve their functions to keep up the leap with the continuously
changing buyer and investor outlooks. Financial companies are struggling to identify the aspects
which ensure them to acquire sustainable progress (Visco, 2018). Investment and economic
service area enterprises are required to develop an efficient tactic which help them to enhance the
cliental involvement.
3. Strategic implementation and differentiation between wholesale and retail organisation
Traditionally banking referred to a place where people can withdraw and deposit their cash
and take credit when they need capital. Nowadays financial services have completed change
from what they were before. Retail and wholesale banking are biggest example of that, the
differences between retail and wholesale banking are mentioned below:
Characteristics of retail banking: They have numerous networks of distribution which include
branches, through online websites, portals and mobile applications, customer service call centers
4

and kiosks etc. They also have a large no. of customers groups like, individual customers,
household or domestic customers, SME’s etc.
Characteristics of corporate banking: The services provided by such banking institutions are
facilitating deposits, credit facilities, email banking, trading and investing financing and loaning,
term lending’s and guarantees of bank. They also provide customised services for large
institutions and multinational companies. Some of those services are, capital and investment
management, international dealings, stakeholder’s management, financing large scale projects,
consultation services etc.
Definition: Retail banks refers to the type of banking services which caters to individuals and
their main concern is acquiring retail consumers. On the other side wholesale banking targets big
or high-profile business customers and providing efficient services to commercial consumers.
Products: Private customer banks provide a wide range of services which includes, deposit
accounts, vehicle, housing loans, loans against property, insurances, credit facilities and
stockholding services etc. products and services offered by commercial banks are trading,
industry, import, business, equipment funding loans (Gomera, Chinyamurindi and Mishi, 2018).
In Private banking, standardized services and products are presented to their potential consumers
these commodities and services are also termed as off-the-shelf. On the contrary commercial
banking, tends to modify and tailor their products and facilities, in accordance with the
preferences of the clients.
Profitability: In terms of profit corporate banks turn out to be more profitable in contrast the
private cliental banks.
Ticket Size of Loan: The size tickets provided for loans is low due the effect of Non-performing
assets in retail banking in comparison with wholesale banking whose ticket size is high and due
to distinct influence of NPA. For example: Car loans, education, personal, housing loans are
provided by retail banks whereas big loans like industry, equipment, import and export loans
were offered by corporate banks.
5

Monitoring and Recovery: It is quite difficult to do recovery and observation in private banking
sector as their customer base is very wide but as corporate banks caters to only commercial and
business people their client ratio is comparatively small so this makes it easy for them to do
recovery and monitoring procedures efficiently (Kosiba, J.P.B., and et. al., 2018).
Interest Rates: The depository cost is minimum because their consumers don’t have to liberty or
to bargain as they have less deposits in banks but the customer base of wholesale banks have
opportunity to ask for high interest rates as they deposit very large amount of capitals and funds.
Operational Costs: The overall operational cost incurred in the establishment of private
financing firms is very high as they have to set up various branches in distinct location to acquire
and to reach large number of clients. It is totally opposite in the case of commercial financers as
they operate from their main branches and those are sufficient to supply services to their cliental
base.
As this is clearly evaluated from the above detailed implementation that there is a vast difference
between retail and wholesale banking which is the reason banks are establishing separate
branches in accordance with their business.
4.Evaluate the effectiveness and application of strategic option
The evaluation of the effectiveness of applying strategic options are done by implementing
Ansoff matrix. The Matrix is a business tool which is used to develop advanced techniques to
nurture. It is basically separated into four factors which focus on understanding the need and
tactics of marketing new and existing products to current market.
Figure 1 Ansoff's model
Source: Strategic Growth with the Ansoff Matrix. 2019
6

Market Penetration: This strategy is proved to be less risky for financial sector. The products
offered by this industry are ranging from mutual funds, investments, insurance, sip and
retirement plans etc. It is identified that the customers are ignorant about the variety of products
and services this institution is offering (Le, 2017). It is beneficial for the enterprise to get in
contact with their existing customer base and identify if there is anything which company can
offer them for good and also turn out to be beneficial for the clients. Penetrating in the market
basically involves meeting with their already retained potential customers and collect feedback
from them, on the basis of their queries company can also suggest them new offerings or services
which will be helpful. One of the basic approaches in banking is to upsurge shareholders on the
other hand the available products were presented to potential and present clienteles for buyers’
market and for collective customer share. Current markets are also known as domestic markets.
It is a comparatively near to the ground risk approach as the demographic and psychographic
features of consumers are well understood by the financial personals (Ojha, Patel and Sridharan,
2020).
Market Development: This is comparatively dicier policy than developing a new product.
Marketers finds it more difficult to launch existing product to new customer than developing new
products and services for current market. This is a skilful progress plan, that effectively
established on market segment. This corporation have two choices in terms of market
development which are, establishing or opening new offices in different locations or cities, or
they can target a particular age group of people most probably the youngsters. Enterprises need
to target young generation because they are technologically advanced and are more adaptable to
change. They also want services which are time efficient and equipped with latest modifications
(Pousttchi and Dehnert, 2018). This will helpful for the organisations because if they succeed in
convincing the youth, they automatically influence their parents and elders into it.
Product Development: This particular strategy objective is to offer new products to possessed
market sectors. It is proved to be good when the clients kept a long-term relation with banks, it
will be beneficial for both the financial personals and the customers to understand the changing
needs at different stages and fulfilling those wants as per their demands. This tactic has medium
risk because the main focus is on current marketplace. They can also make some changes and
modify their current product to compete in the competitive market and also meet the needs of
7

their consumers (Rushchyshyn, Nikonenko and Kostak, 2017). Deloitte introduced a latest
benefit for their clients which include paid consultation services and also offer house finances
etc.
Diversification: This strategy is considered the riskiest, because diversification refers to offering
new latest services and products in the fresh and completely new market. This will consist a high
percentage of risk that weather or not that product will be welcomed or does it fulfil the need of
the consumers. It is clearly dangerous than the market development process. One of the positive
sides of this approach is that companies have an opportunity to acquire new customers those who
are not familiar with their firm so the marketers can attract them by acknowledge them with all
the benefits, facilities and products provided (Sapir, Schoenmaker and Véron, 2017). For
example, if some person wanted to take housing or car loan and approach their office to get
information, so it will be an advantage for the officials to provide them good customer service
and while in the process can also offer them or advise them the other financial products offered
by the company as well.
CONCLUSION
The above report examines the strategic planning procedures implementation on the banking
sector industry, it is understood by the report that the financial performance is the base of any
organisations success and this gave a different level of meaning to the role of strategic planning
in the business. It has also identified the challenges which Deloitte have faced while establishing
as a banking firm. Further it analysed the various difference between the private banking and
wholesale banking industries. Lastly the research evaluated the strategic option through Ansoff’s
model and also explains its effectiveness and applications.
8

REFERENCES
Books and journals
Alstadheim, R., 2020. Banks’ wholesale funding share as an indicator of financial vulnerability.
Bryson, J.M., Edwards, L.H. and Van Slyke, D.M., 2018. Getting strategic about strategic
planning research.
Fernandes, T. and Pinto, T., 2019. Relationship quality determinants and outcomes in retail
banking services: The role of customer experience. Journal of Retailing and
Consumer Services. 50. pp.30-41.
Gertler, M., Kiyotaki, N. and Prestipino, A., 2016. Wholesale banking and bank runs in
macroeconomic modeling of financial crises. In Handbook of
Macroeconomics (Vol. 2. pp. 1345-1425). Elsevier.
Gomera, S., Chinyamurindi, W.T. and Mishi, S., 2018. Relationship between strategic planning
and financial performance: The case of small, micro-and medium-scale businesses
in the Buffalo City Metropolitan. South African Journal of Economic and
Management Sciences. 21(1). pp.1-9.
Kosiba, J.P.B., and et. al., 2018. Examining customer engagement and brand loyalty in retail
banking. International Journal of Retail & Distribution Management.
Le, T., 2017. Developing Service Quality Measurement Approach for Wholesale Banking
Operation Unit of a Bank.
Melecky, M. and Podpiera, A.M., 2018. Financial sector strategies and financial sector outcomes:
do the strategies perform?. The World Bank.
Ojha, D., Patel, P.C. and Sridharan, S.V., 2020. Dynamic strategic planning and firm competitive
performance: A conceptualization and an empirical test. International Journal of
Production Economics. 222. p.107509.
Okpebholo, E. and Sheikh, A.Z., 2020. Optimization of non-monetary reward provisions:
Evidence from the UK banking sector. IBA Business Review. 15(1).
Pousttchi, K. and Dehnert, M., 2018. Exploring the digitalization impact on consumer decision-
making in retail banking. Electronic Markets. 28(3). pp.265-286.
Rushchyshyn, N., Nikonenko, U. and Kostak, Z., 2017. Formation of financial security of the
enterprise based on strategic planning. Baltic Journal of Economic Studies. 3(4).
Sapir, A., Schoenmaker, D. and Véron, N., 2017. Making the best of Brexit for the EU27.
financial system.
Steiner, G.A., 2010. Strategic planning. Simon and Schuster.
Visco, I., 2018. Banks and finance after the crisis: Lessons and challenges. PSL Quarterly
Review. 71(286).
9

Online
Strategic Growth with the Ansoff Matrix, 2019 [Online]. Available through:
< https://www.tractionwise.com/en/magazine/ansoff-matrix-growth/ >
10