Business Strategy: Lloyds Bank Analysis with PESTLE, SWOT, VRIO Model

This report provides a comprehensive analysis of Lloyds Bank's business strategy using various frameworks and models. It begins with a PESTLE analysis to evaluate the macro-environmental factors affecting the bank, including political, economic, social, technological, legal, and environmental influences. Subsequently, a SWOT analysis identifies the bank's internal strengths and weaknesses, as well as external opportunities and threats. The report also employs the VRIO framework to assess the bank's resources and capabilities in terms of value, rarity, imitability, and organization. Furthermore, Porter's Five Forces model is applied to understand the competitive forces within the UK's financial sector. The analysis culminates in strategic recommendations aimed at enhancing Lloyds Bank's competitive edge and achieving sustainable growth. This document is available on Desklib, a platform offering a wealth of study resources for students.

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Application of Pestle framework to know the influences of macro environment factors.3
M1. Critique the factors in macro business environment.......................................................5
TASK 2............................................................................................................................................5
P2. Application of SWOT and VRIO analysis.......................................................................5
M2. Review the internal environment factors and capabilities..............................................8
TASK 3............................................................................................................................................8
P3. Porter's five forces............................................................................................................8
M3. Contrive relevant plans and tactics to enhance competitive edge...................................9
TASK 4............................................................................................................................................9
P4. Application of different models and concepts..................................................................9
M4. Make suitable business strategic plan...........................................................................10
D1. Review and interpret the data........................................................................................12
CONCLUSION .............................................................................................................................12
REFERNCES:................................................................................................................................13
Books and Journals:..............................................................................................................13

INTRODUCTION
Business strategy is essential for any form of business entity as it helps in attaining
business goals and also beneficial in seeking growth and development strategically. Business
strategy represents as a clear and defined sets of plans, goals and actions that shows how a
company will position itself in the target market with its products and services. It contains
number of factors such as market competitors, macro and micro business environment,
organisational structure and many more. It is important that business strategy should be flexible
in nature so as to handle change (Liu and Kong, 2021). This report considers the company named
Lloyds Bank which is a retail and commercial bank in British Administration. It is considered as
the oldest and largest British retail bank and has an extended network of branches and ATMs in
United Kingdom. John Taylor and Sampson Lloyd were announced the company in 1765. It is
headquartered in London, United Kingdom. The key services are banking and insurance. The
current report outlines several concepts and frameworks such as PESTLE, SWOT, VRIO
analysis to analyse the macro and micro environment of business. Porter's five forces is a part of
this report so as to measure the competitive forces of specified market. At the end, there is range
of models, theories and approaches to understand and invent strategic planning for the certain
organisation.
TASK 1
P1. Application of Pestle framework to know the influences of macro environment factors.
PESTLE analysis is used to analyse the different factors including political, economic,
social, technological, environmental and legal factors. Lloyds Bank exploits this framework to
know the influences of each factor in identifying external opportunities and threats. The
analysation of all such factors in company's context are discussed below:
 Political factors: This element contains different influences such as political stabilities,
trade restrictions, labour laws, tariffs and many more. The government laws in UK may
affect the state of the banking sector. The UK government can interact in the matters of
the banking and insurance (Ricci and et.al., 2021). Brexit is one of the examples that
impacts the functioning of business in UK. Due to Brexit, there is an announcement of
some trade restrictions and change in import and export policies that affects the business

of Lloyds Banks. On the other side, the political conditions of UK are stable which
delivers positive impact on the business to grab growth and expansion opportunities.
 Economic factors: It contains labour market conditions, saving rates, inflation rates,
inflation rates, foreign exchange rates, saving rates and many more. The economic
growth and development highly influences the performance of businesses in any sector.
In addition to Lloyds, the company must analyse the labour market conditions in order to
know how to attract right candidates to the business (Gray and et.al., 2020). UK is one of
the countries where the population is highly educated and skilled to get a certain job or
work. Due to Covid-19, the business has lost many loyal and qualified employees in the
times of global pandemic due to which it suffered losses as well. Therefore, to retain and
attract new employees, a good research should be done by the experts.
 Social factors: This factor is based on the tastes and preferences, cultural beliefs,
religion, values and many other factors. In addition with Lloyds, due to Covid-19, many
people have lost their jobs and almost they income gets reduced due to which it impacts
on their savings and deposits (Del Giudice and et.al., 2021). Their spending patterns also
gets changed such as they use online modes of payments for any transactions. They
exploits debit or credit cards, net-banking, online payments and many more. They mould
themselves from classical modes of payments.
 Technological factors: It includes technological upgradation, advancement and
innovation in the business processes. Technologies has changed the way of handling
funds by the customers and clients (Thomas and et.al., 2021). Many banks such as Lloyds
Bank facilitates customers with their mobile banking system to witness accounts, pays
bills on smart phones, transfer and receive funds and many more.
 Legal factors: It is important for the banking companies to follow different laws and
legislations regarding trade structures, consumer laws, privacy laws and many more to
confirm frameworks within the sector. These laws have to be followed by the chosen
company in order to protect itself from any bad implications that affects its reputation and
goodwill.
 Environmental factors: This factor deals with the growing awareness with climatic
conditions and environmental consciousness. It involves several environmental laws,
regulations and standards vary throughout different markets. In case of chosen company,

through latest technologies, especially with the mobile banking applications and net-
banking, the use of paper is being mitigated. Also, many queries and issues are taken care
of via online banking systems and mobile apps. Clients can also apply for debit cards,
credit cards, cheque books and more without having a physical appearances in banks.
These kind of initiatives have been made by the organisation to improve the contactless
activities which saves environment in terms of money, pollution and health.
It has been critically analysed from the pestle framework is that different factors delivers
different impacts on the company. It can be positive and negative in terms. All such factors
delivers opportunities and threats to the respective banking group. It is important for the business
managers to evaluate each of the impacts and influences on the business to grab opportunities
and combat threats. With an intent to make successful strategic decisions for the chosen
organisation, the influences must be analysed to create growth opportunities for the expansion.
TASK 2
P2. Application of SWOT and VRIO analysis.
SWOT analysis is a fundamental strategical planning tool that can be exploited by the
Lloyds Company managers to conduct a situational analysis of the organisation (Hajizadeh,
2019). This is a beneficial technique to measure the existing strengths, weaknesses, opportunities
and threats. The discussion is below in company's context:
Strengths  The company holds a strong market position in the financial
services industry of UK. It is a leading retail banking organisation
in the nation, with competitive edge and market leading position in
current accounts, residential mortgages, saving accounts and
unsecured lending. It is also a leading credit issuer (Hajizadeh,
2019).
 The liquidity of group is advised to be capable and its capital
strength is reasoned to be strong. The customer deposits in bank
remain strongest and most stable.
Weaknesses  This banking group is facing some issues related with vital
declension in its assets quality. It led to clear rise in provision for
loans and accordingly influenced the profitability of Lloyds Group.

 The exposure of Banking group to the domestic nation that is UK is
comparable high (Gkoltsiou and Mougiakou, 2021). Unlike, the
other competitors of world-wide banking services in the country
such as HSBC, Royal Bank of Scotland as well as Barclays.
Opportunities  New clients and customers from online channel as the banking
group have made a significant investment into the online platforms.
 The use of latest technologies facilitates an opportunity to practice
diverse pricing tactic in some new marketplace.
Threats  Highly competitive environment which covers various major
players such as HSBC, Royal Bank of Scotland and many more.
 The other threat is rapid change in government regulations and
fluctuations in market conditions.
VRIO analysis helps business organisation to understand the four prime attributes which
supports the company to attain competitive benefits. It covers valuable, rare, imitable and
organisation. Hence, there must be some capabilities and resources in a business that can offer
the competitive benefits to the chosen banking group. In case of Lloyds Bank, the VRIO analysis
of the company is discussed underneath:
Valuable: It is essential that the organisation must have sufficient resources, together
with strategies to utilise the available resources while overcoming threats. If the organisation
holds some worth then the solvent is yes. Resources are valuable if the company indulge the
level of customer satisfaction while boosting their value. It may be beneficial in creating
differentiation current services or reduce its price. If these conditions are not matched, then it
may lead to bigger lose of competitive benefits. Hence, it is important to endlessly review the
given bank; resources and activities values.
Rare: The resources of the given organisation that are not exploited by any other
organisations can be meant as rare. Valuable and rare resources delivers much competitive
benefits to the company. Nonetheless, when more than one few organisations utilizes the same
resources while competitive parity are also named as rare resources. Even though, the

competitive parity is not the craved point, but the organisation should not lose its valuable
resources, even they are ordinary (Schweizer and Koscher, 2021).
Costly to imitate: The resources are imitable, if other companies unable to imitate them.
Nonetheless, imitation has two methods. The first methods is to duplicate the direct imitation,
while other is alternating the imitation. Any organisation who has rare and valuable resources are
costly to imitate (Bonsu, S., 2019). They already attained their competitive advantage. It is
essential that the resources should be non-sustainable. This is because it has social complexity,
casual ambinguity and historical conditions.
Organised to capture value: Resources itself can't cater competitive benefits until it is
fully organised and use to do so. For the respective company, it becomes essential to organise its
management systems, policies, processes and strategies to completely exploit the resource's
latent to be rare, valuable and costly to imitate.
Resources Value Rare Imitation Organisation Competitive
benefits
Successful
implementatio
n of digital
strategies
Yes No It is imitable
by rivalries.
One of key
players in the
sector.
It cannot cater
sustainable
competitive
benefits.
Opportunities
in adjacent
industries and
new resources
needed to
enter such
sectors.
Yes No It is imitable
by
competitors.
It is vitally
organised.
It has
potential.
Product
portfolio and
synergy
among
different
Yes No Competitors
can imitate
this.
The company
has utilised it
to good effect.
It can cater
short term
competitive
benefits.

product lines
M2. Review the internal environment factors and capabilities.
TASK 3
P3. Porter's five forces.
Porter's five forces model is a useful model to identify the growth and expansion
opportunities and threats. It supports the organisation to ascertain the level of industrial
competition and detailed analysis so that the firm can restructure its tactics and approaches. In
UK, the Lloyds Bank is running in competitive market, hence, this framework aids the bank in
analysis. In context of Lloyds Bank, the five force model is applied below:
 Bargaining power of buyers: The high negotiating power of customers is not beneficial
for any sector or industry as they have direct influence on the set prices by the firms.
Price sensitivity is crucial for any organisations that represents the profitability of the
organisation (Wellner and Lakotta, 2020). Nevertheless, the respective bank has low
bargaining power of its customers as there is high switching costs. In UK, many of the
customers do not willing to switch their banks. Also, high level of loyalty among
customers enables the firm to charge fair prices while maintaining the quality of services.
 Bargaining power of suppliers: It is quite fundamental to manage the threat of high
bargaining power of suppliers. In UK's financial sector, the negotiating power of
suppliers is high and it influences the profitability of the banks. Lloyds Bank have to bear
high costs for the resources and other inputs while boosting the base of suppliers (Chen,
and Cheng, 2019). The bank should focus on the innovation strategies as high charges for
various services and products attract the customers. It benefits in paying high costs to
vendors.
 Threats of new entrants: In case of Lloyds Bank, the threat of new entrants is low as the
growth of financial sector is slow in UK. The fall in the profitability level also discourage
the new entrants. The top leading banks are HSBC, Bank of Scotland, Lloyds Bank and
Barclays. These are known as the big giants and vie with each other on high level. Also,
the bank has high level of customer loyalty.

 Threats of substitutes: There are many threats from alternatives in every massive and
small sector as organisations view to fulfil the consumer needs. The respective bank has
low threats of substitutes due to its undifferentiated services and products. The banks that
caters the prime threat the Lloyds Bank is able to form brand image and strong customer
base in the financial sector. It is paying attention to the innovation so as to gain customer
attention. Additionally, the switching cost is high which unable consumer to switch to
other substitutes (Beer, 2020).
 Competition: Even the banking line in UK is amalgamated, Lloyds Bank faces high
level of competition from direct and indirect financial providers or competitors. Direct
competitors are HSBC, Barclaysm Bank of Scotland and many more. Indirect
competitors are financial providers are Co-operative Bank, Sainsbury or TESCO. It may
also outspread to online payment methods such as Paypal. Moreover, the exit barriers are
also high in the industry which says competitors can't leave the sector very easily.
M3. Contrive relevant plans and tactics to enhance competitive edge.
The Ansoff Matrix is a beneficial framework to analyse and plan tactics for growth and
development (Saragih and Sinaga, 2019). It is contained with four key strategies that can be
exploited by Lloyds Bank to grow while analysing the risks connected with each strategy.
 Market penetration: This strategy mainly focuses on rising the sales of present products
or services to a present marketplace.
 Product development: This strategy aims to increase the portfolio of current goods and
services while offering them in the current marketplace.
 Market development: This is the plan in which company tend to increase its market
share or entering into new marketplace while offering current goods and services.
 Diversification: This is the strategy in which the firm is entering into new market with
new offerings of its goods and services.
From the above mentioned plans or strategies, the market development strategy can be
beneficial for the Lloyds Bank as it is a player in its current services and products and expanding
market will help in grabbing growth opportunities (Martin, 2021). It needs to identify the right
marketplace to expand the business. Also, it may expand nationally or internationally.

TASK 4
P4. Application of different models and concepts.
The Porter's generic strategies can be exploited to ascertain the strategy or direction of the
organisation. It involves main four direction or strategies that an organisation can opt from. He
stated that the firm must select a right course of action with an intent to beat the competition
(Greckhamer and Gur, 2021). In addition to Lloyds Bank, the discussion on four strategies are as
follows:
1. Cost leadership strategy: With the help of this strategy, the firm is going for a broad
target market while serving services at lowest price possible (Bekhradinasab, 2020).
Through this direction, the company can become a cost leader by opting large market by
keeping costs as low as possible, or, it can expand market share with average prices. The
main focus is on internal processes.
2. Differentiation: With this strategy, the company is acquiring broader target market with
its unique featured or differentiated products or services. It is beneficial to make
products or services as exclusive as possible. It helps in making it more attractive that
comparable services served by the rivalries (Rashidirad and Salimian, 2020). It needs a
good conduct of research, innovation, apart from this, an ability to offer the high quality
goods.
3. Cost focus: The company target a niche market where competition is little and the
market is highly focused, while offering the lowest price possible. With the such plan,
the respective bank can opt a clear niche market and with right understanding the
kinetics of such segments of marketplaces and desires of customers, the Lloyds can
ensure that the costs remain low.
4. Differentiation focus: Selecting the differentiation focus strategy, the firm target a niche
market and he product or service has differentiated traits (Memon, Afshan and Memon,
2021). This direction often contains strong brand loyalty among customers.
By analysing all of the above strategies, the company can go for cost leadership strategy
by targeting broader group of customers. Customers are always desire to have high quality
services with lowest price possible. Lloyds bank can reduce its interest charges on its services
while attracting customers in larger target market.

M4. Make suitable business strategic plan.
Strategic plan for the Lloyds Bank:
Vision: To cater a secure, nimble, conducive and dynamic banking environment to
clients with unshaken confidence and commitment to values, deploying the best technologies
where client suitability is of the topmost value while increasing the value of stakeholders.
Mission: To attract deposits and growing to attain the best financial returns for depositors
and shareholders.
Objectives: The key goal is to serve unique and differentiated services while helping
customers even in times of global pandemic. Also, to be one of the pleasing places for the
workers where they can develop themselves individually.
Strategies: The market development strategy is suggested to Lloyds Bank to gain larger
customer base while booming its market share.
Tactics: It can be delineated by the business efforts in order to accomplish its business
aspirations. For such intent, the marketing mix of the company is as follows:
 Product: It has diversified product portfolio which covers savings, current account,
private banking, credit cards, ISAs, mortgages, loans, car finances, travel services, share
dealing and many more.
 Place: It covers both national and international places. It also offer services in Frankfurt,
Paris and Amsterdam.
 Price: The pricing strategy for the Lloyds Bank is valued based pricing as the firm
believes that the value of is most fundamental driving force as it concentrates on the price
that the prospect customers are willing to pay to get benefits. Also, it offers diversified
pricing range by catering both low and high prices depending on the kind of services and
goods.
 Promotion: It keeps it brand image by coming up with diverse advertisements to
promote their offerings among target masses.
Implementation: This strategic plan is created for better exploitation and allocation of
resources, involving human or financial resources. Employees and workers are directed to
accomplish the desired objectives and goals. Also, by consulting with research and development,
the company may know where the expand the business in a right way. KPI is beneficial to
evaluate the performance and results.

Evaluation: It addresses the data collection, together with making up the strategical plan.
The prime focus is on the problems that comes in the route of accomplishment of objectives. It is
essential to compare the actual results with desired results so that the gaps can be filled.
D1. Review and interpret the data.
It is reviewed that the organisation can focus on different models and concepts to get the
information and data about different factors exist in the business environment. These information
of different internal and external factors helps in making the right strategical plan for the
business Lloyds Company. Such analysis supports business manager to make the right decisions
that helps company to grow, expand while improving brand image (Hong, 2020). Hence, there is
a need to understand both positive and negative influences on the brand so that the firm can use
opportunities and combat threats effectively.
CONCLUSION
From the above report, the conclusion is that business strategy is covered with different
frameworks, concepts and models that helps business corporations to know the impacts on their
business and on its profitability. Internal factors influences are realised with the help of SWOT
and VRIO frameworks while PESTLE helps to know the impact of extrinsic factors. The
company's market position can be acknowledged with the help of Porter's five force model.
Company can also use different expansion strategy with the help of Ansoff Matrix. At the end,
Porter's generic method is outlined.

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