A Detailed Analysis of Global Corporate Strategy: Lloyds Banking Group

This report provides a comprehensive analysis of Lloyds Banking Group's global corporate strategy, examining its competitiveness within the financial services industry. The report delves into key strategic issues, including the impact of globalization, opportunities and threats faced by the company, and the bargaining power of financial service providers. It explores the role of e-banking, strategic alliances, mergers, and acquisitions in enhancing digital capabilities. Furthermore, the report addresses corporate governance, CSR, and leadership, alongside a personal reflection on the learning experience. The report concludes with an overview of customer needs and requirements in the global financial services industry, offering insights into how Lloyds Banking Group can adapt and succeed in a dynamic market. The report is structured to provide a clear understanding of the challenges and opportunities in the global financial services sector.

Global Corporate Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1 FIRM'S COMPETITIVENESS IN THE GLOBAL FINANCIAL SERVICES
INDUSTRY.....................................................................................................................................1
TASK 2 E-BANKING- THE ROLE OF ALLIANCES, MERGERS AND ACQUISITIONS......6
TASK 3 CORPORATE GOVERNANCE, CSR, LEADERSHIP AND COMPETITIVENESS....8
TASK 4 PERSONAL REFLECTIONS ON LEARNING AND OVERALL REPORT
PRESENTATION..........................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

ILLUSTRATION INDEX
Illustration 1: Most preferred methods of banking..........................................................................5

INTRODUCTION
In the era of globalization, it is essential for businesses to obtain international expansion
by adopting effectual strategy. However, if business is still focusing on local markets then it is
significant for them to target outside home market i.e. called global marketing. Moreover,
international corporate strategy requires business to coordinate their product and pricing
strategies across international markets and thus achieve customer satisfaction. Also, business is
required to focus on competitor’s marketing and sales strategy with the aim to overcome it and
target both domestic and international clients (Hillier, Grinblatt and Titman, 2011).
The purpose of the report is to develop knowledge and skills regarding understanding the
key strategic issues in regard to Global Financial Services Industry. Therefore, Lloyds Banking
Group had been undertaken which is a leading financial service provider to both individual and
business clients within UK (Peng, 2013). The main business activities of organization is retail
and commercial banking, general insurance and long term savings etc.
TASK 1 FIRM'S COMPETITIVENESS IN THE GLOBAL FINANCIAL
SERVICES INDUSTRY
Through reviewing the annual report of Lloyd Banking Group 2014 it can be assessed
that, main aim of business is to become the best bank for both individual and business customers.
They are serving around 25 million customers in UK. However, business faces tough
competition from other similar financial services providing industry such as Citigroup and ICBC.
It can be ascertained that as compared to such industry business is heavily involved in providing
retail and commercial finance and investments to individual and business customers. By
adopting effectual global corporate strategy, it assists Lloyd Banking Group to provide effectual
financial services and satisfy requirements of clients. Businesses such as Lloyds (Park, 2014),
Citigroup and ICBC faces serious competitiveness
Globalization can be stated as the way through which businesses expand its operations
within different countries together with the aim to only set the national identity but become the
part of the world as a whole (Altuntas and Turker, 2015). The advantages and disadvantages of
globalization are as follows-
Advantages
1

 Countries like UK, Germany are rich and thus they can sell their products and services
to poorer countries.
 Globalization assists individuals to learn varied things and also deal with people across
boundaries (Walker-Said and Kelly, 2015).
 Due to globalization imported goods are available within the country and thus people
can utilize it in order to enhance satisfaction.
 It helps in creating and offering varied jobs to people so that they can improve their
standard of living.
 It provides opportunities to local industries to work hard and compete with international
businesses (Garriga and Melé, 2013).
 It utilizes resources from varied countries for producing products and services so that
they are able to carry out work efficiently.
 Through globalization clients get benefits as they get wide variety of products from
which they can choose the best.
 Businesses get access to much broad markets. Here, investors get much wider opportunities to invest in different businesses (Arbogast,
Thornton and Bradley, 2012).
Disadvantages
 Globalization affects the local businesses and brands as they can go bankrupt because
large multinational corporations are providing their services and dominating the world
economy.
 It also affects the local traditions and culture of people (Milne and Gray, 2013).
 Local industries get affected because people are moving towards international firms for
buying products and services.
 High interference of political parties and thus it raises conflicts among them (Torres and
et. al., 2012).
 Globalization affects under developed countries.
 It affects companies as they get much greater competition. Thus, it can put smaller
industries at a disadvantage as they do not have resources to compete at worldwide scale
(Ghemawat, 2013).
2

There are varied key opportunities and threats which is faced by Lloyds Banking Group
which are as follows-
Opportunities
 Lloyd's have varied former competitors such as Bradford & Bingley which makes easier
for financial service providers to win over UK businesses. However, it provides
opportunities to enhance profitability of Lloyd's (Kuratko, Hornsby and Hayton, 2015).
 Financial service provider has the opportunity to enhance it mobile banking usage so that
they can provide satisfaction to customers. There are wide number of British consumers
who are using mobile phone to manage their financial accounts. However, increasing
usage of mobile banking will help bank to minimize its operational cost per branch and
satisfy needs of clients (Erkens, Hung and Matos, 2012).
 Lloyd group is planning to focus on launching Islamic banking services in order to
become strong. Further, business open Islamic Nostro Account and allows different other
banks to move money around the world and assist the business clients in keeping with
Shariah law. However, it provides great opportunity for bank to enhance its market
penetration by providing Islamic banking services to Muslim clients (Wintoki, Linck and
Netter, 2012).
 Further, the UK Islamic banking market is divided between HSBC, the Islamic Bank of
Britain and West Bromwich Building Society. Thus, it provides enough space for Lloyd's
bank to share the emerging growth opportunities in such segment of banking and provide
financial services to its customers (Aoki, 2013). It has been assessed that, The Bank of England is planning to extend Quantitative Easing
program. Further, it helps firm to decrease the interest rate and thus improve monetary
growth in the economy. Moreover, the monetary base of UK is likely to grow and thus it
aids banks such as Lloyds to enhance mortgage loan production. With the assistance of
this, it provides loan to varied UK customers and thus satisfy their needs (Nini, Smith and
Sufi, 2012).
Threats
 Business faces varied challenges and threats of fines and costs if found guilty in fixing of
exchange rate.
3

 The main threat to the company involves regulatory requirements that affect the market
share of firm. The increase in divestments will affect group's market share and its
competitive positioning (Boone and Ivanov, 2012). There are varied proposed regulations which are likely to affect the banking industry of
UK. However, there are different potential changes in UK financial standards and if these
are implemented then, it may affect the banking business (Fang, 2011).
Bargaining power of Financial Service Providers
The bargaining power of financial service providers is high as they have less competition
among providing banking services in UK. Thus, they have the power to charge high interest rates
from consumers and also adjust the quality of products or services and delivery time lines.
However, if financial service provider has such type of bargaining power than, they can affect
the competitive environment and thus directly influence profitability of business. Lloyd's
provides effectual financial services to both individual and business clients so that, they can
demand for high interest rates (Marks and Mirvis, 2012). Also, the clients are ready to pay high
interests on mortgage because firm owns goodwill in the market and they have minimum
competition who is serving a large base of customers in UK. There are various factors which
affects the bargaining power of financial service providers such as change in policies by the
Bank of England. Also, fluctuation in interest rates affects bargaining power of banks.
Change in needs and expectations of customers in the global financial services industry
As per the today's era, customers require modification in services and products of banks.
Thus, there are varied financial service providers who are focusing on enhancing its services to
satisfy the needs of clients. Banks are required to redesign their processes as per expectations of
customers so that, more number of customers can be attracted. Now-a-days varied customers
prefer to use mobile application to carry out or manage their finances so it is crucial for business
to set its internet banking facility to enhance the banking services worldwide (Boschma and
Hartog, 2014).
4

Illustration 1: Most preferred methods of banking
(Source: Aduda and Kingoo, 2012)
Following are the five needs and requirements of customers which they require from
global financial services provider. These are as follows- Channel expansion- It is crucial for the firm to develop right product mix and thus
provide self-service channels to clients which provides them with rich and consistent
banking experience (Aduda and Kingoo, 2012). Service availability- Provide effective technology that helps in making banking easy and
thus attracts large customer base. Client usability- Bank should build a reliable, competent and responsive model to satisfy
the needs of customers. Also, business analyzes feedback from their account holders so
that, they can improve the same (Becoming the Best Bank for Customers, 2014). Data Privacy and security- Financial service provider is required to protect and
safeguard the identity of clients and also ensure that, any internal or external person
should not misuse the client personal information.
 Easy banking- Banks are required to make their banking services easy and simple so
that, clients have better banking experience (Hopkins, 2004).
5

TASK 2 E-BANKING- THE ROLE OF ALLIANCES, MERGERS AND
ACQUISITIONS
Strategic alliance can be stated as the contract among two or more parties to pursue a set
of agreed objectives which is needed at the time of remaining independent business firms. As per
the in strategic alliance, two businesses mutually agree to share their resources to achieve
common objectives. Financial service providers start strategic alliances to expand its business in
the global marketplace. Merger and acquisitions can be defined as the term used for
consolidation of businesses (Hillier, Grinblatt and Titman, 2011). Merger can be stated as the
combination of two different companies to form a new enterprise. Moreover, acquisition is the
purchase of one company by another and forming a new company. It is generally done by firms
when they found themselves less profitable or competition in market is high.
Furthermore, it can be assessed that strategic alliance, mergers and acquisitions assists
Lloyds Banking Group in order to develop their digital capabilities in the area of insurance,
customer finance, retail and commercial banking markets. Thus, financial service provider
undertakes such consolidation methods such as merger and acquisition and acquires other
banking firm which is facing challenges in overcoming its debts. It helps Lloyds to expand its
market share and thus provide varied products and services in the area of insurance and customer
finance for education loan, holiday loan etc. Further, business can also merge with similar
financial service provider and thus carry out its operations on large scale and attract varied
customers (Peng, 2013). Thus, through merging with other banking firms, Lloyds can provide
varied diversified services to clients. Also, they can determine needs and expectations of
customers and provide them with mobile banking usage facility so that, customer satisfaction can
be attained.
All these consolidated methods help Lloyd’s banks to execute internet banking in their
system and thus attracting customers to utilize the online banking. Through determining the
needs and expectations of customers, business plans strategic alliance with other financial
service providers and deliver mobile banking facility to gain customer satisfaction. Merger and
acquisition helps Lloyds Banking Group to expand its operations in different markets such as
providing customer finance, retail and commercial banking with the aim to satisfy customer
needs (Park, 2014). Thus, by undertaking such consolidated methods it might assists banks to
encourage its digital abilities and provide customized services to clients as per their
6

requirements. Through merger and acquisition, it helps in maximizing the value of financial
capabilities. Such consolidated methods assist in benefiting the banking group to enhance the
productivity and improving the client satisfaction. It also aid banks to minimize the cost and risks
by distributing them across the members of the alliance. However, sometimes banks form
strategic alliance in order to gain political advantage. With the assistance of this, banks can
alliance with a local foreign business in order to gain entry in the international market and
overcome local barriers. Thus, it helps in expanding the operations in worldwide market and
enhances the performance of the firm (Arbogast, Thornton and Bradley, 2012).
It can be assessed that as per my opinion, the business model undertaken by Lloyds is
best fit for the aim of providing real differentiation and positioning in the fast changing era of
globalization. The purpose of business is to provide customer satisfaction and fair return to their
shareholders. Thus, in such fast changing internet and mobile banking market, business evaluates
the needs and requirements of clients and put their demands on first priority so that they can
create goodwill and make a difference together (Garriga and Melé, 2013). Lloyds possess the
best business model i.e. they are leading financial service group which provides low cost,
minimum risk and client focused UK retail and commercial banking business model. It operates
to provide banking services to both individual and business clients. Furthermore, business also
creates value for our clients by developing strengths and developing distinct image of firm in
market. It also provides superior customer insight and thus focuses on maintaining relationship.
Thus, it can be assessed that Lloyds business model is the best suitable and provides
differentiation and positioning of brand in the fast changing internet and mobile banking market.
Also, firm should determine the needs of customers and develop mobile usage because in Britain
there are various customers who are using mobile banking to manage their finances. Thus,
Financial Banking Group is required to focus on maintaining relationship with customers and
satisfy their needs and wants to build trust among them. In the current era of globalization, it is
crucial for business to undertake online banking method because if they do not adopt this then
customers have varied choices available in the form of competitors (Ghemawat, 2013). Hence,
business is required to improve its services and products by adopting innovative technology in
the form of online banking so that, they can attract large number of clients. However, the UK
financial services market remains one of the largest in the world and thus Lloyd’s business
7

model is required to be formulated as per the UK economy. Thus, it provides real differentiation
and positioning for future regulatory reform and attains desired objectives.
TASK 3 CORPORATE GOVERNANCE, CSR, LEADERSHIP AND
COMPETITIVENESS
Corporate governance can be defined as the processes and mechanisms through which
businesses are controlled and directed. Here, the board members and managers of firm have the
rights and responsibilities that involve rules and procedures in order to make decisions in the
corporate affairs. Further, business is also required to undertake corporate social responsibility
(CSR) in order to develop regulations and take initiative to protect the social environment. Also,
company is required to carry out various CSR activities with the aim to integrate regulation into
business model (Nini, Smith and Sufi, 2012). Moreover, there are various relevant management
and leadership concepts available with firm which helps them to focus on customer satisfaction.
It also rebuilds their colleague’s pride of working in their group by undertaking best CSR and
corporate governance practices. Further, Lloyd undertakes such business model which puts
customers at their heart and provides them with quality products and services in order to develop
long term view through making the most emerging digital channels.
The main strategy developed by Financial Banking Group is that, they provide low cost,
minimum risk and customer focused UK retail and commercial banking business model. Thus,
keeping in mind such objectives business focuses on client needs and expectations in order to
deliver them the best quality products and services. Further, in the coming year’s business is
required to bring varied changes in their technology, customer behavior and improving
regulatory requirements (Fang, 2011).
 Developing the best customer experience- Clients are the heart of business and thus
bank is focusing on building customer experience by providing them with multi-brand
products and services. Further, business is required to develop its digital presence by
providing internet banking facilities to clients and delivering high quality services (Aoki,
2013).
 Becoming simplified and easy- Business creates operational capability to enhance and
integrate as per the change in customer needs and requirements through becoming cost
leadership among UK financial services providers. However, by such cost leadership it
8

enables the business to provide increased value to our clients and competitive
differentiation.
 Delivering sustainable development- UK economy provides growth opportunities to
businesses in order to become market leadership in providing varied products and
services to consumers (Erkens, Hung and Matos, 2012).
 Colleagues- Lloyd bank is trying to focus on their employees and provide them with
proper training so that they can focus on customer requirements in becoming the best
financial service provider.
 Helping Britain prospers- It states that business is regularly focusing on satisfying the
needs of UK clients by providing them with best financial products and services (Boone
and Ivanov, 2012).
Through, the above objectives it can be assessed that; it helps Lloyds in developing its
ability in order to satisfy the needs and requirements of clients. Thus, financial banking group
undertakes effectual corporate governance scheme, CSR and varied leadership and
competitiveness theories to give tough competition to rivals. All these strategies assists business
to target clients and develop long term relationship with them by providing them with quality
financial products and services (Marks and Mirvis, 2012). Hence, the ability of the Lloyds
Chairman and senior management team to target customers and satisfy their requirements. All
the senior management and employees of organization are focusing to make Lloyd the best bank
for all its stakeholders. Thus, such objective can be attained by the firm through developing
strategic objective and providing low cost, minimum risk and improving customer behavior
within firm.
As per the corporate governance report of 2014, the Chairman states that they are
focusing in developing best financial services in order to develop trust among clients as well as
proving to be the best bank for shareholders. Firm has taken varied crucial decisions in order to
become best bank for customers. Hence, corporate governance framework enables strategic,
accountable and responsible decision developed by the colleagues. Also, the team of bank
supports colleagues in order to fulfill business objectives of CSR and corporate governance
(Boschma and Hartog, 2014). Lloyd's Chairman and senior management helps business to put
forward to satisfy customers and shareholders. With the assistance of such business model, it
puts clients at the heart which is based on traditional attributes such as prudence and long term
9

view in order to develop emerging digital channels. Also, business is focusing towards
developing internet and mobile banking market as it is the need of young customers. They are
carrying out their most of the financial activities by using mobile phones. Thus, business is
required to redesign its system and use innovative technology to attract clients.
TASK 4 PERSONAL REFLECTIONS ON LEARNING AND OVERALL
REPORT PRESENTATION
With the help of this assignment it helps me to analyzing significance of Global Financial
Services provided by Lloyd bank to its clients. Through carrying out the report, I understand that
the objective of bank is to satisfy needs of clients and shareholders. Also, business is trying to
improve its mobile usage services by adopting innovative technology such as internet and mobile
banking so that, customers can be attracted towards the firm. The UK banking sector is vast and
thus Lloyd gains more than 25 million customers and delivers them best financial services. It
involves both individual and business clients and firm provides different financial instruments so
that bank can satisfy Britain’s households, businesses and communities (Wintoki, Linck and
Netter, 2012).
Furthermore, Lloyd banking Group is focusing on the UK centric approach strategy in
which they focus only on needs and requirements of clients and fulfill it in order to achieve
goals. Also, business strengthens its colleagues with the aim to focus them to build effectual
strategies and satisfy needs of shareholders by providing them with fair return. Moreover,
business targets UK customers only but they are required to expand its operations by merger and
acquisition and focus on worldwide market in order to enhance customer base. As per my view
point it can be stated that, Lloyd senior officials like Lord Blackwell are continuously thinking
upon the expansion of business in global market but they are lacking somewhere which is
proving them to focus currently on local market (Kuratko, Hornsby and Hayton, 2015). Business
lacks in providing mobile banking usage services thus they need to be innovative and adopt such
services to attract clients and satisfy their needs.
CONCLUSION
From the accomplished report, it can be articulated that Lloyd Banking Group provides
financial services to UK customers. Moreover, firm is planning to expand its operations in global
10

marketplace. Therefore, it needs to undertake effective approaches such as strategic alliance,
merger and acquisition with the aim to develop internet banking system. Also, financial banking
group is required to determine needs and expectations of customers in the global financial
service industry and then provide them with suitable quality products and services to attain
customer satisfaction. Furthermore, business undertakes CSR, corporate governance and
leadership competitiveness to build effective digital channels. However, it assists clients to
develop long term view and provide best services to attain satisfaction among them. At the end,
it can be stated that Lloyd senior management and colleagues are trying to develop global
corporate strategy and is expanding its operations globally.
11

REFERENCES
Books and Journals
Aduda, J. and Kingoo, N., 2012. The relationship between electronic banking and financial
performance among commercial banks in Kenya. Journal of Finance and Investment
Analysis. 1(3). pp. 99-118.
Altuntas, C. and Turker, D., 2015. Local or global: analyzing the internationalization of social
responsibility of corporate foundations. International Marketing Review. 32(5). pp. 540-
575.
Aoki, M., 2013. Controlling insider control: issues of corporate governance in transition
economies. Chapters.
Arbogast, G., Thornton, B. and Bradley, J., 2012. A global corporate sustainability model.
Journal of Sustainability and Green Business. 1. pp. 1.
Boone, A. L. and Ivanov, V. I., 2012. Bankruptcy spillover effects on strategic alliance partners.
Journal of Financial Economics. 103(3). pp. 551-569.
Boschma, R. and Hartog, M., 2014. Merger and acquisition activity as driver of spatial
clustering: The spatial evolution of the Dutch banking industry, 1850–1993. Economic
Geography. 90(3). pp. 247-266.
Erkens, D. H., Hung, M. and Matos, P., 2012. Corporate governance in the 2007–2008 financial
crisis: Evidence from financial institutions worldwide. Journal of Corporate Finance.
18(2). pp. 389-411.
Fang, E., 2011. The effect of strategic alliance knowledge complementarity on new product
innovativeness in China. Organization Science. 22(1). pp. 158-172.
Garriga, E. and Melé, D., 2013. Corporate social responsibility theories: Mapping the territory.
In Citation Classics from the Journal of Business Ethics. Springer Netherlands.
Ghemawat, P., 2013. Redefining global strategy: Crossing borders in a world where differences
still matter. Harvard Business Press.
Hillier, D., Grinblatt, M. and Titman, S., 2011. Financial markets and corporate strategy.
McGraw-Hill.
Kuratko, D. F., Hornsby, J. S. and Hayton, J., 2015. Corporate entrepreneurship: the innovative
challenge for a new global economic reality. Small Business Economics. pp. 1-9.
Marks, M. L. and Mirvis, P. H., 2012. 3 A research agenda to increase merger and acquisition
success. Handbook of research on mergers and acquisitions. pp.61-75.
12

Milne, M. J. and Gray, R., 2013. W (h) ither ecology? The triple bottom line, the global reporting
initiative, and corporate sustainability reporting. Journal of business ethics. 18(1). pp. 13-
29.
Nini, G., Smith, D. C. and Sufi, A., 2012. Creditor control rights, corporate governance, and firm
value. Review of Financial Studies. 25(6). pp.1713-1761.
Park, S., 2014. Targeted social transparency as global corporate strategy. Northwestern Journal
of International Law & Business. Forthcoming.
Peng, M., 2013. Global strategy. Cengage learning.
Torres, A. and et. al., 2012. Generating global brand equity through corporate social
responsibility to key stakeholders. International Journal of Research in Marketing. 29(1).
pp. 13-24.
Walker-Said, C. and Kelly, J. D., 2015. Corporate Social Responsibility?: Human Rights in the
New Global Economy. University of Chicago Press.
Wintoki, M. B., Linck, J. S. and Netter, J. M., 2012. Endogeneity and the dynamics of internal
corporate governance. Journal of Financial Economics. 105(3). pp.581-60
Online
Becoming The Best Bank For Customers, 2014. [PDF]. Available through:
<http://www.lloydsbankinggroup.com/globalassets/documents/investors/
2014/2014_lbg_annual_report.pdf>. [Accessed on 7th October 2015].
Hopkins, M., 2004. Corporate Social Responsbility: an issues paper. [PDF]. Available through:
<https://www.ilo.org/legacy/english/integration/download/publicat/4_3_285_wcsdg-wp-
27.pdf>. [Accessed on 6th October 2015].
13