BUSI48952 - Monzo Bank: Contexts of Management and Global Entry

This presentation provides an in-depth analysis of Monzo Bank's management contexts, focusing on its strategy for international expansion, particularly its entry into the US market through a partnership with Sutton Bank. It evaluates the macro-environmental factors affecting Monzo's operations, including the impact of Brexit, socio-demographic trends, informal institutions, political and regulatory factors, and economic conditions. The presentation also examines the competitive dynamics of the banking industry, highlighting Monzo's strategic positioning, key stakeholders, and potential challenges related to market structure and cultural adaptation. Recommendations are made regarding the most appropriate entry mode, alignment with the company's vision and mission, and strategies for dealing with competitors, concluding that a thorough analysis of the competitive landscape is crucial for successful global expansion.

BUSI48952 Contexts of Management
INTRODUCTION
The vision of thecompany refers to what the company wants to accomplish for the success of the
organization and Mission is a statement of how the company will achieve the vision. Strategies refer to the
series of methods to accomplish the vision by using the mission of the company. It is imperative for all the
business organizations to analyze their external environment to measure the impact of macro-environmental
factors on the performance of business and to take corrective measures to improve it.This presentation
willdiscuss the company’s strategy of Monzo bank lid. It is a UK based small size online bank headquartered
inLondon, England; providing financial services through its own mobile app and a prepaid debt card. The
presentation will also demonstrate the macro environmental and competitive dynamics for this company.
Further it will also provide strategic recommendations to enter in a geographical market for the company.
Discussion of the company’s strategy of Monzo Ltd.
 Vision –To expand the banking and financial services in the cities of US. To be the best community bank
in every community , ensuring safety of the finances of customers and to provide accurate and prompt
services through online transactions.
 Mission – Monzo’s mission is to make money work for everyone. It includes supporting the customers’
needs and making its online banking app as accessible as possible to the maximum customers. Its mission
is to offer maximum help to support the customers in controlling their finances.
 Values – The bank holds high standards of ethical behavior by supporting its employees and by creating a
positive and hassle-free working environment for them.
 Strategic Positioning –The current strategy of Monzo is focused on attracting new quality users who
use prepaid cards. Its main generic strategy is to is to put emphasis on word of mouth advertising and
having a loyal customer base. Its key strategic positioning includes community meet ups and
hackathons to be stable in the banking industry by strong positioning of the firm. The focus of this
company is on cost controls to support the customers effectively.
Key Stakeholders – The key stakeholders of Monzo bank include Shareholders, investors,
employees, regulators, government, and customers or clients etc. The major and most powerful
stakeholders are its shareholders (with more power and more interests) who consist of Thomas
Blomfield , Paul rippon etc. who collectively hold more than 17 million shares of the company.
Its other investors include Vanderbilt university and Octrahedron capital.
 Monzo bank is authorized by prudential regulation authority and is regulated by Financial
conduct Authority that impacts and monitors the functioning of this bank. The bank has
more than 1500 employees who have less power but more interest in the company. The
government of UK is also its stakeholder that has more power but less interest in the
 Alignment of Entry modes to Firm’s visions – The Monzo bank will enter the US market through partnership and strategic
alliance. It is a long-term and multi department commitment for the companies entering in the international market
that defines goals for both companies. It will enter the international market through partnership alliance with Onio-
based Sutton bank but it will not offer money lending services for its US customers.
Evaluation of macro-environmental aspects in the region that Mozo bank operates in
 Impact of changes in trade agreements and regional blocs
 Brexit had impacted the banking industry in terms of loss of bank assets and loss of financial services jobs. In
contextwith Monzo bank, it was not much affected by Brexit as the company faced no changes to the working of its
cards in UK or abroad due to Brexit. Also, the bank ensures that the deposits of customers are protected by the Financial
services compensation scheme of the value 85000 Euro perperson that will remain safe even after Brexit.
Impact of Socio demographic trends
 The demographic changes such as change in population growth rates and disposable income of people impact the
demand for consumer credit and mortgages that in turn impact the interest income for the banks. Monzo needs to
consider this aspect. Migration of people to another country also does not impact much on Monzo as it offers Monzo
card exchange rate to be used online in a foreign currency.
Role of Informal institutions
The culture delivers the values and behaviors that contributes to creation of trusts in banks and ensures positive image of
banks among its employees , investors and customers. A strong culture reflects how the employees are hired, resources
are allocated and it links the banks with employees who have similar beliefs. Monzo ltd. encourages an open and
collaborative working environment. It impact the company in a positive manner by contributing to its brand image in
the banking industry.
Impact of political and regulatory factors
 The political factors of the macro environment include political stability, change in the trade agreements, trade
restrictions, tax policies, trade reforms, tariffs etc. But the Monzo bank did not face the impact of political
instability such as Brexit as the company is regulated by Financial conduct authority and prudential regulation
authority that ensures safety of the finances of its customers. But the bank needs to comply with the laws of
these regulators otherwise it will have to face the penalties in case of any violation of the regulations set
bythese regulators in the interest of customers or employees or country. The bank will also have to comply
with the regulations of US because of its expansion there.
Impact of economic conditions
 The economic factors such as interest rates, inflation rates, foreign exchange rates , disposable income of
people, population growth rates etc. impact the functioning of banks. In context with Monzo ltd. , economic
factors such as interest rates affect the functioning of this bank. Also, the disposable income of people impact
consumer credit demand that impact interest incomes or the banks.

2. Evaluation of the competitive dynamics in the industry -both global and local
The concentration and the internal/external causes leading to it.
Three are various internal and external factors which affect the business to take the advantages of the competitions. In
context to the Monzo bank, the factors are as under:
Internal
Money and resources: In relation to Monzo bank ltd., the company have limited resources and money to hire the employees and
equipment so that it can run the business well.
Company culture: With reference to Monzo bank ltd., the company have different culture which create the environment of
competition that enforce the collaboration and teamwork.
External
Politics and policies of government: The business of Monzo bank ltd. can be affected by the policies of the government as it
change when there is change in government.
Competition from other businesses: The Company have high competition as there are many competitors of Monzo which
includes Tandem, Starling bank etc.
The market structure of Monzo bank ltd.
The market structure of the company explained that there is perfect competition in the industry as there are many
competitors of the Monzo bank ltd like Monese, Revolut, Starling bank and so on. Therefore it falls under the perfect competition
market as the bank offer similar products as the other bank offers. The consumer are aware about the products that are offered by
the bank and also get satisfied with their services.
) The analysis of stakeholders; new entrants; alternative solutions
Stakeholder analysis of Monzo bank –
The stakeholder analysis is a framework that prioritizes the stakeholders of company on the basis of
their degree of interest and power. The stakeholder analysis of Monzo bank is explained below –
d) Keep satisfied – These stakeholders have high power and low interest in the company and needs to be satisfied.
e) Manage Closely – They are to be managed closely because of their High power and High interest in the financial
operations of Monzo ltd.
f) Keep Informed – They possess low power but high interest in the firm and required to be informed about
exchange rates etc. of the bank.
g) Monitor – They have the low power and low interest in the functions of bank and needs to be monitored regularly
for good conduct of operations of the bank.
The industry globalization drivers.
Each industry create the potential to become global for which it approaches to the various strategies. With reference to
Manzo bank ltd. the globalisation drivers are as under:
 Market drivers: The market drivers include the satisfaction of the customer, employee engagement and
profitability. Thus, Monzo provide its services according to the need of the customers.
 Cost drivers:The global strategy include the economies of scale and differences in factor cost that is used for the
development of the business. Therefore, a new entrant have to develop an effective strategy in order to overcome
the competition.
 Competitive drivers: When there is high level of trade and interdependence so it create the potential for the
industry globalisation competitive strategies.
Strategic recommendations to enter a geographical market for the firm.
a) Identify the most appropriate entry mode for the firm
The most appropriate entry mode for Monzo bank ltd. is partnership as it is an online bank provide its
services to the customers for paying anything from the account. Thus the firm can enter to the new market or region by making
partnership with other banks that are already exist in that particular region. As the firm enter in US market through the
partnership with the Ohio-based Sutton bank. It is the best strategy for the company to enter in the foreign market because the
local partner are aware with the culture prevailing and the customers as well.
b) Discuss the alignment of suggestion to the product/service; the goals and the mission; the current strategic positioning
The company can offer its products by keeping the goals, strategies and customers in mind so that the target of the
business can be achieved. Thus, the firm offers its products according to the needs of the customers and communicate about
their products through marketing and make them aware about the features. The improvement also made in the products and keep
the stakeholders informed about the changes. Therefore, Monzo has adopted traditional marketing strategy to connect with
its customers.
c) Anticipate the potential response of existing players competitors
Monzo can deal with its competitors by making the market research before launching its products so that it can be
aware about the competition and the products that are offered by the competitors in the same region. The firm should analyse the
strength and weakness of the competitors to gain the competitive advantage. It can bring the different products and services to
engage in the counter attack for the competition. It should track its competitors and avoid the noise of their new launching
products and bring the innovative ideas to overcome the competitors.
d) Highlight the cultural challenges the firm will face.
With reference to Monzo, the firm can face the cultural challenge while expanding its business globally
which are depicted as under:
 Fail to adapt the global business model to the local market: The business model should be modified
according to the taste of the customers as they are influenced by the culture of the business. The business
should develop model to prevent the risk of failure.
 Fail to identify the regional and subcultural differences: There are different people in the country with
variations in their preferences. The differences can be vary in terms of the preferences of the male and female
consumer.
Conclusion
From the above discussion it has been concluded that the firm should analyse the competition prevailing in the
market before expanding its business globally. The presentation has discussed about the Monzo bank ltd. and the
marketing strategies adopted it. The macro environmental analysis has been done in respect of the company and
discussed about the internal and external factors that can affect the business. Further, the presentation has explained
the stakeholder analysis and the market structure of the company. In addition to this, it has discussed about the
drivers of the globalisations.