Business Strategy Analysis of Starling Bank: A Comprehensive Report

This report provides a comprehensive analysis of Starling Bank's business strategy. It begins with an introduction to business strategies and the digital challenger bank, Starling Bank, highlighting its focus on business and current accounts and its banking license. The main body of the report includes a PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors influencing the bank. It then presents an internal analysis using SWOT and VIRO frameworks to evaluate the bank's strengths, weaknesses, opportunities, and threats, as well as its valuable, rare, inimitable, and organization-supported resources. Porter's Five Forces model is applied to assess the competitive landscape, followed by a discussion of strategic planning and Porter's generic strategies. The report concludes with a summary of findings and references.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Starling bank's pestle analysis.....................................................................................................3
Internal environment and capabilities of organization.................................................................5
Porter's five forces model............................................................................................................6
Strategic planing..........................................................................................................................8
Porter generic strategics.............................................................................................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategies means by which the administration sets out for achieving its desired
objective or goals. It can be merely delineated as long-term having business planning. Therefore,
about how grouping passim their organization should make the decision and allocate resources in
order to develop the objective (Zhou and Wen, 2020). Starling bank is digital challenger bank. It
had main focuses on business and current account process. The company also received its
banking licence from the prudent standard dominance and commercial enterprise conduct
authority. Bank have also proclaimed the largest Fin tech funding round of the year. This report
explain appropriate framework analyse the impact and influence of the macro environment.
Furthermore, the internal environment and their capabilities of organization along with this
porter five forces of given market sector. Moreover, explain about the range of theories, concepts
and models and devise strategies planning for organization.
MAIN BODY
Starling bank's pestle analysis
1 Political factor —.
Political factor has a great role in the financial and banking sector. Government
formulated policies that the banking sector has to follow to perform its operation. By following
that policies government has ensured bank provide a satisfied service to its customer. The banks
have a large collection of public saving and because of which the government tend to develop
strategy through which the work productivity and security of the capital investment can be
achieved. Therefore, bank should adapt the law of the state. In starling bank political factor that
influence is Brexit uncertainty delaying European expansion.
2 Economical factor -
Economy and banking sector are interrelated with each other. Every country with a
healthy economy is good for both banking and financial industry, vice versa. Foreign and local
investment is good for the economy because it would be created a many employment
opportunities. Economic factor of starling bank is being affected currently is lock down within

UK and country's economic growth was also being affected because of limited capital
transactions.
3 Social Factor –
A great impact of socio- culture factor on financial and banking industry. The changing
of choice and preferences of customer would make bank and business to change their brand
strategies and planing. In starling bank social factor that influence is like a trust and safety – an
important element for growth in banking. Many things have changed and transformed in the 21st
century like Another one is digital financial services that will help the customer to buy the
services easily. That will help the bank to offer their customer a variety of packages and offers.
4 Technological factor –
The technological change In the 21st century has brought everything online. Almost all
financial transaction are done through online banking. In fact not only financial transaction but
now days customers can also choose the many banking services like cards, insurance, mutual
fund though online. In starling bank many thing changes like increasing cyber security concern,
and also predictive intelligence and commercialization of the data.
5 Legal Factor —
Different country have different rules, laws and regulation for the banking industry and
that different impact on financial industry. In starling bank there is open banking regulation in
Europe and UK. Startling banks has to ensure that it tend to develop working strategy such that it
is able to minimize the threat of facing financial penalties by which the chances of goal
achievement will be increased for the organization. Staring bank has a responsibility to protect
the customer's data and also follow with all GDPR regulation.
6 Environmental Factor —
Factor like eco-friendly and sustainability have turned a matter of large significance for
the banking industry as well. Changes in environmental factor in starling bank is focusing on
environment sustainability to modification in loyalty of client. social and environmental are

positively affected when employees, customer loyalty and sales are positive. As positive social
and environmental action can make a positive customer and employees loyalty.
Internal environment and capabilities of organization
Starling bank is a digital mobile competitor banking company which is mobile offer
extremity advanced banking and business services. The SWOT analysis for starling bank are
below:
Strength:-
They have the main content is to help customer in making the right decision for both their
current expenditure along with the future saving. Also, the bank has their own mobile app for
their customer to get instant notification when they consume or acquire payments.
Weaknesses:-
Starling bank provide the limited services and do not have any physical presence. They
also have limited area of their services in which country they are operating (Melander, 2018).
Basically, bank is being more demonstrates in attitude and lacks of optimum utilization of their
resources. Due to having limited services this could also lead to have their less number of
customer while through which they cannot make their high range of customer base.
Opportunities:-
The bank think about the increasing their accessibility while by expanding their business
banking division. Innovation have them more developed, and they also have focus on mobile
banking sphere, which will give them competitive edge. Bank has to enhance accessibility,
starling bank has a broader scope, they can think of enhancing of their accessibility by grow their
business banking division. The increase in numbers of customer's SME business and individual
current accounts present a promising future ahead. They should focus on their mobile banking
area, that will give them a competitive edge. They also continuously think about innovation, so
they are not getting obsolete with their attribute.
Threats –
Threats of starling bank is continuously raising a number of competitors in market and
starling bank have large five banks as their largest competitors. So bank should be proactive in
their approach to avoid failure. And another threats to bank is customer behaviour, like a

customer who keep purchasing same product even though available of some better options is also
a challenge to the bank.
VIRO analysis
Valuable:-
The financial source of Starling bank shows about the high value that could also help in
external opportunities to be risen. It local products, then it would be more seen by the customer
in having competition due to having products differentiate. In this bank the employee are highly
trained and this could also lead to have high productive resource. The employee is loyal and their
retention level to more productive output for the organization.
Rare:-
Strong financial root-age are only obsessed by new organisation in their industry. This
means that challenger can easily usage their beginning in the same way and take more
competitory advantages. The employee is highly trained and skilled not only in the case of
organization. They also have compensation and working environment to ensure that this
employee does not leave their firms.
Imitable:-
New entrants and competition would postulate the profits for extended fundamental
quantity and time to collect this magnitude of business resources. The employee make their
highly trained and through which they can also make their high profits along with that could
easier for achieving their goals.
Organization:-
Making the use of proper resources and make their opportunities along with this resource
prove to be sourced of sustained competitive advantages for having their commonwealth. They
have the proper network to reach out the customer by ensuring about their products and services
on all its outlets.
Porter's five forces model
Porter five force model is business analysis model that might be help to explain various
competitive advantage and sustain the different tools levels of profitability. This five forces

model are frequently used to measurement business relation strength, attractiveness and
profitability of the organization in the market.
Competition in the industry:-
The number of competition along with the quality to undercut the bank. Starling bank
have large number of competitors as many of the cognition merchandise and their employment
they are provided. Suppliers and buyer seek out the company for having their more benefits and
that could lead them for having their high profits (Chiara, 2020). If the bank is being able to offer
a better deal or lower prices to their customer, than it might be seemed more competition in the
market. When competitive rivalry is low, the bank has greater power to charge high prices on
their interest rate and some other products which they are offering to customer. Furthermore, also
set the position of deal to accomplish the high income and net profit.
New entrants:-
Starling bank power is also impressed by the power of new entrant into the industry and
that might be also caused their loss. The little case and wealth it costs for competitors to enter a
company marketplace and make them more effective competitors. The more bank will develop
they will acquire better position and make their high range of customer. An organization with
have brawny obstruction to entry perfect for existent companies within that other organization
could be more bale to charge their products with high terms and negociate better terms
(Anastasiu, Gavriş and Maier, 2020). Sometime the threat of entry also depends on the barriers
which present the reaction from the existing competitors and also entrant the high expect.
Power of suppliers:-
This factor being more address and their power of suppliers. It is might be more
impressed by the amount of provider of key inputs at their products and services. This comes
from how unique their products and services being from some other organization. The fewer
suppliers of an organization, more institution would calculate on the suppliers. As result
suppliers has more power along with this they can easily cause up signal reimbursement and
pushing for different reward in trade. On other hand, it can state when there are many provider or
low switch costs between suppliers. Bank can make their inputs costs lower and enhance its
being more profits. As suppliers has the power to make dependents on number of characteristics
in market along with the situation that has the relative to important of its sales or purchase might
be compared with other business.

Power of customer:-
The ability that customer has to thrust terms lower on their level of power is one of the
five forces. It might be effected many buyers or customer and which seem to be more important
for them in making their customer. When they have the power of customer that could also lead
them for having high range of power and make their new customer as well (Shang, Choi and
Kan, 2020). A littler and almighty customer basic means that all client has more power to discuss
for berth prices and better deals. Bank customer can be more independent that will have an easier
time for complaint high terms to increase more profitability. Customer has much power while
through they can make organization for working with high profits or less earning at same year.
They are basically required with the high level of satisfaction in their products or services.
Threat of substitutes:-
Substitutes goods and services that can make the proper use of place of company in threat
of their own products and services. Bank can also have their own products and services to their
customer from which there is no close secondary will person with more power to increase their
prices and lock in more favourable terms (Viswanadham, 2018). When close substitutes are
being more available, customer will have to option for their buyer through which that could be
easier in making the customer base.
Strategic planing
Strategic planing is the process of establishing a direction for a small business. The
strategic plan gives as a place to record vision, mission, values as well as long term goals and the
action plan where organization will use to reach them. A well written strategics plan play an
important role in business's growth and success because it tells organization and their employees
how best to respond to opportunities and challenges.
Objectives
 To Increasing in profit by 10% with end year of 2021. To increasing in sales by 20% with end year of 2021.
Strategies
Bank has to adopt strategies to increase in sales and profit. For increasing in sales of
services bank has to find out the new customer, because new customer can help to grow a
business. The simplest way to get a new customer is to offer incentives to a current customer and
motivate them to initiate referral for bank. Because word of mouth is most powerful form of

advertising. Another way to increase a sales is stay connected with old customer through mail,
phone calls, SMS texts etc. for increasing in sales bank has to develop competitive advantages
like enhance services that compete with other, services that give more benefits to customer as
compare to other bank so customer can buy services from this bank rather than buying services
from another bank. To increasing in sales use social media marketing for advertisement, because
now days people spend most of there time on social media so it will help in easy accessing the
customers and also lower cost to acquire the customer. By increasing in sales of services bank
can also increase their profit within in a year.
Ansoff Matrix
It is also known as the product/ market expansion grid. Ansoff matrix is an instrument
that are used to investigate and design strategies for development. There are four strategics of
this matrix that can help the bank to develop and also investigating the risk associated with all
strategies.
Ansoff matrix's four strategies are
1 Market penetration –
This strategies focus on increasing gross sales of present services in present market. Bank
does this by offering a various service to it present customer.for develop the interest of customer
in their services that they interact with each customer and customizes the offer. The various
services that bank offer are also amended from time to time for improve or changes in services
for benefit of customers(Vo, 2018). So it ensures that services are superior to fulfil need of
current and potential customer. Bank also increase promotion and their distribution efforts to
increasing the sale.
2 Product development –
This strategies focus on introducing new services to an existing market. This strategy is
good for those bank that have good customer base and also great market share in present market.
Bank also do amendment in services that are already off, so modify in the services develop a
completely new services (Nadeem and et.al, 2018). And bank offer those services to their
existing customer. Any new services created can attract the customer so that will help in gain the
attention and also increase in sales of services.

3 Market development —
These strategies are focus on the entering into new market with existing product. For this
bank has to move in a fresh geographical market and launch retail store. Before enter into a
market bank has to understand the new financial market. After deciding to invest in it, it has to
set up many retail store and market. It also ensures that its rates are lower than compare to its
competitor attract customers. Another strategies that bank adopt is offer a new service certain
section of present customers. For instance premium or luxury services purpose are approaching a
rich and upper class customers.
4 Diversification –
These strategies are focus on launching of new products and entering into a new market.
That mean promoting a new product in new market. There is a high risk in this strategies because
market and serives both are new so there is high risk in these strategies, so the risk can be
alleviated by diversification (Ghazinoory and et.al, 2017). This strategy may offer the superior
possibility to enhanced revenues. for diversification bank can use conglomerate diversification
because in these bank can enter into a unrelated industries like auto mobiles, printing etc.
Porter generic strategics
Porter generic is also called generic strategies “ cost leadership “(no adornment),
“Differentiation '(creating uniquely coveted good and services) and “focus “ (offering a
specialised service at market place).
1 The cost leadership strategy
Porter's generic strategics are ways of gaining competitive advantages. For achieving a cost
leadership strategies there are two-way such as enhancing the profit by decreasing the cost, by
charging banking ordinary price. Charging lower prices for Increasing the market share in
banking industry.

If a bank can accomplish and carry on overall cost leadership, then it will be a preceding
ordinary performer in banking business.
2 Differentiation -
In this strategy a bank has to be specific in its business along some attribute so that attract
the differentiation make there services different from bank's challengers. For attainment of this
strategy bank require an effective marketing, so that the people know the advantage offered by
bank are different from other bank.
3 focus –
The focus strategy concentrate on constrictive section and within that section bank
attempts to accomplish either Differentiation or cost advantages. This strategy concentrates on
recession market and offers individualized services. The bank focus entirely on it and serving the
particular targets very well can better services the needs of the bank. The bank pursuing a focus
strategy to achieves either lower cost or achieve differentiation by meet the necessity of
particular targets. In this strategy bank has to create well specific services or low cost services
for there market, so they can provide there customer a unique or low cost services in the entire
market, that will help to create strong loyalty among their customer. So cost focus makes less
attractive of their competitor services.
CONCLUSION
From the above report it had been concluded that macro environment play important in
developing the business while through which they can make their growth. Internal and external
factor keep the organization more developed and that could also help them in making their better
market strategics. This could also seem to be strong through having their high growth. Strategics
management plan assist the business for their customer and that could be more important for
becoming and trust over their loyal customer.

REFERENCES
Books and Journals
Anastasiu, L., Gavriş, O. and Maier, D., 2020. Is human capital ready for change? A strategic
approach adapting Porter’s five forces to human resources. Sustainability. 12(6).
p.2300.
Melander, L., 2018. Customer and supplier collaboration in green product innovation: External
and internal capabilities. Business Strategy and the Environment. 27(6). pp.677-693.
Shang, X.F., Choi, M.C. and Kan, Z.C., 2020. A study on the development model of trip.
Viswanadham, N., 2018. Performance analysis and design of competitive business
models. International Journal of Production Research. 56(1-2). pp.983-999.
Zhou, P. and Wen, W., 2020. Carbon-constrained firm decisions: From business strategies to
operations modeling. European Journal of Operational Research. 281(1). pp.1-15.
Nadeem, A. and et.al, 2018. Digital transformation & digital business strategy in electronic
commerce-the role of organizational capabilities.
Vo, D.H., 2018. Should bankers be concerned with Intellectual capital? A study of the Thai
banking sector. Journal of Intellectual Capital.
Ghazinoory, S. and et.al, 2017. Technology roadmapping architecture based on technological
learning: Case study of social banking in Iran. Technological Forecasting and Social
Change. 122. pp.231-242.
Online
Chiara, P., 2020. Porter's Five Forces Framework [Online]. Available through:
<https://timreview.ca/article/1366>