Business Strategy Report: Sustainable Practices at NatWest Bank

This report analyzes the sustainable strategy of NatWest Bank, a major UK retail and commercial bank. It begins with a problem statement addressing online banking failures and their impact on reputation and stakeholder relations. The report then delves into a PESTEL analysis, examining political (Brexit), economic, social, technological, environmental, and legal factors influencing the bank. Competitive dynamics are explored using Porter's Five Forces, assessing buyer and supplier power, competitive rivalry, and the threat of substitution and new entrants. Critical success factors, including strategic planning, sponsorships, and collaborations, are also identified. Task 2 focuses on the bank's position statement, strategy diamond, sustainability arena, vehicle (Ansoff Matrix), differentiation (Bowman's Strategy Clock), staging, and economic logic. Finally, it evaluates measures for sustainable strategy implementation, providing a comprehensive overview of NatWest's strategic approach.

Running head: BUSINESS STRATEGY
Sustainable strategy report
Name of the student
Name of the university
Author Note:

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Table of Contents
Task 1...............................................................................................................................................4
Introduction......................................................................................................................................4
1.1 Problem Statement.....................................................................................................................4
1.2 Key Forces for Change..............................................................................................................4
PESTEL Analysis............................................................................................................................4
1.3 Competitive Dynamics..............................................................................................................7
Figure No 1– Porter’s Five Forces Diagram....................................................................................9
1.4 Critical Success Factors...........................................................................................................11
Task 2.............................................................................................................................................12
2.1 Position Statement...................................................................................................................12
Figure 2- Strategy Diamond..........................................................................................................12
2.2 Sustainability Arena.................................................................................................................14
Figure No 3 – Sustainability Arena...............................................................................................14
2.3 Sustainability Vehicle..............................................................................................................15
Table No 1– Ansoff Matrix...........................................................................................................15
2.4 Differentiation..........................................................................................................................16
Figure No 4- Bowman’s Strategy Clock.......................................................................................16
2.5 Sustainability Staging..............................................................................................................18

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2.6 Economic Logic.......................................................................................................................18
2.7 Evaluating Measures for Sustainable Strategy Implementation..............................................19
References......................................................................................................................................20

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Task 1
Introduction
NatWest or National Westminster Bank is one of the largest retail and commercial bank
of United Kingdom. The bank was established in the year 1968 by the merger of Westminster
Bank and the National provincial Bank. The following report is based on the sustainable strategy
report of NatWest Bank.
1.1 Problem Statement
Natwest Bank has seen torrid times in the last few years with a number of problems emerging
one after the other. The main problem as of now is the failure of the online banking system
which has resulted in a huge customer backlash from the bank. The customers face huge risk as
they are in the fear that their online accounts may be hacked. The online failure of the bank will
have a direct impact on its reputation and will prevent them from attracting potential customers.
The bank will also lose the support of the stakeholders in such a case. The management of
Natwest must issue a strong statement to the media and assure the customers about the safety of
the accounts as well as appoint a networking expert to make sure such incidents do not happen in
the future.

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1.2 Key Forces for Change
PESTEL Analysis
The PESTEL analysis of Natwest Bank is an analysis of the macro environment that has
a direct impact on the mentioned bank of United Kingdom. The external factors usually are not
in the hands of the business organization and thus they may act as a threat or opportunity to the
success of the business organization (Armstrong et al. 2015).
Political
 2016 was a challenging political environment for United Kingdom because of the present
situation of BREXIT. The political situation of Britain is thus quite problematic for the
bank to make progress.
 As a result of BREXIT the UK government has to amend the constitution and change the
legal, economic and political rules and regulations of the country. Therefore the
management of the mentioned bank has to amend their own rules and regulations which
was earlier based on European Union laws and regulations
 Trade regulations will be implemented on UK which will have a direct and long lasting
impact on the business transactions of Natwest bank as they will have to abide to a
number of different rules that will affect their performance
Economical
 The economic system in UK is in shambles after the announcement of the country’s
separation from the European Union (Armstrong et al. 2015). The management of the
bank will have to come up with new policies to effectively deal with the situation.

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However the bank can attain profit from its overseas facilities where there are no such
risks involved.
 The success of the bank depends on the economic growth rate of the country and vice
versa.
Social
 The social network of the organization depends on the demographics like age, gender,
income and other such related elements (Bhardwaj and Malhotra 2013) Education is one of the key aspects in the determination of the social analysis of the
Natwest bank. The leisure habits of the people are also another important consideration of the
organization.
Technological
 The implementation of the latest technologies has been of great help for the mentioned
bank as because they have been able to easily cope up with the complex pressures of
modern banking (Armstrong et al. 2015)
 The implementation of the latest ERP software in the server of the bank proves the
efficiency of the bank to handle both domestic and international banking with ease
 The use of the technology has been of great use for Natwest to make sure that they
maintain a competitive edge over their rivals
Environmental

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 Environmental concerns are one of the biggest challenges that the bank faces and
increasing pressures has forced them to rethink and formulate a new environmental
policy to address the concerns.
 The bank aims to stop the printing of statements and intends to start issuing e statements
to all the customers within the coming years. The following plan is a part of the green
banking initiative of the management
 Some of the corporate offices of the bank and some branches have installed solar panels
that have been a positive development for the installation of the green energy of the bank.
Legal
 As mentioned earlier the legal system of UK is to be amended in the coming years as a
result of BREXIT. As a result of the change the management of the bank has to amend
the constitution to make sure that they adhere to the new banking regulations of the
country.
 The bank also needs to adhere to the different rules and regulations of the different
countries outside United Kingdom where they operate.
1.3 Competitive Dynamics
The sudden change in the business environment is one of the most important factors for the
paradigm shift in the policy of the organization. Some of the main forces for the change are;
1. The New Normal- The new mindset of the new business organizations, increased
competitions from the other market forces and the use of latest technologies and
innovations has been the new trend of the banking industry (Bhardwaj and Malhotra
2013).

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2. Disruptive Technologies- The main problem that exists in NatWest is the use of
disruptive technologies. The ERP system used by the bank is way too old for the modern
business transactions. The customers of the bank expects hassle free and fast services
which forces the bank to install new technologies ion the bank.
3. Shifting values- After the announcement of the British Prime Minister about the
complete separation of United Kingdom from European Union has made the bank to start
shifting jobs from UK to the European Union region (Bhardwaj and Malhotra 2013). This
is done basically to make sure that the organization can do as much as business which
would be deemed off if they decide to keep their main business within the United
Kingdom.
4. Increasing Stakeholder Influence- Stakeholder influence is one of the most important
aspects for the success of the business organization. Involving the stakeholders in all the
activities of the banks helps them to stay updated and provides room for a smooth
transaction. Some of the different strategies by which the bank has involved the
stakeholders are;
1. The creation of local business growth enablers to support SME’s
2. Conduction of regular meetings and conferences with the stakeholders of the bank to
make them aware of the different steps and plans of the future.
5. Climate Change and finite Resources- Climate change and finite resources are two of
the most important factors that determine the corporate social responsibility of the bank.
The management of NatWest has involve4d themselves in different environmental
initiatives and provides funds at a very low rate of interest for projects involved in the
betterment of the environment. In a bid to save the finite resources of the world, the bank

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has tied up with a number of Governments of the countries where they operate to provide
necessary funding to take preventive measures to stop the degradation of the finite
resources in that country.
The competitive dynamics of the particular organization can be best explained by the use
of the Porter’s Five Forces Analysis.
Figure No 1– Porter’s Five Forces Diagram
Source- (Bhardwaj and Malhotra 2013)
Porter’s Five Forces Analysis is one of the business tools that analyses the market and
determines the profit percentage of the given product or service. There are four different
components of the Analysis namely;

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1. Buyer Power- The power of the buyers is perhaps the most important concept that needs
to be considered by the management of the bank before the launch of new product or
service in the market. The presence of a large number of powerful buyers makes the
management powerless. This happens just because the bank has a large number of
competitors in the market who offer the same kind of products in the market, thus
increasing the options for the consumers to choose from such vast range.
2. Supplier Power- The suppliers in a bank do not offer physical products but rather offers
software and other solutions that are needed to maintain the business in a proper way.
The main suppliers of such kind of products and services are Microsoft, Quick Heal and
many other computers based graphical products that are needed for the organization to
prove the main determinants of the organization. The products are less important as
because they can be replaced with other existing products at any given point of time.
3. Competitive Rivalry- Competitive Rivalry is one of the most important aspects of
consideration for NatWest as because there are a number of main competitors in the UK
market that throws a direct challenge to the bank. Banks like Barclays, RBS has a huge
customer base in their ranks which makes it difficult for the organization to attract
customers and sell their products.
4. Threat of Substitution- The threat of substitution is an essential factor when the
management considers the balance of power in the UK market (Bhardwaj and Malhotra
2013). The main threat to NatWest is the emergence of digital currencies like bit coin and
the increasing importance of digital payment gateways like PayPal and Stripe. The more
these digital

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5. Threat of New Entrants— The threat to new entrants in the traditional financial markets
has raised serious doubts on the existence of the banks. The bank lies in a typical
environment with big guns in the industry like Barclays and RBS while new business
competitors in the form of digital transactions. However the amount of funds and the
large scale investment in the UK market by NatWest will prove to be the superior force
and will thus have no effect on the entry of new forces in the market (Bhardwaj and
Malhotra 2013).
1.4 Critical Success Factors
NatWest has relied on some special strategies to survive in the market. The strategies have
been designed in such a way that it curves a successful growth for the organization.
a. One step at a time- A proper planning by the efficient management of the organization
helps in the growth of NatWest globally and also across UK. The products of the bank
are launched one at a time to make sure that the organization does not fails to deliver the
value of a certain product.
b. Sponsoring- The bank tries to grow its brand value by means of proper and efficient
advertising. The bank is the proud sponsors of the England national cricket team and is
also sponsors other sports and other events.
c. Collaboration- NatWest Bank has collaborated with quite a number of foreign banks and
other financial institutions in order to deliver the best value for the business. Apart from
this regionally it has tied up with different other corporate to deliver additional products
for their customers (Bocken et al. 2014).

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Task 2
2.1 Position Statement
Figure 2- Strategy Diamond
Source- (Bocken et al. 2014)
Strategy is all about making some important choices and decisions for the future. The
Strategy diamond is a business tool that shows the way on how the actual bits and pieces of the
strategy are and what are the ways in which they fit together. The main objectives of the strategy
diamond are it to integrate important choices into a much bigger picture. The five elements in the

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strategy diamond are mutually interactive with each of the element shaping the others with a
possible refreshment of time and circumstances.
a. Arenas- The management of NatWest has identified the core technologies that act as a
game changer in the modern banking industry. Modern ERP systems, software updates
are the key to success for the bank. The implementation of the latest core banking
solution software by NatWest has been a game changer in the banking segment of United
Kingdom (Boons and Lüdeke 2013). The newly formulated strategy of the bank has
stressed on the importance of banking in rural and less known areas including small
towns and districts. NatWest management has decided to shift their focus on to the new
generation and offer new products like e banking, internet banking, online funds transfer,
online banking app and many more as such.
b. Vehicles- The bank has decided to attain the strategic goals by establishing new branches
in different small areas and towns of UK. However as far its overseas business is
concerned it intends to tie up with different local banks for the purpose of expanding its
presence on the global front as well as offer superior quality service to the foreign
customers.
c. Differentiation- The main aim of NatWest is to offer their customers quality products
that would cater to their individual banking needs and will help them to achieve the best
results in the industry (Bouma Jeucken and Klinkers 2017). The better the products and
the service of the mentioned bank, the better will be its brand image and its ability to
retain the customers.
d. Staging- Staging involves the proper implementation of the different strategic plans of
the organization. The proper staging of the strategies helps the bank to lower the cost and

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increases the scope for further improvement by the organization and will also help the
organization to deliver better goods and services for the customers.
2.2 Sustainability Arena
Figure No 3 – Sustainability Arena
Source- (Bouma Jeucken and Klinkers 2017
Sustainability is one of the key factors for the success of every single business organization. A
proper and measurable sustainable strategy helps the organization to make sure that their
existence in the future will not add to any negative impact within the industry (Skinner 2014).
The main focus of the bank is to be concerned about the environment and take different CSR
initiatives to make sure that there is a reduction in the use of energy and the sustainable
investment funds. The bank has decided to stop issuing paper in ATM’s or in any other form in

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banks. Such reduction in the use of paper will help them to take appropriate measures to stop
deforestation and eventually act as a small part of changing the environment (Slack 2015).
2.3 Sustainability Vehicle
Product/Market Market Penetration Product Development
Existing
Market
Increasing the amount of
sales in the already
present market and retain
the customers
Offering New products by means
of innovation and the application
of the latest technologies
New Market Market Development Diversification
Development of New
markets and venturing
into lesser known markets
Offering new products to the new
markets helps to increase the
business of NatWest
Table No 1– Ansoff Matrix
Source- (As Created by the author)
a. Market Penetration- NatWest bank has specific achievable strategies that help them to
penetrate the existing market and retain the loyal customers and also to draw potential
customers towards them. Such relationship marketing activities helps the mentioned bank
to increase their business and expand (Peteraf Gamble and Thompson 2014).
b. Product Development- The product development strategy involves the offering of new
products to the existing markets. The core banking system and the e statement alerts were

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introduced by the management of the bank just a few years back. However there are
many constraints attached to the strategy like high investments, technological failure and
the risk involved in project management (Dyllick and Muff 2016).
c. Market Development- NatWest has the aim to establish branches in some small districts
and towns and offer completely new range of products for the local customers. The
following strategy is undertaken by the bank to maintain their greater banking role.
d. Diversification- The following strategy is employed when banks offer completely new
products to new markets. NatWest mainly innovates products based on relevant
diversifications like net banking, rural banking, insurance plans and many more as such.
2.4 Differentiation

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Figure No 4- Bowman’s Strategy Clock
Source- (Dyllick and Muff 2016)
1. Low Price/Low Value- The following business area is not a good position for the
business. The presence of the mentioned bank in such a position will imply that the bank
has been unable to differentiate their product and fails to deliver the value of the products
to the customers.
2. Low Price- NatWest has taken a cost minimization strategy to make sure that they can
compete in the lower cost category of the market in rural areas and small towns. The
products introduced in these areas fetch low value but have high demands which make
them successful (Weber 2014).
3. Hybrid- The hybrid position involves the element of low price, but also involves product
differentiation. The NatWest bank aims to persuade the customers that there is added
value for the goods through the combination of proper price and an acceptable level of
product differentiation (Peppard and Ward 2016).
4. Differentiation- The aim of the following strategy formulated by the management of the
mentioned bank is to make sure that they are able to offer their present as well as their
future customers the best products. The different products of the bank come with high
quality and brand value. This helps NatWest to enjoy a superior competitive advantage in
the market.
5. Focused Differentiation- The strategy aims to position the product at the highest price
levels (Hughes Cox and Akhir 2016). The mentioned bank utilizes this strategy to
promote the best products or the premium products of the banks.

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6. Increased Price/Standard Product- The following strategy is the high risk strategy as the
bank offers these products to the customers without any substantial offerings. The profits
are high in case these products are sold at a high price.
7. Increased Price/Low Value- The absence of alternatives in some of the markets served
by NatWest helps them to offer products at any given price they intend to and the
products does not have a price cap. Monopolies are tough markets where customers are
least important.
8. Low Value/Standard Price- The position is the direct cause for any disaster in the
market. The bank must offer the high value for the products to make sure that they have
much better competitive advantage in the market.
2.5 Sustainability Staging
The many strategies formulated by the management of the mentioned bank are not all
equal and of the same importance in nature. Some of the strategies carry the tag of urgency while
the others are slow movers (Hughes Cox and Akhir 2016). The management must ensure to
appoint a team or some members of the team to implement the strategy in a proper way so that
the employees gets accustomed to the new system.
2.6 Economic Logic
Discovering and developing innovative and core banking solutions and making them available to
people all over the world is the key contribution to create value for society. According to Larson
et al. (2017) nearly a century of driving change to provide the customers a great banking
experience help them to have a proper economical balance within the industry.

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The company knows that it takes more than professional banking to win the hearts of the
customers. That is why they work in partnerships with customers, suppliers, professionals and
non-governmental organizations to deliver the proper banking services to the customers. TBL
also creates value by promoting responsible and ethical business practices throughout our global
value chain, helping us to continuously reduce any adverse impact resulting from our activities.
2.7 Evaluating Measures for Sustainable Strategy Implementation
The strategic measures for the implementation of strategic measures include;
1. NatWest must prepare a roll out plan to implement a strategic change or finalize a
strategic plan for the market.
2. Alignment of the budget to the priorities and funding the different projects.
3. Setting up sponsorship teams for each core strategy.
4. Setting up a date for the annual plan and the review of the business.
5. Establishing key success measures and a proper tracking system.

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develop sustainable business model archetypes. Journal of cleaner production, 65, pp.42-56.
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