Strategic Management at Barclys Bank

This project discusses the Strategic Management process which Robbins and Coulter (2007:240) define as” A six –step process that encompasses strategy planning, implementation, and evaluation”. The project is based on the strategic management of Barclays Bank. The main goal of Barclays bank is to satisfy people’s needs and offer them the best service.

According to Jones and George (2008:308), the SWOT analysis is “A planning exercise in which managers identify organizational strengths (s) and weaknesses (W) and environmental opportunities (O) and threats (T)”. Strengths might include adequate financial resources, economies of scale, and proprietary technology. Weaknesses include lack of strategic direction, obsolete facilities, and lack of managerial depth and talent. Whereas, Opportunities might include the possibility of serving additional customers in the face of weakening competition, or the chance to enter foreign markets due to falling trade barriers. Threats might include the likely entry of new lower-cost foreign competitors, rising sales substitute products, and slowing market growth (Dessler, 2004).

Four important features that lead to the success of Barclays bank are: High quality products, team spirit between the bank’s employees, wide spread global presence and strong management with well educated managers. Although Barclays bank is a highly qualified bank, it still lacks important services and offers like Islamic banking and Drive through ATM. The banks products are not well advertised and so many people aren’t aware of the retail banking offers. The marketing team should promote and advertise more about the products so it could be known by everyone. The banks location is not suitable for such banking environment, and if customers wish to visit the bank they have to stay for long hours waiting for a parking.

Barclays bank lacks ATM machines and people living far away from the city could face some difficulties in withdrawing cash. (Ahmed, 2009) The opportunities are wide for Barclays bank. It could invest in more countries and especially the Arab region and it could have more branches in UAE in order to approach more customers and to retain the old ones. The reputation of Barclays bank is well respected and it has won the “Best Retail Marketing campaign” award in the banker Middle East Product awards in 2009, UAE. Although the opportunities are wide for Barclays Bank, it could face some threats, such as the changes in the government’s regulations and policies as well as the increase in the ratio of inflation. (Ahmed, 2009)

Six new suggested strategies will be outlined after a SWOT analysis and mission of Barclays bank are discussed. Strategies are implemented at the corporate level, business level, and functional level.

1.0 Introduction

Robbins and Coulter (2007:240) define Strategic Management Process as “A six step process that encompasses strategy planning, implementation, and evaluation”. Managers work to develop the set of strategies (corporate, divisional, and functional) that will allow an organization to accomplish its missions and achieve its goals (Jones & George, 2008).According to Jones and George (2008:308), the SWOT analysis is “A planning exercise in which managers identify organizational strengths (s) and weaknesses (W) and environmental opportunities (O) and threats (T).

This project will explain the strategic management process of Barclays Bank along with a SWOT analysis which has been undertaken in order to analyze and explain the internal and external factors of Barclays Bank. This project will discuss the three levels of strategy in an organization: corporate, business (competitive) and functional strategies. Based on the SWOT analysis and mission of Barclays bank and the three levels of strategy, six new strategies will be outlined in terms of growth, renewal, role of competitive advantage, quality of competitive advantage and functional departments supporting the organization.

2.0 Strategic Management Process

Robbins and Coulter (2007:240) define the strategic management process as a process which consists of: Identifying the organization’s current mission, goals, and strategies, doing external and internal analysis, formulating strategies, implementing strategies and finally evaluating results to check how effective were our results and if the strategies applied helped in achieving the organization’ goals .The strategic management process consists of six major components as shown in Exhibit (2.0-1) (Bartol & Martin, 1991). “The strategic management process is important for managers in need to develop strategies on long term basis and provide advantages that can be sustained over time for an organization (Dess & Taylor, 2004). According to Dessler (2004, 112) Strategic management is the process of identifying and executing the organization’s mission by matching the organization’s capabilities with the demands or its environment.

According to Jones and George (2008:308), the SWOT analysis is “A planning exercise in which managers identify organizational strengths (s) and weaknesses (W) and environmental opportunities (O) and threats (T)”. Strengths might include adequate financial resources, economies of scale, and proprietary technology. Weaknesses include lack of strategic direction, obsolete facilities, and lack of managerial depth and talent. Whereas, Opportunities might include the possibility of serving additional customers in the face of weakening competition, or the chance to enter foreign markets due to falling trade barriers. Threats might include the likely entry of new lower-cost foreign competitors, rising sales substitute products, and slowing market growth (Dessler, 2004).

Strategic Managemet Process

[Exhibit 2.0-1] The Strategic Management Process “A six step process”.

3.0 About Barclays Bank strategy

3.1Barclays Bank History
Barclay’s bank PLC based in UK is one of the world’s largest financial services companies. They have been providing banking services and investment management for over 300 years. Today Barclays Bank operates in over 60 countries. It’s a profitable and growing business. Barclays was established in UAE in 1975 and it has more than 1000 employees. It has a total of 45 ATM machines .Barclays bank offers its customers 24-hour online banking as well as account access and customer support through 24-hour call center. (Ahmed, 2009) and (www.barclays bank.com)

3.2 Strategic planning process of Barclays Bank
According to Barclays bank website (www. Barclays Bank.com) Barclay’s strategy is to achieve good growth in time by diversifying its business and by increasing its presence in markets that are growing rapidly. This is driven by the Barclays mission to become one of the most leading global financial services industries, helping customers and clients throughout the world achieve their financial goals. The strategy is based on the principles of earn, invest and grow. The main task for establishing Barclays bank in Abu Dhabi is to develop retail and commercial banking activities, enhance operations, and increase the growth of businesses.

3.3 Mission of Barclays Bank
According to Barclays bank website (www.barclays bank.com) the mission is: •Developing talented colleagues to reach their full potential, to ensure Barclays retains targeted customers and providing best financial services •Driving new ideas, adding diverse skills and improving operations •Retain the trust of customers

3.4 Vision of Barclays Bank
Barclays bank vision is to be one of the most admired financial organizations in the world, recognized as an innovative, customer focused bank that delivers quality products and services, and ensures excellent customer service in order to approach more people. (Ahmed, 2009).

4.0 SWOT Analysis of Barclays bank

According to Schermehorn (2008:212) the SWOT analysis is “the internal analysis of organizational strengths and weaknesses as well as the external analysis of environmental opportunities and threats”. The below table will discuss the SWOT analysis of Barclays bank.

[Exhibit 4.0-1] The SWOT analysis of Barclays Bank (Weaknesses, Strengths, opportunities and threats)

4.1 Strengths
Barclays bank offers a high quality range of products including: accounts, credit cards, loans, investment, mortgages, insurance, deposits, overdraft and banking online. Team spirit between the bank’s employees is strength for it makes the environment at work better and which will further increase the markets productivity. Barclays bank supports businesses in different countries with competitive services to suit their location, ambition and challenges. The bank has a strong management with people involved from different banking culture and experience (Ahmed, 2009).

4.2 Weaknesses
Even though Barclays bank is a highly qualified bank, it still lacks important services like Islamic banking and Drive through ATM. The banks products are not well advertised and so many people aren’t aware of the retail banking offers. The marketing team should promote and advertise more about the products so it could be known by everyone. The banks location is not suitable for such banking environment, and if customers wish to visit the bank they have to stay for long hours waiting for a parking. Barclays bank lacks ATM machines and people living far away from the city could face some difficulties in withdrawing cash. (Ahmed, 2009).

4.3 Opportunities
The opportunities are wide for Barclays bank. It could invest in more countries and especially the Arab region and it could have more branches in UAE in order to approach more customers and to retain the old ones. The reputation of Barclays bank is well respected and it has won the “Best Retail Marketing campaign” award in the banker Middle East Product awards in 2009, UAE (Ahmed, 2009). 4.4 Threats

Changes in the government policies could affect the growth of the bank and it could reduce the volume of cross selling retail products which could result in bankruptcy. Increase in ratio of inflation could be a threat for employees if salaries don’t increase. If a bank fails to achieve successful records each year then a threat of takeover will result in this case. (Ahmed, 2009)

5.0 Organizational Strategy of Barclays bank

Six new suggested strategies will be outlined after a SWOT analysis and mission of Barclays bank where discussed. Strategies are implemented at the corporate level, business level, and functional level. According to Jones and George (2008: 308) managers at the levels of the organization select the corporate, business (competitive) and functional level strategies to best position the organization to achieve its missions and goals.

5.1 Corporate Strategy

Corporate strategy is a strategy which is based on the mission and goals of the organization and the roles that each business unit of the organization will play. There are three main types of corporate strategies: growth stability and renewal. Growth strategy is used when an organization wants to grow and does so by expanding the number of products offered or markets served either through its current business or through new business. Our suggested growth strategy will be to increase the number of branches in UAE. A renewal strategy is a strategy used to point out organizational weaknesses that lead to performance declines and unsuccessful performance (Robbins &Coulter, 2007).Our suggested renewal strategy it to update the online banking system

The suggested strategy for growth and renewal is increasing the number of branches in the UAE and updating the online banking system.

5.2 Business (Competitive) Strategy

Michael Porter defines competitive strategy as a plan to establish a profitable and sustainable position against the forces that drive industry competition (Dessler, 2004). A business (or competitive) strategy focuses of how an organization will compete in each of its businesses .It simply describes how the company will compete in its primary or main market (Robbins &Coulter, 2007).

The suggested strategy for competitive advantage is the drive through ATM and for the quality of competitive advantage is to enhance marketing strategy and approach and retain more customers.

5.3 Functional Strategy

According to Gary Dessler (2004:117) functional strategies identify the basic courses of action each functional department will pursue to help attain the business’s competitive goals. Our suggested functional strategy is for the human resources department to hire more Arabic speakers and to invest in the enlargement of branch network in the UAE as well as to focus more on the marketing and advertisement of the retail products in order to achieve the organizations goals and to increase the importance of the bank.

6.0Summary

In conclusion, this project discusses the strategic management process along with internal and external factors in a SWOT analysis, as well as the three levels of strategy: Corporate, competitive and functional strategies. We case studied the strategic management of Barclays bank in order to understand and emphasize how the process works and what factors would it result in. This project included a detailed SWOT analysis to point out the weaknesses, strengths, opportunities and threats Barclays bank could face. Based on the SWOT analysis and mission of Barclays bank, six new strategies were outlined and suggested under corporate, competitive and functional strategies.

7.0References

Dessler, G. (2004), ‘‘Management’, NJ, U.S.A: Pearson Education International.
Jones, G.R. and George, J.M. (2008) ‘Contemporary Management’, NY, U.S.A: McGraw-Hill Companies.

Robbins, S.P and Coulter, M. (2007), ‘Management’, NJ, U.S.A: Pearson Education International.
Schermehorn (2008),’Management’, NJ, U.S.A: John Wiley Sons.

Web References:
www. Barclays bank.com

Formal Interview: Mr. Ahmed Al Seoudy, Business Development manager, 2009, Barclays bank, 6th October, 2009.