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Barclays Bank Financial



Introduction

Barclays Bank group is a multinational financial organization that has its presence spreading across Europe, Australia, Asia, Middle East and African continent. The bank offers retail banking, corporate banking, wealth management and investment banking services. With its approach to banking, the bank serves all its customers efficiently and effectively across the globe (Ackrill & Hannah 2001, p. 23). The bank has developed management strategies that help to achieve its objective that is to offer financial services that meet the real needs of the global client base. The current paper examines the Barclays Bank’s strategic position in the UK external and market environment.

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Barclays External and Market Environment

The growth and strategic management strengths of Barclays Bank group are evident in the manner in which it manages its hurdles in the global competitive financial market. The global presence of the bank aligns it to the external market forces. The influential forces of change that affect global businesses have not spared Barclays Bank either. The macro-environment is ripe with powerful forces that have the potential of grounding the bank and its operations (Drejer 2002, p. 78). The United Kingdom’s population of close to 70 million people provides a ready market for Barclay’s banking services. With the increase in immigration, the bank can only look forward to rising demand for its financial services. However, constant fluctuations in the population do not often predict positive change for the market.

The economic trends are likely to translate to positive change for the bank. This argument follows understanding that change in population is likely to affect the macro-economic status of the country. The high rate of employment in the UK that stands at 70.6% is a pointer to the wealth status of households in the United Kingdom (Ackrill & Hannah 2001, p. 54). The high rate of employment implies economic competition and economic growth in the country. The fact that many people are employed points to the reason for high rates of inflation in the United Kingdom.

The multicultural U.K. society enhances co-existence among the different communities. The absence of racial, religious and ethnic discrimination promotes a conducive business environment. Such business environments support Barclays’ business objectives. The diverse nature of the socio-cultural environment creates a dynamic and robust business environment that Barclays Bank has continued to exploit. Exploitation of such business environment enables the bank to build brand image that cultivates customer loyalty. It is such customer loyalty that enables Barclays Bank to remain profitable in the competitive and dynamic business environment in the United Kingdom (Drejer 2002, p. 78).

Success of the bank also depends, to some extent, on the technological advancement that the United Kingdom boasts about. The United Kingdom is ripe with science, entrepreneurship and technological investments which are boosters of strategic business. The bank can capitalize on these technological and entrepreneurial cultures to create innovations that help to meet the dynamic demands of their customer base. Creation of efficient and effective customer-friendly service points is a strategy that has the prospect of boosting the bank to realize its strategies and grow its business beyond the present levels.

Analysis of the United Kingdom’s political and legal environment would provide Barclay’s management with a clear picture of the external business environment on which it is operating. The United Kingdom’s legal environment is very dynamic and presents potential for huge effects on the operation of businesses. As a strategic investor, Barclays Bank has to come to terms with the reality of the employment legislation and taxation issues. Such taxation issues are likely to hinder the development of business options that might be on the pipeline (Drejer 2002, p. 78). The changes in business taxation legislation may effectively affect the operations of any business in a competitive environment, especially if such legislation is sudden. Such legislation is likely to cause inflation in the operational costs and slice the pie of the net worth profit of any business.

The employment regulations, on the other hand, have the prospect of altering the human resource plans of the bank. Such effects are not possible if human resource management practices are not consistent with employment legislation. This is one of the areas in which the United Kingdom’s legal environment remains dynamic. The legal environment may affect management strategies as it aligns its operations to the legal structures in the market. Besides, Barclay’s Bank group must live up to the company’s laws that operate in the United Kingdom. Such laws are subject to review and possible amendments (Drejer 2002, p. 58). The implementation of such laws may have far-reaching effects in the functioning and operations of the bank. The legal external environment in the U.K. thus remains sloppy and the subject to alterations that deserve consideration before formulation of strategic business approaches.

Although the legal environment is dynamic and unpredictable, analysts argue that the United Kingdom’s economy thrives in a stable business environment that has overcome the economic turmoil that other economies did not manage to overcome. The government of the U.K. is supportive of vibrant business environments due to their potential of contributing towards economic progress of the country. The government policies on trade and investment favor private-sector-led development and investment in the money markets. The United Kingdom is the 6th largest economy globally.

These credentials make it to be among the most attractive investment markets across the globe. This state of affairs gives the strategic management team of Barclays Bank the challenge of devising and implementing bank strategies that are capable of harnessing the opportunities that this market presents. With the much legislation that characterizes the U.K. business environment, the United Kingdom remains one of the easiest places to invest and run a business (Ackrill & Hannah 2001, p. 45). The versatile nature of the economy gives Barclays Bank opportunity to plant and execute its marketing and investment strategies.

The global presence of Barclays Bank is an opportunity that it can harness to thrive in the United Kingdom’s business environment. The brand image that it has built helps it to market its services even in the foreign markets. Its sponsorships such as the Premier League football is an opportunity that the bank can easily transform to marketing of its services and products in the United Kingdom’s market. The innovation strength that the bank has a record for can become an opportunity for the success of the bank in the United Kingdom. The bank has the fame of introducing the first ever credit card. Innovation of cashless transactions and use of cards are the strategic steps that can easily package Barclays Bank’s products and services with a new brand image that is persuasive to customers. Therefore, the bank is capable of building consumer loyalty that is essential for business success even in versatile and competitive business environment such as the United Kingdom.

Having acquired Lehman’s assets just before its collapse, the bank stands a better chance to cut deals with liquidation firms. This strategic move also gave the firm better chance of selecting prime locations for investment and establishment of its branches in the United Kingdom. The dynamic nature of the bank gives it competitive advantage over its competitors in the United Kingdom’s market. The bank has a wide range of cross-cutting business opportunities that effectively, efficiently and conveniently address the needs of clients. The asset base and a global presence and influence of Barclays Bank in the financial market brand it as a leader in the market (Drejer 2002, p. 78). The image that the bank has across the globe gives it advantage and potential to expand its operations and provision of financial services and products to clients in the United Kingdom.

The global presence of the bank is one of the causes of the threats that the bank is facing even in the United Kingdom’s market. The operations of the bank in a dynamic legal and legislative environment that characterize the United Kingdom are threats to its operations and expansion strategies. The bank must thus balance between the expansions and business strategies and the legal requirements and policies in operation in the United Kingdom’s environment. The diversification of the financial products and services that the bank is offering to its United Kingdom’s clients may be a threat to its client base. This reality is clearer considering that some customers might choose to seek specialized services from other firms that work in one of the financial products and services that the bank is trading the United Kingdom’s market.

The bank has also built a negative reputation in many regions where it operates. The negative label and tag of closing new branches for non-performance is likely to scare customers away from embracing Barclays’ products and services in the United Kingdom. Hill and Jones (2012, p. 90) cited that the business options and the market environment can be favorable with the alignment of the bank’s strategies and approaches. However, such alignment must consider the realities of the policies in the United Kingdom. The bank must thus consider the external political, economic and legal structures that operate in the U.K. markets that have the prospect of regulating and significantly affecting the profitability of the bank. With these considerations in the strategic management and marketing, the bank has very good chances of growing its operations in the United Kingdom markets and beyond.

Financial and Human Resource Competencies of Barclays Bank

Barclays Bank a has strong financial base that enables it to succeed in a dynamic and slippery financial industry. Barclays Bank in the U.K. sources its finances from the parent bank and the investors in the financial sector that hold shares with Barclays Bank. The financial base of the bank enables it to manage its operational costs and the bills relating to its business strategies. It uses the financial resources to pay the different expenses that the bank incurs. The financial competencies of the bank are evident in the manner in which it sets its priorities in budgeting (Hill & Jones 2012, p. 119). Although the company is excelling in its financial, strategic approaches, it needs to continue maintaining its financial position by providing an effective and strategic service. The strategic and effective approach of investment of financial capital of the bank enables it to provide better services at customer friendly rates. Maintenance of costs and maximization of profits enables the bank to build its financial base to achieve its strategic goals.

The financial strength of Barclays Bank is in its investment in the financial capital that it uses to manage the financial services on which it operates. The bank’s financial competence is in its ability to withstand the shaking financial situations in its business environment and across the globe. The bank has overcome the global financial crises that stirred and shook the financial institutions with others closing down their businesses. The ability of the bank to surmount the financial meltdown that affected most financial institutions shows its prudence and financial competence. Realization of such financial competence comes from the bank’s strategic investment in the study of the financial markets’ trends and patterns. For example, the decision of the bank to purchase the assets of Lehman brothers just before the financial crises was strategic (Pinedo & Walter 2013, p. 89). The decision enabled the bank to build its financial base that enabled it to weather the effects of the crisis. Whereas Lehman ended up closing down its businesses due to the biting effect of the global financial meltdown, Barclays Bank survived the crisis and continued to operate and expand to other regions across the globe.

The financial base of the bank is one of the key competences that enable the management to realize its strategic missions across the globe. The bank conveniently relies on its financial base to acquire assets and negotiate better deals with other companies that help to grow its capital. The capability of the bank to manage all its operational costs, maximize on profits and returns on investment points to its competence. It shows the competence of the bank in making key decisions that boost its financial standing (Drejer 2002, p. 112). Although the bank has had its unique challenges about the management of the business, the financial competence of the bank has helped it to add value to its business. The fact that most financial services businesses closed down due to the reeling effects of the global financial crisis but the bank withstood helped to build its image. The bank has since benefited from customer loyalty out of the belief that the bank remains stable and can overcome short-term and long-term ripple effects of the macro-economic forces operating in an environment.

Building brand image is the key to the success of products and services in a competitive market. The ability of Barclays Bank to build customer loyalty has largely been the effect of its financial competence. The reliability and sustainability of the bank’s operations enable it to remain profitable while also offering its services and products at relatively lower costs than its financial market competitors in the United Kingdom. The bank thus attracts more customers even from other competitors since it packages and brands its products and services at customer-friendly rates and policies. Such achievement is challenging to realize in the absence of strong financial competence.

The bank only invests its financial assets in new business environments. By using its strategic investment appraisals, the bank ensures a steady and sustainable balance between investments and returns on investment. Such benefits enable the bank to build its image in the financial markets, attract more clients who chose to buy shares from the bank and consistently trade with the bank. Therefore, it is safe to argue that the financial competence of the bank has enabled to build its image in a competitive business environment and succeed in attracting more clients in the market (Hitt, Ireland & Hoskisson, 2008, p. 80). The bank boasts of financial competence that enables it to add business value. Prudent and strategic investment of such financial assets enables the bank to realize benefits in all its investments.

In terms of the human resource, the bank boasts of highly motivated and passionate employees that provide excellent and customer-focused services. The human resource department of Barclays Bank focuses on hiring employees with skills and knowledge that fits and directly address the needs of customers. The recruitment of employees considers the skills and knowledge gaps that the bank has within its operational structures. The competence of Barclays Bank personnel adds a lot of value to its business and service delivery to the customers. The bank has managed to use its human resources to deliver effective, efficient and customer-based products and services.

The employees of the bank are key stakeholders to the functioning and operations of the bank. As such, the management considers the needs and welfare of the employees and constantly ensures that it addresses the employees’ grievances, if any. The management also involves the employees in making key strategic operation decisions that relate to the transformation of service delivery approaches (Hitt, Ireland & Hoskisson 2008, p. 147). With their involvement, the employees have motivation and passion for implementing new resolutions that the management posts since they consider themselves stakeholders in the bank’s strategic direction. The motivation favors the bank in that the employees can focus on offering services to suit the needs of customers (Hill & Jones 2012, p. 79). Besides, involvement of customers in the management of the bank helps them to tap into the innovation and inventive strengths and attributes of the employees. Consequently, the bank benefits from the diversity of ideas and innovative strategies, some of which come from the employees themselves.

The company considers skills and experience of the employees during the recruitment. The compensation and remuneration that the employees receive follow a careful assessment of the profile and competence of an individual employee. The salary that the employees receive is commensurate with skills, knowledge and experience they have. By offering competitive salaries and allowances, addressing the needs of the employees, the bank has managed to create a team of employees. The team works collaboratively with service delivery and customer satisfaction being the priority (Hill & Jones 2012, p. 132). Careful and strategic consideration of employee succession planning also enables the bank to retain most of its top-performing employees that rise the ladder as they serve customers. Retention of the best performing employees not only promotes customer loyalty but also ensures that services that customers receive are satisfactory.

Recognition of talents and skills of the employees is the strategy that enables the company to remain holding to its best-performing employees. The company offers compensations and awards to the best-performing employees whose performance is above standards. This strategy pays back in the long run since the company remains with employee base that comprises very competitive, innovative and knowledgeable employees that are instrumental in the operations of the bank in the United Kingdom and beyond. With this team of employees, Barclays Bank in the U.K. has managed to grow its operations and branches within a short period and influence the financial markets in its favor. Investment in the training, capacity building and motivation of employees is a value-addition strategy for Barclays Bank in the U.K. The bank focuses on this strategy in order to achieve its strategic objective of remaining competitive and a bank of choice for a customer in the versatile United Kingdom’s market.

Organizational Structure of Barclays Bank

The organizational structure of Barclays Bank in the United Kingdom is one of the tools it uses in building its competitive advantage and value in a competitive market. The bank adopts and operates within the structure that emphasizes work specialization. Division of roles and flow of responsibility follows a pattern where one occupies an office and department relevant to his or her area of training and where they perform best. Specialization and division of roles follow areas of competence and experience. This strategy enables the bank to install and sustain result-oriented leadership and innovative management that focuses on creating product and service brands that meet the needs of customers. This strategy enables the bank to benefit from cutting-edge service delivery that keeps pulling clients from competing firms in the United Kingdom’s market.

The organizational structure of a company enhances chances of people with talents and skills to climb positions of leadership and responsibility (Hitt, Ireland & Hoskisson 2008, p. 34). This structure does not only ensure that service delivery is efficient and effective but that the top performing personnel stick longer with the bank. Successive planning enables the bank to fill management vacuums with professionals who have experience, history of the firm and in-depth understanding of the culture and strategic direction of the company. The organizational structure also enhances chances of top performing employees climbing up the ladder to become top managers of the bank and its operations (Hitt, Ireland & Hoskisson 2008, p. 80). This approach motivates employees to remain competitive, innovative and high achievers. Whereas the employees benefit from incentives such as promotion, the bank boosts its operations as the employees use their wealth of skills and knowledge to create new opportunities. Such opportunities that emanate from creativity and innovation give the bank a cutting-edge against its competitors.

The organizational structure of the Barclays Bank follows a structure of departmentalization. The functions of the banks, its products and services operate under systematic departments with its heads. Each department performs department-specific roles that address the needs and demands of customers. For example, the customer department focuses on creating customer-focused operations in the provision of financial products and services. Under the departmental head researches and introduces competitive strategies to meeting customer demands. Whereas there is some level of independence at the departmental level, the departments are not autonomous. Instead, the departments work in collaboration with other departments under the leadership of the executive director who also reports to the chief executive officer. This structure enables the bank to strategically, competitively and effectively meet the market demands while also maintaining harmony in the functions of each department and departmental heads.

The flow of responsibility, hierarchy of command at Barclays Bank is built in the vertical direction. In the vertical hierarchy of command, instructions follow a top-down approach. In such arrangements, senior managers instruct managers and employees under them and guide their operations. However, at Barclays in the United Kingdom, the chain of command is somehow consultative and iterative. The top directors are accountable to the chief executive officer but also inform and influence the strategic decisions and direction that the bank takes and implements. This approach promotes consultative and collaborative work environment where everyone feels important and his or her input is significant in the success of the bank. The directors, managers and junior executives thus have a stake and work professionally to realize the objectives of the firm. In fact, this structure explains the ability of the bank to always devise innovative approaches to meet the dynamic needs of customers and remain competitive in each market.

Conclusion

Barclays Bank remains one of the leading multinational financial and banking institutions across the globe. Its success in the United Kingdom is partly due to the management’s ability to keep pace with the changing external environment of the market. The bank uses the challenges and threats in the market to transform its services and meet the evolving needs of its clients. With specialized employees, strategic management of human and financial resources, the bank has cultivated an organizational culture and structure that focuses on meeting customer needs. These strategies explain the level of success of Barclays Bank in the United Kingdom. Any assessment of the strategic management of Barclays Bank must thus consider all its internal external environment dynamics.

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