StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Evaluation of the Feasibility, Suitability, and Acceptability - Literature review Example

Cite this document
Summary
The Lloyds Banking Group, which was previously known as the Lloyds TSB became the largest retailing banking organization in the year 2009. This is after the banking organization acquired the Halifax Bank of…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER96.6% of users find it useful
Evaluation of the Feasibility, Suitability, and Acceptability
Read Text Preview

Extract of sample "Evaluation of the Feasibility, Suitability, and Acceptability"

Table of Contents: Introduction………………………………………………………………………………3 Evaluation of the feasibility, suitability, and acceptability…………………………….3 Alternative Strategy………………………………………………………………………8 Conclusion…………………………………………………………………………………10 Bibliography……………………………………………………………………………....11 Appendix………………………………………………………………………………….. 1. Introduction: The company under review is the Lloyds Banking Organization (LBG). The Lloyds Banking Group, which was previously known as the Lloyds TSB became the largest retailing banking organization in the year 2009. This is after the banking organization acquired the Halifax Bank of Scotland (Boberski, 2010). This means that the banking organization could now receive the benefits that come with economies of scale. These benefits include an access to discounted supplies, capital, and markets that were previously controlled by Halifax Bank of Scotland. To stay afloat as the biggest banking unit, in terms of market share, and the number of customers, the banking organizations uses the business level strategy (Page and Tosh, 2005). A business level strategy normally involves a situation whereby the company will identify the method it will use for purposes of competing successfully within a particular market. This method is by developing an efficient customer service (Boberski, 2010). The company believes that through an efficient customer service, it would manage to achieve an increase in its profitability. Under the Porters generic strategy, this is referred to as focus. 2. Evaluation of the feasibility, suitability, and acceptability: This section analyses whether the customer service strategy by the organization is efficient and successful. This is by focusing on whether it is feasible, acceptable and suitable. 2.1. Feasibility: The customer service strategy, initiated by the company is feasible. For example, the banking organization is currently undertaking an improvement of their customer service system, for purposes of incorporating a digitized customer service system (Somashekar, 2009). This means that the company will manage to reduce the number of human employees, who are working at the organization. The company has set aside approximately one billion pounds, for the digitization of their customer service department. This money would be used for purposes of financing the retrenchment of about 9000 employees, in its 150 branches. Furthermore, the company would use this money for purposes of developing a digital wallet (Boberski, 2010). This is an online payment system that would allow customers to shop online, by using their bank accounts. This is an aspect that is attainable, and a good example is Apple Pay, an online payment solution developed by Apples. Banking organization in the United Kingdom, are currently engaged in the production of an online banking system that is called ZAPP (Gandy, 2014). LBG is one of the companies that is leading into funding the research and development of software that would make it possible to initiate and use the ZAPP technology. By the year 2020, existing research indicates that over 35% of the existing market share of the traditional banks would be up for grabs. This is because of the emergence of digital banking (Gandy, 2014). Furthermore, in 2013, there was an approximately 50% increase in the use of mobile banking in the United Kingdom. This included an online sale and acquisition of the traditional services offered by banking organizations (Gandy, 2014). The company believes that by developing a digitized customer service system, then chances is high that it would achieve efficiency in the manner which it offers its services and products. However, the major disadvantage of this process is that would lead to job losses, of approximately 9000 workers, and the closure of some of its branches (Engler and Essinger, 2000). This is because banking would now be carried out through the internet. Therefore, the objective of spending one billion dollars is for purposes of improving its mobile and online capability, enhancing its telephone services, and creating a better analytics. Furthermore, the figures of the company depicts that it has approximately 10 million customers who prefer to use digital services, while carrying out their banking activities (Mollona, 2010). This is a massive number of customers, and this indicates that the integration of the digital banking system, into the organization will satisfy the needs of these people. Furthermore, people using its mobile banking system have grown substantially over the last three years. For example, in the year 2012, the company had approximately 3.3 million people, who used its mobile banking system (Gandy, 2014). This is an indication that there is a demand of a digitized banking system. Therefore, the rolling out of a digitized banking system is a feasible project. 2.2. Suitability The major objective of using the value chain analysis is to explain the suitability of the decision by the company to focus on customer service, as a business level strategy. The company believes that by focusing on customer service, it will be able to contribute to the overall margin of the organization (Machiraju, 2008). The margin under this case is the perceived customer values. The primary and major value chain activities, which are identified for the Lloyds Banking Group, includes Marketing and Sales, Operations, Work Allocation and Customer Service (Ellinger and Lomnicka, 2005). These activities manage to play a contribution in the creation of values. The major competency of Lloyds lies on its efficient customer service, and its capability to provide high value products. Furthermore, the company has the capability of quickly dealing with customer requests (Engler and Essinger, 2000). This is for purposes of ensuring that the company manages to achieve its objective of creating a social and economic value amongst its stakeholders. The margin, for a variety of companies like Mercedes or Microsoft is creation of economic profits, through the perspective of the customer. In the case of LBG, this is carried out for purposes of providing the customer with emotional and social values (Coleman, 2009). Through these activities, the company hopes in creating a financial value, through the investment and savings sector at the LBG. There is a perception that if the customer of the organization is happy with the efficiency in which he or she is served, this is on trivial matter such as opening bank accounts, direct debits, etc, then; they would recognize the company as efficient when it comes to the production of services (Platz and Fitch, 2001). This is useful to the company, when the customer seeks to access the services that have the capability of generating income to the company. These services include the acquisition of personal loans, and mortgages (Eldring, 2009). The company views the customer’s ability to efficiently recognize their designated processes as an important part of their future. This is further reinforced by the vision statement of the company, which denotes that the vision of the company is to be regarded as the best financial company by shareholders and customers of the organization (Laurentis, 2005). This vision statement is unusual, and this is mostly because it does not identify or highlight any issue regarding the growth of the company. This is normally a priority, and a key driver for majority of organizations. However, the company manages to mention the shareholders (Ellinger and Lomnicka, 2005). This is an indication that LBG seeks to gain the confidence of its shareholders, before focusing on growth, as its major driver. It is possible that this could be because of the current financial problems facing the company, and their desire to maintain their position as the largest banking organization in the United Kingdom (Ellinger and Lomnicka, 2005). Once this objective is achieved, it is possible that the company would develop a new vision and mission statement. Because shareholders are depicted in the vision statement of the company, it enables them to acquire a high level of power, within the LBG (Davis, 2009). This is better depicted in the horizontal diversification, which characterized the HBOS, acquisition. The shareholders of the bank, lost confidence in it, resulting to the plummeting of the share price of the organization. Therefore, through an efficient customer service, the organization will manage to increase its market share, resulting to an increase in profitability (Gandy, 2014). 2.3 Acceptability The customer service strategy is acceptable to the shareholders and employees of the organization. This is mainly because by focusing on meeting the needs of customers, then chances are high that the company would manage to increase its market share. Shareholders of a company are normally concerned with the positive brand name of the organization (Ellinger and Lomnicka, 2005). This is one of the major reasons why the investors of a company would invest in it. It is impossible to develop a positive brand name, without developing policies aimed at satisfying the customer, or focusing on the needs of the customer (Coleman, 2009). It is based on this fact, that the shareholders of the company would accept such kind of a strategy, by the business organization. Government regulation agencies normally approve services aimed at catering for the needs of customers (Janssen, 2009). However, such measures should be undertaken within the law. This includes avoiding the rolling out of services or offers that aim to take advantage of the company’s dominant position, over its rivals. LBG is the biggest banking organization in the United Kingdom, and it is not supposed to abuse its dominance by promoting unethical business activities (Ellinger and Lomnicka, 2005). This includes reduction of banking charges to the minimum, with the intention of removing other banks, out of business. Customers on the other hand would accept this strategy, because it aims at benefiting them. On the other hand, employees of the organization would tend to resist it, because it would threaten their jobs. An example is the use of the digital customer service system (Gandy, 2014). 3.0 Alternative Strategy of the Organization: An alternative strategy that the business organization can undertake is referred to as differentiation. Differentiation strategies are one of the three strategies identified by Porter that a company can use for purposes of pursuing their objectives. The other two are focus, and cost leadership strategies. Currently, Lloyd Banking Group is engaged in the use of focus, and cost leadership (Gandy, 2014). This is by concentrating or focusing on developing an efficient customer service. On the other hand, differentiation strategy involves developing the products or services of the organization in a unique manner that makes it possible to compete in an efficient and effective manner (Coleman, 2009). Examples of companies that have effectively and successfully used the differentiation strategy include Asian Paints, Nike Athletic Shoes, Hero, Apples, Mercedes-Benz, and BMW Group Automobiles. The company should therefore develop measures aimed at promoting and offering unique banking services. To achieve this objective, the company has to invest heavily in research and development (Gandy, 2014). A strong research and development department will enable the company to develop innovative ideas and measures that can play a great role in ensuring that the company is able to satisfy the needs and demands of its customers. Furthermore, it is also possible for the company to mix, the use of focus, and the differentiation strategy, in their bid of enacting an efficient customer service (Eldring, 2009). It is important to understand that the focus strategy can always be used together with differentiation, or even cost leadership strategy. LBG normally uses this strategy of focus, together with cost leadership strategy. It is important to explain that the services of the organization are the cheapest, in the United Kingdom. This is the reason this banking organization has the largest number of customers in the United Kingdom. However, the use of differentiation strategy would force the company to increase the prices of its services. This is because it would take a considerable amount of investments and capital that is invested in research and development (Eldring, 2009). This strategy can be used, in a target market that has some specific needs and demands. This situation is applicable to LBG, because it has approximately 10 million customers who prefer to use the internet for their banking, and 3 million customers, who prefer to use their phones, to carry out banking activities. The company can take advantage of these needs, and invest heavily in research for purposes of coming up with technological tools that can help in satisfying these needs. 4.0 Conclusion: The company decided to focus on achieving efficiency in customer service. This is aimed at creating loyalty, and hence increasing the customer base of the company. Concentrating on customer services, can be referred to as focus, under the porters generic strategies. This is a useful strategy that companies normally use for purposes of achieving a competitive advantage over their rivals. This advantage is achieved by providing a certain service, to the highest quality, when compared to its rival companies. This strategy is feasible, acceptable and suitable by the company. This is because the company has the resources, to follow this strategy, and it is also acceptable by the shareholders. Bibliography: Boberski, V. (2010). Community banking strategies steady growth, safe portfolio management, and lasting client relationships. Hoboken, N.J.: Wiley. Top of Form Bottom of Form Coleman, L. (2009). Risk strategies dialling up optimum firm risk. Farnham: Gower. Top of Form Bottom of Form Davis, S. (2009). Banking in turmoil strategies for sustainable growth. Basingstoke: Palgrave Macmillan. Top of Form Bottom of Form Eldring, J. (2009). Porters (1980) generic strategies, performance and risk an empirical investigation with German data. Hamburg: Diplomica Verlag. Top of Form Bottom of Form Ellinger, E., & Lomnicka, E. (2006). Ellingers Modern banking law (4th ed.). Oxford [England: Oxford University Press. Top of Form Bottom of Form Engler, H., & Essinger, J. (2000). The future of banking. London: Reuters. Top of Form Bottom of Form Gandy, A. (2014). Banking Strategies Beyond 2000. Hoboken: Taylor and Francis. Top of Form Bottom of Form Janssen, S. (2009). British and German banking strategies. Basingstoke [England: Palgrave Macmillan. Top of Form Bottom of Form Laurentis, G. (2005). Strategy and organization of corporate banking. Berlin: Springer. Top of Form Bottom of Form Machiraju, H. (2008). Modern commercial banking (2nd ed.). New Delhi: New Age International (P). Top of Form Bottom of Form Mollona, E. (2010). Computational analysis of firms organization and strategic behaviour. New York: Routledge. Top of Form Bottom of Form Page, R., & Tosh, P. (2005). Leading your business to the next level the six core disciplines of sustained profitable growth. Westport, Conn.: Praeger. Top of Form Bottom of Form Platz, T., & Fitch, T. (2001). Business banking (2nd ed.). Hauppauge, N.Y.: Barrons Educational Series. Top of Form Bottom of Form Somashekar, N. (2009). Banking. New Delhi: New Age International (P). Appendix: Appendix One: Lloyd Banking Group This is a British Financial Institution that was formed by the acquisition of HBOs, in the year 2009. The acquiring company was Lloyds TSB. Appendix Two: Porters Generic Strategies It explains how a company may choose to pursue a competitive advantage within its chosen market scope. Porter identifies three strategies, namely differentiation, focus, and cost leadership. Appendix Three: Customer Service. This refers to the services an organization initiate, for purposes of serving the needs of its customers. The Lloyds Banking Group initiated a series of customer service strategies for purposes of serving the needs of their customers, and earning their loyalty. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(THE EVALUATION OF CURRENT STRATEGY FOR Lloyd's banking group Essay, n.d.)
THE EVALUATION OF CURRENT STRATEGY FOR Lloyd's banking group Essay. https://studentshare.org/business/1853232-the-evaluation-of-current-strategy-for-lloyds-banking-group
(THE EVALUATION OF CURRENT STRATEGY FOR Lloyd'S Banking Group Essay)
THE EVALUATION OF CURRENT STRATEGY FOR Lloyd'S Banking Group Essay. https://studentshare.org/business/1853232-the-evaluation-of-current-strategy-for-lloyds-banking-group.
“THE EVALUATION OF CURRENT STRATEGY FOR Lloyd'S Banking Group Essay”. https://studentshare.org/business/1853232-the-evaluation-of-current-strategy-for-lloyds-banking-group.
  • Cited: 0 times
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us