Marketing Financial Services Barclays Bank Plc - Essay Example

?Marketing Financial Services Barclays Bank Plc. XXXXX XXXX Number: XXXXXXX of XXXXXXXX XXXXXXXXX Code: XXXXXXXX Tutor’s Name: XXXXXXX Date of Submission: XX – XX – 2011 Table of Contents Table of Contents 1 Overview of Company 2 Reasons for Choice 3 Barclay’s Strategy and Principles 3 Current Marketing Issues and Challenges 4 SWOT Analysis of Barclays 6 Bibliography 11 Introduction: The main aim of this paper is to study the SWOT of one of the largest and most trusted banks across the world, i.e. Barclays Bank. A major issue that commercial banks are faced by includes the issue of marketing. Here several different aspects of the company like, marketing tools used by the company, the issues faced in terms of the customers, control system issues faced by the company and several other elements will be discussed. This paper will deal with in detail the issues and challenges faced by Barclays Bank as well as a clear and well drawn out SWOT analysis of the company. The paper will first provide an overview of the company and will also discuss in detail the reasons for choice of the bank. Overview of Company Barclays Banks has been one of the trusted and well known banks across almost 50 countries. The bank has been able to cater to the markets and provide the customers with excellent banking facilities for over three hundred years. Spread across fifty countries, the company employees around 145,000 employees and services almost 48 million customers worldwide. The company deals with several different activities and services like “retail banking, credit cards, corporate banking, investment banking, wealth management and investment management services with an extensive international presence in Europe, the Americas, Africa and Asia” (Barclays Bank, 2011). The bank is made of two main clusters, i.e. Global Retail Banking and Corporate and Investment Banking and Wealth Management. Each of these clusters has a number of individual business units as well. Another major part of the company is the Group Center. The company is head by Group Chairman Marcus Agius and the Chief Executive is Robert E. Diamond, Jr. The company is headquartered in Churchill Place in London. It however caters to the markets across the world both for its products and services (Barclays Business, 2011). Reasons for Choice Barclay’s Bank has been recognised for its international nature and the bank has built its image across Asia, America, Europe and Africa. The company’s brand name and image that it has created allows it to become a name for every home. Also, Barclay has been extremely successful in marketing itself over the years (Barclays Sustainability, 2011). The bank has developed a strong brand image across the globe. Also, Barclay’s overall strategies and corporate focus is also an excellent example to study and analyse the SWOT. Hence this company proves to be an excellent example to study here. Barclay’s Strategy and Principles As in the case of every bank, the main aim of the company is to provide credit to businesses and households, to help improve their growth and jobs. Barclay has also constantly focused on improving its business by diversifying into different areas (Barclays Bank, 2011). A major attempt of the company is to increase its presence in the markets and segments, and this has clearly been achieved by means of innovative products and services for customers across the world (Barclay Card, 2011). All strategies of the company are based on three main aspects i.e. “Earn, Invest and Grow” (Barclays Bank, 2011). The group’s ambition and the overall commitment have grown the company to become a part of the universal banks. Barclays also has set down four main strategic priorities which include, a) To be able to build the best bank in UK, accelerated and increased global growth, development of both retail as well as commercial activities across selected countries outside of the United Kingdom and last but not the least operational excellence (Barclays Business, 2011). It is also crucial to note here that the company is focused on its principles and has developed five main ways to steer the business operations (Barclays Bank, 2011). These have been discussed further. Firstly, the company focuses more on collective and individual success and its principle is winning together. The company’s focus is also on having the best people within the organisation, hence the company ensures developing talent to assist them reach their full potential for their own betterment as well as to keep Barclays in the leading position of the financial industry (Barclays Bank, 2011). Barclay also has a major customer and client focus, and constantly works towards understanding customers and also serving them brilliantly. Innovativeness and pioneering are two major aspects of the business as well and there is clearly a commitment and drive for new ideas and also for increased diverse skills and improved operational excellence as well. Finally, the company is trusted and it works with high levels of integrity and has been able to achieve and retain the trust of all the stakeholders and customers (Barclays Bank, 2011). Current Marketing Issues and Challenges Financial Institutions are faced with numerous issues in terms of the marketing. The financial industry as a whole is faced with numerous issues and challenges relating to the marketing of the products and services (Dobni & Luffman, 2000). It has been argued that the financial institution marketing is not only impacted by the internal management but also by the environmental factors likewise. Similar to the Porter’s five forces which helps in identify the overall strategic position of the company as well as helps identify the position of the competition as well (Ehrlich & Fanell, 2006). All financial institutions are faced with a few changes which have had a direct impact on the marketing of the financial products and services. For instance, in 1999, a regulation was passed by the Government where the financial institutions were deregulated, however institutes are now obliged to market to customers who fall into the ‘do not call’ list. Also, another major issue as recognised by Lowe (2010) is the changes in the demand of the customers and their needs. Lowe explains that the main aim now is more to provide support rather than the financial aspects of the business alone (Farquhar & Meidan, 2010). Hence here the biggest challenge for Barclays is to identify the customers and to also implement a strong and effective customer relationship management system. Barclays has however also been able to provide a solution here by developing the corner programme, which is an avenue for the businesses to find the right solution as well as to realise the needs of the stakeholders and to work towards the same. In terms of the current issues faced by the company, one of the major issues has been the financial losses that the company has incurred due to the high levels of defaults of home owners and the Sub Prime crisis (Farquhar & Meidan, 2010). SWOT Analysis of Barclays The table below provides a gist of the SWOT of Barclays (Barclays Bank, 2011, Barclays Bank, 2011, Barclay's Annual Report, 2009). A detailed analysis has been included below the table on the next page. Strengths Weaknesses * Strong Brand Image * Well Capitalized * Strong Market Presence * Global Presence * Excellent Marketing Strategies * Strong Performance during the past year * Steady share path * First Mover Advantage * Continuous improvements and for products as well a place of the company even during the economic slowdown * Innovations like the ATM and credit cards * Strong and well developed marketing strategies at a global level * Strong Principles and strategies * Strong and effective strategies to overcome the issues * Profit oriented with little focus on customers * Low dividends and hence less attractive to the investors * Lacking strong customer care * Inability to acquire ABN AMRO left the company weakened. * Questionable finances during the financial crisis Opportunities Threats * Strong and strategic foresight * The company has a high change for bettered overall market position and higher capital base as well * Wide product portfolio allows the company to cater to needs across the globe *Indian markets are very promising for the growth of the bank * Higher disposable income of the individuals’ worldwide is opening up newer opportunities for the company. * Possible issues of the economic slowdown can be faced by the Lehman’s assets *Falling property rates leads to higher defaults from the home owners there by leaving the bank with high bad debts * Shifting customer loyalty * Higher competition with the merger of Halifax and Lloyds bank * Too much drastic expansion into newer areas can lead the company to be faced with serious investment issues Barclays has been able to develop a strong brand image in the markets and has also been able to improve the financial position to a great extent. The company has seen an increase of 36.2% i the 2009 financial year as compared to the 2008 year (Barclay's Annual Report, 2009). The company has also shown an increase in the net profits for Barclays and the company has been able to perform despite the economic conditions over the year 2009 (Barclays Bank, 2011). The company’s overall improvement is clearly evident from the share prices of the company as well. The company’s global presence as well as the various ranges of vast investments provides the company with a chance to increase the group appetite and also to improvise on the strategies of the company. Also another one of the major strengths is based on the first mover advantage of the company. This adds a major leverage to the overall marketing of the company. The development of a website for internet banking and customer personalization has been among the few success factors for the company (Benady, 2003). The online medium has been a major success factor for Barclays and has allowed the company to effectively reach out to a wide range of customers across the world. The company has used a wide range of marketing tools to help develop this brand image (Jobber, 2009). Barclays’ main strength has clearly been the ability of the company to use the new media marketing tools as effectively as the traditional marketing tools. Finally another one of the major strengths of the company is based on the pioneering that the company has done in terms of the ATMs and Credit Cards. Finally, in terms of the control systems use by the company, it is evident that Barclays is focused on ensuring that the customers of the bank pas through the credit checks and have strong credit histories, this helps in reducing the risks (Barclays Bank, 2011). It is evident from the report, that Barclays is focused on ensuring customer benefits and also customer service is a key focus (Farquhar & Meidan, 2010). By adopting the control system, the company can strike a balance between the needs of the business, like increasing volumes, reduced operational costs and also controlling the credit risks, with the needs of the customers which include excellence in customer service, and also appropriate product offers and accurate marketing. In simpler terms the company is focused on strong customer service management (Webster, 1988). The company has used excellent marketing strategies and has been able to transfer the brand equity of the acquired brand into its own, however in terms of the customer care, the company has been faced with numerous issues and complaints. The company focuses a great deal on politics and for a stronger and effective future it is better for the company to focus on the customers more. Also, with the economic meltdown, although the company has been able to keep up the finances, the share values clearly indicate the company’s health, which in turn has led the investors away from the company (Barclays Sustainability, 2011). Another major weakness has been the one where the company has built on its own position with the transaction of acquirement gone badly for ABN AMRO. The company has numerous strengths which it can use to improve its opportunities. Of these, the strategic foresight of the company is among the best as it will help the company in better decision making and also better business acquisitions (Dobni & Luffman, 2000). Also, the increased market share of the company is a chance for the growth and development of the company with lesser and limited overhead costs. Also, the wide range of products of the company is also a means to help in better cross setting opportunities (Ehrlich & Fanell, 2006). Among the various threats, Barclay faces an intense amount of threat from the ever growing technology, which the company has not implemented to the best use as yet, unlike companies like HSBC, which has a competitive advantage over Barclays (Huertas, 2007). The fact that HSBC has been able to use new media marketing to the fullest extent and technology to compliment its strengths, it is evident that Barclays lacks in this area and can work on improving the overall condition. Also, factors like the mergers of the two major banks on the high street also act as a major threat for the company and impact the overall business for Barclays. A risky move that the company has also undertaken is entering into the Asian markets which have also led to serious investment issues both for the company as well as the investors. Also, the current economic condition of the global markets is also playing a major impact on the overall success of the bank as well as all commercial banks. Barclays clearly needs to focus on improving the strategy in terms of its marketing and this can be done by better one on one marketing. These assists the company in better customer care and also helps the company meet the customer needs more effectively. As a whole, as discussed earlier the secret to the success of financial industry is presently the customer support and care that the company provides and not only the finances. The banking sector has slowly become an extremely competitive sector and here the bank now requires building its competitive advantage back. Conclusions: In conclusion, it is evident that the company has a strong ability to market itself as well as sustain the marketing efforts (Barclays Sustainability, 2011). The company has also been able to build strong brand image and globally market itself to meet the needs of individuals and businesses across the world. Barclays has been able to effectively use the various elements of marketing and has used advertising and media as a strong brand building for its image (Jobber, 2009). One of the major strengths of the company has always been the brand recognition and customer centric approach that Barclays adopts. This is one of the several reasons that the company has been able to grab the attention of individuals and businesses across the globe (Webster, 1988). Based on the above report it is evident that although the company has a number of weaknesses and threats, the strengths and the opportunities for the company act as a leverage and permit the company to work more effectively and efficiently (Ehrlich & Fanell, 2006). Bibliography Barclay Card. (2011). Barclaycard Account. Retrieved February 13, 2011, from http://www.barclaycard.co.uk/personal-home/index.html Barclay's Annual Report. (2009). Annual Reports. Retrieved February 25, 2011, from http://www.barclaysannualreports.com/ar2009/files/Annual_Report_2009.pdf Barclays Bank. (2011). Key Facts. Retrieved February 16, 2011, from http://group.barclays.com/About-us/Barclays-at-a-glance/Key-facts Barclays Bank. (2011). Our strategy and guiding principles. Retrieved February 13, 2011, from Barclays: http://group.barclays.com/About-us/Who-we-are-and-what-we-do/Our-vision-and-strategy Barclays Business. (2011). Barclays Commercial. Retrieved February 23, 2011, from http://www.business.barclays.co.uk/BBB/A/Content/Files/Retail_Richard_Lowe_outline.pdf Barclays Sustainability. (2011). Responsible finance. Retrieved February 23, 2011, from http://group.barclays.com/Sustainability Benady, D. (2003). The Voice Squad, Sector Analysis: Telecoms. Precision Marketing , 19-21. Dobni, C. B., & Luffman, G. (2000). Implemeting Marketing Strategy through a Market Orientation. Journal of Marketing Management , 895-916. Ehrlich, E., & Fanell, L. (2006). The Financial Services Marketing Handbook. Jaico Publishing House. Farquhar, J., & Meidan, A. (2010). Marketing Financial Services. Palgrave Macmillan. Huertas, T. F. (2007, June 06). The Future of Retail Banking in the UK. Retrieved February 13, 2011, from http://www.fsa.gov.uk/pages/Library/Communication/Speeches/2007/0606_th.shtml Jobber, D. (2009). Principles and Practice of Marketing. McGraw Hill Higher Education. Webster, F. E. (1988). Rediscovering the Marketing Concept. Business Horizons , 29-39. Read More