Unit 2 Strategic Management R/508/0486 Regent College
Unit 2 Strategic Management R/508/0486 Regent College
11 Pages 2645 Words374 Downloads
Strategic management is defined as the procedure which includes the development as well as implementation of plan developed by the management team in an organisation. Strategic plans provides the direction or path which drives firm towards accomplishment of business objectives. Strategic management process also involves establishment of targets as well as goals by top level management in an enterprise considering the availability of resources. The process of strategic management is a continuous one that changes as the organizational goals and objectives. It supports business entity in increasing effectiveness as well as efficiency.
The present report has focus on identifying the strategies adopted by the Lloyds Bank in order to achieve success and foster growth in financial sector. It also emphasizes on identifying the strategic position of a firm in an industry.
Company Profile :
Lloyds Bank is recognised as the retail and commercial financial institution which has its branches in mainly in two location these are wale's and England. It is also popular as Big four clearing banks. Lloyds Bank is the largest financial institution in Britain. An organisation has an extensive branch which enables firm to deliver the services to the wide number of customers. Business entity also provides 24-hour telephone and online banking services. Bank has wide number of customer and some clients have small business accounts. Firm also operates many offices, brand headquarters as well as data centres. Lloyds Bank provides wide numbers range of banking as well as other financial services. An organisation also offers funds domestic , regional and national charitable institutions working to tackle disadvantage across England and Wales. The strategy of forming the partnership with charitable institution has allowed business entity to gain popularity. It has also provided firm a chance to generate brand awareness. Company also offers wide range of financial products as well as services such as savings, current account, credit cards , mortgages and loans (Johnson,2017)
Objective of Lloyds Bank is to support Britain in developing prosperity. An organisation also intends to operate more responsible business by catering or fulfilling the needs of wide number of customers. Vision of Lloyds Bank is to become the leading institution in financial sector. Business entity in order to accomplish its vision has focus on three values these are giving priority to the needs of customers, simple business procedures and making different business different from other competitors by providing additional services to customers.
Business model: Lloyds Bank have unique business model which has supported a firm in gaining competitive advantage. It has also enabled business entity in continuing meeting their customers’ evolving needs and deliver the best customer experience. In 2011, company has adopted the strategy to transform business which has enables business entity to increase its competitive strength. Another strategy adopted by an organisation is ow risk participation choices and strong capital position which has supported business entity in maintaining the financial stability. Simple business model plan has provided firm an opportunity to gain cost advantage. Objective of an organisation is to provide high level of return as well as satisfaction to stakeholders (Houdet,Trommetter and Weber, 2012)
Lloyds Bank has also adopted the strategy to sell their services or financial products through various iconic brands. This plan has enabled business entity develop the understanding about the needs as well as demands of customers in more effective manner.
The another important strategy which is utilised by Lloyds Bank is multi channel approach. It has also supported firm in increasing sales as well as profitability Company has also designed the strategy to make investment in providing training to the employees. As this strategy will assist an organisation in increasing working efficiency and productivity. It will also help firm in providing high level of satisfaction to customers.
Lloyds Bank has team of highly skilled and talented workforce which has supported firm in expansion of business.
As an organisation is operating in big industry, business entity might have to face stiff competitors as well as challenges in terms of maintaining its position in the market or industry. Some big competitors are Nordea bank, DNB bank, OTP bank plc etc.
State of financial sector
The service industry such as financial sector is contributing approximately 79 percent to GDP. There has been tremendous growth in financial sector since last few years. The financial services' industry is particularly important as this sector makes significant contribution towards economic development of nation. Financial institutions are supported by legal authority in terms of managing as well as expanding business. Banking sector in United kingdom is considered to be the largest in Europe. Government in the nation But the changes in political situation in UK during the Brexit has significant as well as direct impact on the economic condition of the country as well as on the growth of financial sector. There has been decline in the income of people and economic crisis has lead to the decrease in the demand as well as supply of financial products or services (Pollanen,Abdel-Maksoud and Mahama, 2017)
PORTERS Five force model
This is an appropriate model for analysing effectiveness of an industry in which the Lloyds Bank is operating.
Threat of new entry: There is medium threat of new firm in the finance sector. As there are already big giants companies have capture the wide market share and has able to gain the loyalty of customers. It will be difficult for new organisation to achieve position in the market. But the new enterprise can increase the threat for Lloyds Bank by entering into the market with innovative product or new services. Lloyds Bank has low pricing and new value position strategy which has provided firm an ease in entering into a financial sector. It is required by management team in an organisation to utilised the suitable strategies for creating the barriers for restricting the entry of new companies and safeguarding the competitiveness.
Bargaining power of suppliers: In UK , the bargaining power of suppliers is quite high and this poses a threat to Lloyds Bank and other major financial operators. Most of companies in financial or banking sector purchase raw material from numerous suppliers. Increase in demand by suppliers have direct as well as significant impact on the profit margin of Lloyds Bank. Many powerful suppliers in an industry utilises their negotiating skills for extract higher prices from companies. High bargaining power of suppliers have direct effect on the profitability of Lloyds Bank (Kernbach, Eppler and Bresciani, 2015)
It is required by management team in an enterprise to concentrate on developing the strong supply chain network. Company has professional relationship with digital banks as well as brand network. Multi channel approach has supported business entity in reaching to the wide number of customers and providing them with services in professional manner. Another strategy which can be adopted by business entity is that a firm can enter into contract with dedicated suppliers whose business depends upon an organisation.
Bargaining Power of buyer: The bargaining power of customers is generally high. As buyer wants best services at low or reasonable cost. Customers have high potential to force firm for reducing the price of product or service. This factor has significant impact on the profitability of an organisation. The smaller as well as more powerful the customer base of Lloyds Banking Group Plc the higher the bargaining power of the customers and higher ability of client to demand for discounts or offers.
Threat of substitute: There is little threat of substitute product or services in banking sector. As the competitors in an industry might produce the substitute product with the intention to create pressure on small firm in banking sector. This factor has significant impact on the profitability of industry. The threat of a substitute product or service is high if it offers a value proposition that is uniquely different from present offerings of the industry.
Management team in an organisation is also planning to increase its capabilities to address customers’ evolving needs as the sole UK integrated banking and insurance provider, and achieve growth in a number of targeted segments. It has also supported firm in increasing sales as well as profitability. This strategy has also supported firm in reducing the threat of substitute product (Montgomery,2017)
Rivalry among existing competitors: There is high level as well as intense competition in banking sector. Due to increase in competition as well as continuous changing business environment company is facing difficulty in concentrating on its objectives. This factor has direct as well as major effect on the business performance.
It is required by Lloyds Bank to built sustainable differentiation and provide the additional services to customers. As this strategy will assist business entity in maintaining business performance , position in the market. It will also help business entity in gaining the competitive advantage in an industry (Grant, 2016)
Analysis of the organisation’s strategic position using relevant KPIs
Establishing the key performance indicators is considered to be a significant part of strategic planning procedure. Key performance indicators assist manager in identifying the performance gap. It also allows management team to compare actual performance with standard.
Key performance indicators
Increasing efficiency and improving customer service
Rise in ability to quickly deal with customers requests and deal with them correctly has helped business entity in generating the profit margin that a firm intends to achieve.
Increase in sales
There has been the tremendous increase in sales of Lloyds Bank
To become market leader
Strategy of providing value proposition tio customer and stakeholder has allowed firm to achieving leading position in an industry.
Gaining customer loyalty
Creating the economical value has allowed firm to gain the loyalty of customers and influence them to buy services provided by bank.
Analysis of organisation's strategic direction
Boston consultancy group matrix is considered to be as an effective tool which can be utilised by Lloyds Bank for identifying its position in the market. It also assists business entity in recognising the performance gap and analysing the appropriate methods or techniques for improving the same. BCG matrix consist of four cells which help management team in examining different businesses in its portfolio on the basis of their related market share and industry growth (Wheelen and Hunger, 2017)
Get Help in Any Subject
Our intention is to help numerous students worldwide through effective and accurate work.
Stars : An organisation in this position generates high income because of their strong relative market share. But these business entity also makes huge capital investment on promotional activities with the intention of fostering market growth.
Question mark:This symbol represents that business entity has high growth rate. But also consumes large amount of cash, therefore these companies have low market share. Such organisation can increase their market share by adopting the suitable marketing strategies as well as promotional techniques.
Cash cow : This sign indicates that an organisation has able to gain leadership position in a mature market. Firm at this position generate more cash than they consume. Such companies sh can be achieve maintain its position by extracting the profits and investing as little cash as possible.
Dog: This position indicates that a company have low market share and a low growth rate. It also means that in this position an organisation doest not have potential to generate or consume large amount of cash. These firm are found to be in liquidity position due to burden of large amount of debt.
Lloyds Bank stands at star position in Boston consultancy group matrix. An organisation has high marker growth and wide market share. Business entity has wide scope of growth in banking sector due to rise in disposable income of the people in the society as well as good economic condition of nation. The other reason for growth in banking sector are volatility in other markets and people in society has realised the importance of saving. This factor has supported Lloyds Bank in increasing its sales as well as profitability. But it has been identified by conducting the BCG analysis that Lloyds Bank need to utilise new strategies or technique for increasing its market share and fostering growth (Wilson and Beard, 2014)
Critical evaluation of the organisation's strategy
Sustainability: It is considered to be as the most significant factor in the SAF strategy. The several strategies such as differentiated multi brand, multi channel, customer value proposition , data driven customer experience has allowed the firm to increase its sustainability in the market and achieve good position in an industry. These strategies have also supported business entity in gaining the competitive advantage in the market.
Acceptability : The company has adopted the strategy to provide great value to stakeholders has supported firm in seeking supports of employees in bringing positive change at workplace and also enhancement of customer service. It is acceptable strategy , as this plan is accepted by all the people in an organisation. Returns will be measured based on the benefits that stakeholders expect from the strategy and could be financial as well as non-financial
Feasibility :It involves the analysis or consideration related to availability of resources which are required for formulation as well as execution of strategy. Financial feasibility can be assessed by forecasting as well as analysing cash-flows, performing break-even analysis and a number of other financial tests. As Lloyds Bank has stable financial stability as well as valuable and expensive resources., firm can easily implement several strategies. Business entity also have skilled and talented workforce which will assist the company in implementing the plan in an effective manner (Akter and Childe,2016)
The report has concluded that strategic management is important in terms of achieving success as well as fostering growth. It has been concluded from the report that Lloyds Bank is performing well in the market, but still there are some fields in which firm can make improvement. Study has successfully identified the position of Lloyds Bank in the market. It has been also concluded that strategies adopted by an organisation is effective which has helped firm in accomplishing several business objectives.
It has been recommended to Lloyds Bank that a company is required to make improvement in existing strategies , business plans as well as policies. As this activity will help business entity in maintain good position in the market. The another advice to management team in Lloyds Bank is that they should feasible , suitable and acceptable plans or stratergies.
Johnson G. 2017.Exploring strategy: text and cases. Pearson.Knowledge management as a factor for the formulation and implementation of organization strategy.Journal of Knowledge Management21(2) pp.308-329.
Montgomery D. C. 2017.Design and analysis of experiments. John Wiley & Sons.
Pollanen R. Abdel-Maksoud A. Elbanna, S. and Mahama H. 2017. Relationships between strategic performance measures, strategic decision-making, and organizational performance: empirical evidence from Canadian public organizations.Public Management Review19(5) pp.725-746.
Adoption of digital technology have become an important aspect where various tasks performed by the management have become easier and can be practiced in no time. Its adoption has also been able to reduce overall cost of the company. Not only in marketing, but an important role is...ReadMore
There are many factors which affect business. These factors include internal and external elements. There is requirement of different factors which include business growth. It is essential that company has to make policies which help them to compete with other firms. Hotel industry...ReadMore
Newcastle United Football club is an English professional club which was founded in the year 1982 through merger. Period from 1904 to 1910 was recognized as the most successful period as club won FA cup. It has been assessed that after struggling period in the early’s 2000such...ReadMore