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National Westminster Bank

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Introduction

NatWest Bank Corporate Strategy STE03-3 99077711 A report on NatWest Bank and an analysis of the banking industry. April 2004 Contents 1. INTRODUCTION 3 Company History? 3 What will the report tell us? 3 2. EVALUATION 4 Industry Analysis 4 Company Analysis 5 Likely Consequences 6 Alternative Solutions 6 Findings 6 3. CONCLUSION 7 4. RECCOMENDATIONS 8 5. BIBLIOGRAPHY 9 APPENDICES 10 1. Introduction This report focuses on NatWest and the industry in which it operates. The purpose of the report is to give a concise but accurate view of how NatWest operates as an organisation and the links between its environment, in this case the banking industry. Company History National Westminster Bank came into being in 1968 when National Provincial Bank and Westminster Bank merged and began trading on 1st January 1970. This allowed the bank to expand and venture into new services such as credit cards and computer-linked cash dispensers. The 1980's saw deregulation of the financial markets which eventually culminated in the 'Big Bang' in 1986, National Westminster Bank seized this opportunity and entered the securities business acquiring stockbroking and jobbing firms to create NatWest Investment Bank. The Group's International Banking Division focused on expanding into international banking services and into The USA, the Far East and Europe. ...read more.

Middle

* Environmental: With little to choose between the financial products and services that banks offer, their attitude and policy towards environmental factors may be key in obtaining a greater market share. * Legal: The Competition Commission has been asked by the government's 2000 review to determine whether the banks are acting within the law and also recommends the blocking of any further mergers within the banking sector until any reforms are implemented. The review also states that some existing bank units should be split off to ensure greater competition. Andrew Parkinson of The British Chambers of Commerce said: "We are increasingly concerned that the concentration of banking services in a small number of banks is restricting choice in the small business sector." Company Analysis The results of the PESTEL analysis assists in understanding aspects of the environment in which NatWest operates however it does not identify the possible advantages that may be gained from the environment. Further analysis is required to highlight the potential advantages NatWest may be able to gain over the competing banks. The ideal tool to do this is the Five Forces model proposed by Porter. The model works when it is applied to a specific business or organisation rather than a whole industry as with the PESTEL analysis. ...read more.

Conclusion

NatWest is one of the largest banks and enjoys a huge market share. However new technology is bringing slightly more potential competitors towards the industry and future government intervention may also cause many barriers to entry to be dissolved in order to increase competition. 3. Conclusion All indications from the information gathered in this report suggest that the banking industry is likely to become more competitive in the near future, it is therefore important for NatWest to capitalise on the large market capitalisation it possesses. New Technology is a reason for this and it is therefore important for NatWest to capitalise on this in order to preserve the organisation's position as one of the largest banks in the world. 4. Recommendations The main recommendation from the findings in this report is for NatWest to harness the increasing popularity of the Internet, offering a wide range of financial services to Internet customers should do this. This should not just be the existing account services already available online, but an entirely self-sufficient entity existing as a subsidiary of NatWest Bank Plc. The aim of this is to counter the threat of possible new entrants and to give the organisation a sounder footing should the market become more competitive in the near future. Possible drawbacks with such an online service would be security threats to accounts held by online customers. Also the broader issue of an anti-competitive industry may withhold such an expansion by one of the market leaders. 5. ...read more.

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