BARCLAYS BANK PLZ STRATEGIC PLAN

University Degree Business and Administrative studies

STRATEGIC PLAN A CASE STUDY BARCLAYS BANK PLC

The strategic planning process

Strategic Planning processes in which organizations defining its strategy ,direction ,objectives ,missions and future planning .Its access external and internal situation into formulate strategy as well evaluate all this processes and then communicate it with organization for implementation of this strategy. A diagram showing in appendix 1 for a general view of Strategic Planning processes.

Barclays Bank Management closely works for its Strategy and Planning with the businesses in both Global Retail and Commercial Banking and Investment Banking & Investment Management to develop and implement strategic plans aligned to Barclays overriding Group strategic goals.

Establishing a process

Barclays bank plc (public limited company) is major bank in United Kingdom with its International presence more then 57 countries .Barclays bank is multinational financial services firm having number 10th ranking in financial services firm as well 21st largest company in the world in 2010. (Forbes Magazine ranking 2010).It operating in Africa, Asia, Europe, North America and South America having 48 million customers worldwide. Barclays Bank Plc is international bank and organised two type of financial business Corporate and Corporate Investment Banking Wealth management banking and Global Retail Banking. The Corporate & Investment Banking and Wealth Management cluster comprises three business units: , Barclays Corporate and . The Global Retail Banking cluster comprises four business units: , Barclays Africa, UK Retail Banking and Western Europe Retail Banking. Its primary listing is on the and it is a constituent of the . It has a secondary listing on the . (Barclays group key fact 2010)

Strategy planning structure

The fundamental principal to Barclay’s philosophy is to include the interests of all of their shareholders from customers, employees, shareholders and the wider community in route to providing a valued and prosperous circumference of satisfied stakeholders.

A high priority is placed on dealing with three lines of operations. Firstly, the banking division that provides up front service and customer attention to United Kingdom retail and business banking customers. The UK retail banking side courts some for 14 million accounts, servicing around 566,000 customers, while the business side lends service to primarily middle to larger sized businesses of around 180,000 customers.(Barclays Annual report 2008)

A second major focus for Barclays is Private Clients. Barclay’s stands today as the largest retail stockbroker in the United Kingdom, with clients mainly in the UK and the continental Europe. The gist of the client makeup is high net worth and clients of corporate billing. Third is the International Retail and Commercial Banking sector of Barclay’s business. Barclays has some 800 international branches placed throughout Europe, Africa and the Middle East, which provide a large array of services including current accounts, savings, mortgages and loans. (Barclays Annual report 2008)

Ownership and involvement

Others smaller areas of focus for Barclays are Barclays Capital, Barclaycard, Barclay Global Investors and Woolwich. It is within these areas that Barclay is placing a larger focus towards growing throughout the international markets. Barclays Capital is a global investment bank which provides advice and solutions to the financial and risk management needs of corporate, institutional and government clients. Barclaycard has some 11.2 million UK customers with 2.9 million cards issued internationally. This happens to have been the UK's first credit card and the leader in card services provided over the internet 800,000 customers using the online account services. Barclaycard operates internationally throughout Europe, the United States and Africa and has recently made efforts to expand even more into the United States with the acquisition of the US credit card, Juniper Financial Corporation in December 2004. Barclays Global Investors is a world leader in providing investment management products and services and is also a global leading asset manager. In 1971, Barclays Global Investors created the first index strategy and followed this in 1978 with the first quantitative active strategy. Barclays Global Investors holds some 68 million British pounds in Exchange Traded Funds with over 100 funds in ten international markets for individual and institutional investors. Lastly, Woolwich is a mortgage business that was acquired by Barclays in 2000. It has been transformed into a division that deals largely with home financing and lends its branding to Barclays mortgages.

Creating alternative strategic options

This is a preview of the whole essay

Creating alternative strategic options

Barclays has placed a great deal of interest in international growth beginning as far back as 1925 with the merger that began the formation of Barclays International Operations of three banks: the Colonial Bank, the Anglo Egyptian Bank and the National Bank of South Africa. This pushed Barclays into Africa, the Middle East and the West Indies. By the 1980s Barclays became the first bank to file with the Securities and Exchange Commission in the U.S. and by 1986 was the first British bank to be listed on the Tokyo and New York Stock Exchanges. Barclays Capital formed around the same time establishing an investment banking operation that today manages larger corporations and institutional businesses. In the mid 1990s Barclays formed Barclays Global Investors through the purchase of Wells Fargo Nikko Investment Advisers which was combined with Barclays BZW Investment Management. Barclays has also kept pace with innovation with concepts such as online customized servicing through Barclays Private Bank and Premiere Banking. These steps have kept Barclays competitive in the banking industry and guided them towards a promising path in international growth.

Developing specifics

Foremost to continually compete internationally, Barclays must strive to perform customer service at an utmost level of excellence. This will promote Barclays worldwide as a business that can be relied upon time after time for small individual accounts as well as huge corporate accounts. To accomplish this, Barclays must identify their customer groups and the needs associated with each particular group and develop products and services that will be of great value to their customers. The practices that have worked in the past must be reconfigured to work for years to come and keep Barclays updated with the high changing IT world. This will call for new investments into new levels of technology that can help offer higher levels of service to its customers. Along with the apparent increase in speed that IT will allow Barclays to accomplish routine tasks, technology will also reduce risk of errors and fraud. (www.thebanker.com) this leads straight into a second integral point of interest for Barclays. The need to place major investments into the most modern and efficient IT systems available that enables top of the line business transactions to transpire unhinged. IT will allow up to date information to be at the fingertips of Barclays managers, giving managers a huge advantage when it comes to making decisions and in pin pointing groups of customers that can have a high added value to Barclays. The fine-tuning of IT will also eliminate weaknesses within Barclays practices, preventing failures that effect customers and thus reducing excessive and unnecessary costs.
Clarifying the strategic position

Barclays has been very successful as of late in carrying out its desired tactics. As of February 2005, Barclays had recorded record net profits with a large amount of its success attributed to its investment ability. Net profits, according to Barclays scoured upward some nineteen percent in 2004 hitting 3.27 billion pounds, which translates to 6.08 billion U.S. Dollars and 4.76 billion euros. (www.barclays.com) Along with profits, revenue soared to 13.9 billion pounds, up from 12.4 billion pounds. (www.forbes.com) This strong increase in Barclay's position stalemated, at least for the time, the talks of a take over that have held Barclays under scrutiny for quite some time now. According to Barclays, its increase in its 2004 profits can be tied largely to its ability to reduce the number of bad debts and the growth within Barclays Capital, its investment banking division. Barclay's 2004 increase in profits follows swiftly on the feet of its 2003 increase of some twenty percent in pre-tax profits.

Huge investment strategies that have led to this increase in profits include the acquirements within its Barclaycard card business. The beginning of February 2005 brought two swift and powerful movements by Barclays, the first being a card issuing agreement with Forenings Sparbanken of Sweden, targeting the Nordic and hopefully the Eastern European markets. This move was followed shortly after by its US issuing business Juniper, mentioned above, acquiring a credit cards portfolio including an undisclosed number of credit card accounts from Oregon Community Credit Union. This happened to be Junipers first transaction since Barclays bought them the previous year. Barclays has placed its sights on transforming Barclaycard into an international brand in light of recent pressures domestically that include higher funding costs and a brutal interest rate environment. (www.thebanker.com)

With growth on its mind, Barclays has set out to create an international business that if forecasted correctly, the income generated in its Barclaycard division will be of equal value internationally as well as domestically by 2013. This is a hearty goal for as of the present, Barclays stands at a mere 8 million pounds in pre-tax income that encompasses the entire international business, compare that to the pre-tax income of 793 million pounds in 2004 for its domestic business alone. However, from 2003 Barclay's international pre-tax income rose one hundred percent from 4 million pounds. (Mauritius, 2007)

Constructing the strategic plan

Barclays has also placed strategic action in growing throughout Europe. Barclays announced an investment of 76.5 million pounds that will gain them a fifty percent stake within a joint venture with FSB that will be headed in Stockholm, Sweden. Chief executive of Barclaycard, Gary Hoffman, said the venture will provide a powerful partnership that, "combines FSB's customer and distribution strengths in Scandinavia with Barclaycard's leading-edge risk management and customer acquisition skills." However, despite Barclay's desire to establish Barclaycard as a valued global brand name, the FSB name will probably brand the new venture.

This venture seems to have a great target, as the Nordic region is very low in cards per adult. According to Barclays there are only 0.1 cards per adult in Sweden and 0.4 in Norway; this compares to 1.5 cards per adult in the UK. Demand is rising though in the Nordic region, as according to the Swedish central bank that credit cards account for sixteen percent of the proportion of outstanding consumer credit balances in Sweden, this up some six percent since 2002. (McIntosh, 2008)

In the short-term, the venture hopes to achieve growth throughout the existing 3.6 million FSB customers that currently do not use an FSB credit card, but for long-term goals Barclays has its sights set on growth across the entire Nordic region. FSB has already made a move that can allow Barclays and Barclaycard greater access into the East European market, by making an offer for the remaining forty percent of Estonia's AS Hansapank that it currently does not own; Hansapank holds a very strong position within the Baltic region. If FSB is successful in accumulating the full ownership of Hansapank, the thought is that the move will allow for a maximizing in operating synergies along with a reduction in funding costs.

All of these moves are foreshadowing that Barclays has big plans ahead, however there are many steps that are still needed along the way. Current projects including the purchase of Juniper will keep profits down in 2005 after already creating a 2 million pound loss initially after the deal was done in December 2004. Despite certain setbacks, Barclays was able to keep a stable credit quality, with its delinquency levels as a percentage of outstanding payments also were quoted as being stable. What is evident is that Barclay's focus has become international for the future of its businesses, however card penetration levels have hit fifty percent in the United Kingdom, up from forty five percent a couple of years before, compare this thought to the seventy five percent penetration level in the United States. However, Gary Hoffman remains optimistic, saying that there is no reason why the penetration levels in the United Kingdom could not reach sixty percent in the immediate future. Hoffman warns though about the concern of over-indebtedness in the United Kingdom, "We are watchful but not worried about the levels of debt and our delinquency rate. When we lend to customers that do not have a track record we give a relatively low limit - say 500 pounds - and then with a track record we would increase that over time." (Morbin, Buckley. 2005)

Evaluating and reviewing the plan & reviewing the strategic plan

The organisation focused on for this paper is the Barclays PLC. The firm is “a UK-based financial services group with a significant international presence, particularly in Europe, the US, and Africa, with businesses in retail and commercial banking, and investment banking and investment management, and with clients that span retail customers, high net worth individuals, and businesses from businesses to multinational corporations” (Rayner & Chandra-Rajan, 2008).

Over the last few years, the firm has grown from a largely UK-focused business to a more diverse business geographically with key business acquisitions in the US and Africa. A few months ago, Barclays acquired the US businesses of Lehman Brothers, giving Barclays PLC a US-based investment banking presence that complemented its investment banking business, Barclays Capital (Lambe, 2008). In 2005, Barclays had acquired a significant stake (c.56%) in the ABSA Group, a large retail bank in South Africa, to diversify revenue sources and expand the franchise globally (Mollenkamp & Singer, 2007).

The firm continues to identify opportunities to build its business and deliver strong returns for its shareholders. Its main focus is on delivering high quality products and services to its clients.

SELECTION AND APPLICATION OF APPROPRIATE MODELS

The analysis of the external environment is done with the SWOT analysis and the PEST model. These assessments of the environment for the Barclays Group using these models are presented in the following tables.

SWOT Analysis

The SWOT analysis is applicable in this situation as there have been considerable changes in the financial services sector which has provided firms such as the Barclays Group with large opportunities and threats. The assessment of its strengths and weaknesses provides a complete analysis to determine how capable the Barclays Group is in pursuing the opportunities in the financial services sector while addressing the threats in the sector.

PEST Analysis

The PEST analysis is utilised in this situation and is considered to be relevant given the impact the changes in the financial services has had in different aspects of the sector including those identified in the PEST analysis – political, economic, social, and technological.

Both the SWOT analysis and the PEST analysis indicate that the Barclays Group is facing large challenges in its sector related to the management of its staff.

REFERENCES

Allen, S. J., & Hartman, N. S. (2008), ‘Leadership Development: An Exploration of Sources of Learning’, SAM Advanced Management Journal, 73(1),
Barclays . Retrieved 4 September 2010.

Banking Newslink, ‘Barclays buys Lehman US operations’, 19 September 2008,

Brannen, L. (2008), ‘The Recession Goes Global’, Business Finance, 1 December 2008

Chappell, J. et al (2008), ‘Barclays plc: Capital and write-downs remain concerns’, Goldman Sachs Global investment Research, 13 August 2008

Chow, I. (2008), ‘How Trust Reduces Transaction Costs and Enhances Performance’,

Costello, M. (2008), ‘Investors' fury at Barclays’, The Times, 26 November 2008,

De Terán, N. (2005), ‘Barclays Capital prospers from double act’, Financial News, 18 September 2005,

Forbes. 21 April 2010. .

Fitzgerald, J. (2008), ‘U.S. loses 533,000 jobs, Worst month since '74’, Boston Herald, 6 December 2008,

Grossman, W. (2007), ‘Intraindustry Executive Succession, Competitive Dynamics, and Firm Performance: Through the Knowledge Transfer Lens’, Journal of Managerial Issues, 19(3),

Harris, J. (2008), ‘Bob Diamond, can he survive?’, The Guardian, 16 February 2008,

Hofman, A. (2007), ‘A new breed is stalking the financial markets: it’s called an interim’, Euromoney, 1 December 2007

Keay, J. (2008), ‘A Very British Meltdown’, Global Finance, 22(10),

Lambe, G. (2008), ‘The Banker: Barclays' calculated risk’, The Banker, 1 November 2008,

Lockwood, N. R. (2007), ‘Leveraging Employee Engagement for Competitive Advantage: HR's Strategic Role’, HRMagazine, 52(3),

Mollenkamp, C., & Singer, J. (2007), ‘Barclays Chief May See Payoff From Patience --- Varley Had a Vision As He Waited His Turn’, The Wall Street Journal, 31 March 2007,

Mauritius, (2007),Barclays Mauritius,Strategic report published

Morbin, Buckley. (2005),Risk Management ,online journal

Mollenkamp, C., & Munoz, S. S. (2008), ‘Deadline Looms as Barclays Strives to Draw in Holders’, The Wall Street Journal, 21 November 2008,

McIntosh & McIntosh Consulting Ltd. January 2008 ... by Colin Johnston, Risk Director Barclays Capital .

Pinar, M., & Girard, T. (2008), ‘Investigating the Impact of Organizational Excellence and Leadership on Business Performance’, SAM Advanced Management Journal, 73(1),

Sharp, T. (2008), ‘Bank wins the day on GBP7bn funding plans’, The Herald, 25 November 2008,

Rayner, T., & Chandra-Rajan, R. (2008), ‘Barclays PLC: Self-determination comes at a price’, Citigroup Global Markets Equity Research, 6 November 2008

Rayner, T., Chandra-Rajan, R., & Mackinlay, J. (2008A), ‘Barclays PLC: It’s all about the balance sheet’, Citigroup Global Markets Equity Research, 6 August 2008

Rayner, T., Chandra-Rajan, R., & Mackinlay, J. (2008B), ‘Barclays PLC: More capital’, Citigroup Global Markets Equity Research, 27 June 2008

Thomson, L. M. (2008), ‘Jobs in the line of fire’, The Economic Times, 7 December 2008,

Von Bergen, J. M. (2008), ‘Jobless rate hits 34-year high’, The Philadelphia Inquirer, 6 December 2008,

Walumbwa, F. O., Avolio, B. J., & Zhu, W. (2008), ‘HOW TRANSFORMATIONAL LEADERSHIP WEAVES ITS INFLUENCE ON INDIVIDUAL JOB PERFORMANCE: THE ROLE OF IDENTIFICATION AND EFFICACY BELIEFS’, Personnel Psychology, 61(4),

Younger, J., Smallwood, N., & Ulrich, D. (2007), ‘Developing Your Organization's Brand as a Talent Developer’, Human Resource Planning, 30(2),