I believe this is their smartest objective as it can improve the running of the company and although there are many risks, Barclays is financially stable and needs to take chances in order to succeed in being a well run company.
Comparative Aims and Objectives
All businesses have main objectives in order to achieve in his business:
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Survival- This is any businesses primary objective. Through earning enough money from customers a business will meet all its objectives in order to stay in business. Every businesses first aim is to survive as 4 out of 5 businesses go bankrupt within the first few months of starting out. Businesses may often aim for the wrong things such as profit and growth straight away however they MUST aim to survive in order to to build a high-quality business. To ‘survive’ is a long term aim however within the first year other aims can be created.
Survival- Barclays needs to continue aiming to survive as although they already have a well run business they still need to ensure their service isn’t compromised at any time. Barclays will not have to work as hard as this aim as they would have when they first launched ‘Barclays Bank’ however it is still essential to keep the business running smoothly.
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Meeting Stakeholder Needs- All businesses need to consider the needs of those affected by the business in order to succeed in creating a high market share. This aim also ensures that your business runs smoothly for example if your suppliers aren’t happy, your stock may not be delivered on time, which will then have a knock on effect to your customers, who wont be able to buy the products they need. A business needs to cater to the needs of their shareholders as they are what keep a business running; selling products to customers, local area ensuring the business has a good opinion, suppliers supplying high quality products creating a well known brand.
Meeting Stakeholders Needs- In order to keep their stakeholders happy they need to meet their needs. Barclays needs to make sure things run smoothly such as ensuring their staff are helpful, they keep their branches well run and that the quality of service is not compromised. The better they provide for their stakeholders the better the business looks and therefore will increase their popularity for both existing and potential stakeholders.
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Maximising Sales Revenue (income)- This is when a business seeks to make as much income as it can from its customers. This is usually a secondary objective when the business knows it has well known products or services that it can aim to maximise their income with. This aim may be used throughout busy seasons of the year such as summer holidays and Christmas holidays when consumers are most likely to buy. Businesses that aim for this objective early on in a business normally face huge problems as their products are not known well enough and not to the highest standards that they may be in a year of development.
Maximising Sales Revenue (Income)- If Barclays want to expand further they need to ensure they are financially stable. Through maximising sales revenue they do not have to negotiate their services but may need to enhance their advertising and sales pitch. This may then lead to a larger market share and more customers investing their money in Barclays.
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Maximising Profit (surplus) - when a business aims to make the gap between income and expenditure as large as possible. This may mean that the business keeps its expenditures as low as possible while still keeping customers happy however this is hard to achieve for a new business as their product is not known well enough for their target market to buy. Businesses aiming for this objective need to have good business knowledge, such as what their target market want and how best to sell their product to appeal to them, in order to minimise their expenditures and maximise their income.
Maximising Profit (Surplus)- Through minimising their expenditures it may mean compromising their good service, which could lead to trouble for Barclays. However, if Barclays aimed to widen the gap between expenditures and income it may result in a better business. I don’t think this should be a primary objective for Barclays however with the business it has it may improve their organisation.
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Growth- Businesses aim to increase the size of their organisation annually in order to increase their market share and reputation. This aim should not be used until the business is already well known and has a large target market, which would therefore allow them to expand. This may mean building their business for a few years before expansion a it will be more efficient in the long run. New businesses should not aim for this objective as they need to build on an already well run organisation and work their way up. Through growth it can mean a large increase in profit margin, a well known brand and expansion internationally. However there are large costs which will affect you initially which is why you need to be financially stable when wanting to expand further.
Growth- As Barclays has already expanded internationally it could be beneficial for them to branch wider as already it has improved their profit margins and brand name. Growth can have complications however as Barclays is already well run and financially stable there is less risk for them.
As Barclays is a profit business the objectives may effect their organisation differently compared to a non-profit business such as Oxfam.
Oxfam is a charity shop which helps raise money for people less well off in other countries. They would use the following aims:
These would be the main objectives as Oxfam need to survive in order to spread the word and raise money for poverty. As most of their items sold are given to them free it means that their main aim is to keep the business running smoothly. Also they need to aim for Growth as the more they sell and the more well known they are, the better they can prevent poverty and help others.
The other aims Meeting Stakeholder Needs, Maximising Sales Revenue and Maximising Profit would not be as essential but will feature at some stages throughout the duration of Oxfam.
Economic Conditions
Good economic conditions can be measured through a number of things. These consist of:
The rate of unemployment can either be high or low. At present the unemployment rate for England is 5.5% which is low compared to other countries such as Greece with 10.5%, Spain with 10.3% and Poland with 18.2%.
If the rate of unemployment is low this will mean in general lots of people have jobs and therefore are more likely to have money to spend on products and services.
This can also mean high consumer confidence and people are more willing to spend their money instead of saving and not using certain services such as taking out a loan.
However, if in contrast to this the rate of unemployment is high then not many people are going to have jobs and therefore have less income. This will cause low consumer confidence and people will be less willing to spend their money on Barclay’s services such as loans and savings. This is because they would not be able to pay back the money with the added interest.
- House Prices in Specific Regions
In London we can see that house prices are substantially higher than that of countries in less populated areas. For example the average house price for a house in London is £297132 whereas in a less populated area such as Portsmouth it is only £166913.
If house prices are high this must mean that the general income of employees is also high as they have more money to spend on homes.
If house prices were low this would imply that wages are also low as people wouldn’t have the resources to pay for an expensive house. In some cases consumer confidence may be low and more people less willing to buy new houses. However, if people needed to buy houses it would be more likely they would need to take out a mortgage. This would be beneficial for Barclays as they provide a wide range of mortgages available to all.
If pay is high this must mean the economy is good as people have more money to spend on products and services. People will want to spend the money they earn on new products and services and will also be more confident to take out loans and borrow money as they know in the long run they will be able to pay it back.
If pay is low people decide to save the money they have and are less likely to spend it. For Barclays this means that they would have more people using their savings accounts.
If the gross domestic product is high this means that resources are good and the demand for products and services are high as people are willing to spend their money. This may mean that people are less likely to be using Barclay’s savings account, however there is more of a chance of customers borrowing money for the products they want to buy.
If the economy is good people are more likely to have high consumer confidence and therefore more willing to spend and less willing to use such services as taking out a loan with Barclays.
If the economy is bad people are more likely to have low consumer confidence and therefore less willing to spend and more willing to use such services as savings accounts at Barclays.
Barclays needs to maintain good economic conditions in order to succeed in making good profit. If economic conditions are good, consumer confidence will increase and therefore people will be more willing to spend money and use Barclay’s services such as savings accounts, loans and mortgages. Barclay’s need people to spend money in order for their business to succeed and so if certain factors of the economy are bad, such as high unemployment and low wages, people would prefer to save their money instead of using Barclay’s services.
At the moment the economic conditions for England are very good.
The following is a graph of Gross Domestic Product over the past five years:
We can see that over the past five years the economy has both experienced a boom and a recession. The economy has had a down turn in both 2001 and 2005 however these have been followed by peaks throughout. We can see that the economy was at it’s up most best in 2004 however fell rapidly at the beginning of 2005. In contrast the economy is once again growing in 2006.
At present we have got good economic conditions which will benefit Barclays greatly as consumers will be more likely to spend money and use their services.
From this we can see that the UK is doing substantially well compared to other countries. With unemployment low the economic conditions remain good and benefit Barclays immensely as there is a better cash flow throughout the country.
Competition
An Oligopoly is when a number of businesses specialise in the same market. Barclays in an Oligopoly as there are many banks competing to provide the same services such as savings accounts, retail management and loans.
In order for Barclays to achieve the best they can to accomplish their second objective they need to advertise as best they can. This may mean spending a lot of their profit on adverts which could benefit them in the long run if they were to best advertise their bank. Also, if they are perceived to have a well run bank with a highly known brand name this may mean higher consumer confidence when using their services.
As there are also other banks such as HSBC, Lloyds TSB, Natwest and Abbey National who are Oligopoly’s as well as Barclays, they need to ensure that they make customers aware of special offers and their brilliant products.
From many adverts we can see how all these main banks compare themselves with the others in order to show they are the best when it comes to certain products. Not only are these advertised widely on TV but also just walking down a local high street you would be able to see the ever rising competition between banks.
With the ever rising use of internet banking there is yet more competition for Barclays to contend with. Not only are the usual high street banks now providing internet services but also other financial providers such as Egg and smile.co.uk. Internet banking provides people with the option to look at their accounts online and apply for certain services. This is ideal for busy people who do not have the time to visit a bank.
Although Barclays has the advantage of already being a well known brand, some people will be willing to take the chance and venture to other online banking services. Online Banking service ‘Egg’ is competition for Barclays as they provide competitive rates and services.
Barclays need to make sure that their product is the best compares to all the other banks if they are to become ‘the best.’
Legal, Ethnic and Social Issues
Legal Issues
Legislation is a set of rules set mainly by the Government but can also be influenced by International bodies. They set out consumer rights and ensure that customers are being treated correctly through providing protection when buying products and services.
However there is a fine difference between legislation and self regulation. Legislations are set by Governing bodies and if these are broken then it can lead to prosecution, however on the other hand self regulation is the rules that the business themselves set out.
One of Barclays Self-regulations is to strengthen, social and environmental supplier-screening policies. This is not something that Barclay’s Bank has to comply with however they have produced this legislation themselves to improve their business.
Without legislation people would not have guidelines to what they can and can not do. For example, it is illegal to go up and shoot someone on the street and legislation stops this from happening. As with all laws there are loop holes, like ‘Double Jeopardy’, however without legislation there would be no order to businesses and all organisations world wide.
Barclays need to comply with legislations otherwise they could be prosecuted and fined. For Barclays there needs to be legislations to ensure that customer’s money is safe and Barclays are providing the right service and not, for example, going to use your money without permission.
Credit Card Legislation
One of the main businesses within Barclays is ‘Barclaycard.’ For this Barclay’s need to ensure they comply with the legislation law for credit cards. This legislation states:
‘ If you use your credit card to buy something costing more than £100 but less than £30,000, and something goes wrong, the people who gave you your credit card are liable as well as the seller.’
This would mean that if there were any complications with ‘Barclaycard’ they would be accountable for the problem as well as the seller of the product or provider of the service.
Data Protection Act
Also with all the information that Barclays Bank holds, such as account numbers, customers details (name, age, address) and how much money in their accounts it also needs to comply with the Data Protection Act.
The Data Protection Act means that when a business collects your personal information they are not allowed to share and use that information without your consent.
When processing information all businesses must do so in accordance with the eight Data Protection Principles. These state that information must be:
- Processed for limited purposes
- Accurate
- Fairly and Lawfully processed
- Adequate, Relevant and non excessive
- Processed in line with your rights
- Not transferred to countries without adequate protection
- Secure
- Not kept for longer than is necessary
Without this legislation Barclays would be able to pass on secure information about their customers which could lead to big problems such as fraud, hassling and theft. However as Barclays do comply with this they provide a secure service for their customers.
Trade Description Act
The Trade description act 1968 prevents manufacturers, retailers or service providers from misleading consumers as to what they are spending their money on. This would mean, for example, if they were selling a mortgage they would have to give the consumer the APR. that was advertised.
Social and Ethical Issues
Social Issues consist of mainly the issues involving the local area whereas ethical issues are more focused on the environment and how they can make the world better. Barclays are largely involved in helping both social and ethical issues.
From Barclays Bank I can see how recently they have helped build a wheelchair rugby team for the ‘National Star College’ to represent them at a local and national level. Not only does this establish ‘Barclays’ brand further but also betters their reputation.
From 2006 Barclays have been mainly focusing on the following three areas:
- Helping to generate local communities through sport
- Helping people manage their finances
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Helping people into employment
Barclays have been providing sponsorships and donations in order to help their customers and local areas with their lifestyles.
One of Barclay’s main priorities within the community is to improve the inclusion of people with disabilities. Some of the things they have achieved are:
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RNID – Together IT Works – Barclays have donated £1.69 million over the course of 3 years to this programme which helps deaf and hard of hearing people to gain the IT skills needed to compete in the labour market.
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RNIB – Talk & Support – Barclays is providing £1.29 million over 3 years to offer telephone support and counselling to newly registered blind and partially sighted people, offering advice and friendship through these difficult times.
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National Autistic Society Help-line – Barclays have committed £300,000 over 3 years to provide support and information to families affected by autism.
Also, Barclays proudly sponsor ‘Gemini FM and Herald Express Community Awards’ which are set up to distinguish outstanding involvement to the local community in Torbay and South Devon.
Not only does this establish ‘Barclays’ brand further but also betters their reputation. Through showing they are interested in social issues makes customers believe that they are not just wanting business but also caring about their local area and others.
Barclays Products
In this section I am going to evaluate two products that Barclays provide and see how they relate to Barclays main objectives.
Travel Insurance
Travel insurance ensures that you are covered when you go abroad. With Barclay’s package you receive:
- 24 hour Travel Assistant Helpline
- Up to £30,000 Personal Accident Cover
- Up to £2 million Personal Public Liability
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Up to £10 million medical expenses
Also at Barclays you have the choice of ‘Single Trip Cover’ or ‘Annual Multi Trip Cover.’ This means that you can choose the period of time you are insured for whether it’s a short weekend away or a multiple travelling adventure. Travel Insurance is essential for your breaks away as if there are any serious accidents all costs up to £10 million can be insured.
At the moment I would say that travel insurance is in the growth stage of the Product Life Cycle as most people will at least travel once a year and in most cases more. Unless you are a real risk taker most people will get travel insurance as they’re not willing to take the risk of high costs if something goes wrong. As this is a product that all people will need for now and future travel insurance is very likely to have a long cycle. This can however depend on competition travel insurance such as ‘the post office’ as Barclay’s need to ensure they keep their prices competitive. If not they may be seeing decline sooner than anticipated.
In terms of the Boston Matrix, travel insurance would be classed as a star as it has both high market growth and high market share.
Travel Insurance is always going to have a large market share as it is always needed. The only way to prevent the travel insurance business to grow would be the prevention of holidays. As this is very unlikely insurance is continually growing. Therefore Barclays need to ensure they are providing the ‘best’ travel insurance if they want to reach their target of becoming the ‘best’ bank in the UK.
In terms of developing retail and commercial banking activities in selected countries outside the UK, if more people were to use Barclay’s travel insurance it would begin to widen it’s brand name throughout international countries. Barclays need to ensure that they are advertising there travel insurance not only in the UK but also other international countries such as Spain, Africa and Germany.
Barclaycard Student Card
Barclaycard offers a student card to all those over the age of 18 years, entering full time education, have a permanent UK address and don’t already have a Barclaycard. With this also you can get 20% off at Argos and discounts and prize draws.
This new student card allows students to borrow money as they would with a regular credit card with 14.9% APR.
As Barclaycard is fairly new to Barclays I would say that it is the early stages of growth, concerning the product life cycle. This means that there is still plenty of time for it to grow within the market and fulfil its full potential. At this stage advertising needs to be used effectively in order to best promote the student card and get it better known.
In terms of the Boston Matrix I would say that the Barclaycard Student Card is a ‘cash cow’ as it has high market share but low market growth.
In the long run this product may largely grow but in order for this to happen Barclays need to ensure that they promote this product as best they can so that it is recognised by all students. It may be beneficial for Barclays to promote in and around colleges and universities as this is where their main target market are.
At the moment this would be considered as a niche market as it is not widely available from all banks and has only been introduced at Barclays. However, if this product does grow and therefore change in to a ‘star’, competition may also catch on to this idea.
Below you can see how Barclay’s products relate to the Boston Matrix.
Credit cards including student cards are at present a problem child, meaning that they have a high market growth and a low market share. This may suggest that competitor’s products are better or Barclays marketing is not as effective as it should be. To over ride this problem Barclays need to analyse why their market share is low and develop strategies to overcome this problem.
Working in Teams
Team building refers to the process of establishing and developing a greater sense of collaboration and trust between team members.
Within Barclays they do many team building activities in order to keep their teams strong and working well together. They ensure that they do team building activities outside of work hours such as weekends away that consist of team activities. This enables people who may not work together in the same teams at work to get to know each other outside of working hours.
Barclay’s often go to the ‘active training’ courses as they provide team building, leadership skills and generally fun events.
Their team building events helps people to realise what it’s really like to be in a high performance team and how to use these skills on both the course but more important back at work. Activities that they provide include:
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The crystal challenge – Similar to the Crystal Maze Game Show teams set out to complete a number of challenges using both physical and mental skills.
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Team Wok – Teams set out to complete a complex Chinese meal during a half day course.
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Treasure Hunts – A variety of treasure hunts available for teams willing to work together to find the prize.
Their leadership skills teach both current and aspirant managers to learn more about their own leadership skills and how they can develop these. The main three conceptions they need to understand are:
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Practise – leading a team through a variety of activities ensuring that you use vital leadership skills such as confidence, understanding and initiative.
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Discussion – Be able to discuss openly within groups about yours and others views and lead discussions within large groups.
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Feedback – Be able to talk within groups about your views as a team leader but also to be able to get feedback from your team.
They learn how to use their strengths to their advantage so that they can return to work with a clear view how to get the best out of their team.
The fun aspect of the course is the main ingredient for the workers to enjoy the weekend but also learn new ways to ‘move forward’ in their teams.
Through Barclays engaging in certain activities such as team building weekends it strengthens the team in which the workers operate in but also ensures that the business is better running for the customers. When people work together its more likely for more work to get done and therefore customer satisfaction to increase.
Belbin’s Theory
Belbin’s theory was that all organisations need 9 key roles for the business to work well as a team. These roles are:
- Implementer
- Shaper
- Complementer/Finisher
- Plant monitor/ Evaluator
- Specialist
- Co-ordinator
- Team Worker
- Resource Investigator
Every business needs these roles as they each bring a different talent to the team. Teams tend to work better when each person is assigned a role as they each know what they’re doing and how they can contribute to the team. Also through using Belbin’s roles it forms a balance within the group and prevents disagreements and disorganisation.
Belbin also quoted:
“What is needed is not well balanced individuals, but individuals who balance well with each other.”
Dr.Merideth Belbin
This shows that you can have any member within your team as long as each and everyone are willing to work together and take on a specific role. It is therefore true that ‘Nobody’s perfect - but a team can be,’ as not one person can take on all of Belbin’s roles but when there are more people each role can be covered and therefore the perfect team is created. With the combination of these roles there is more likely for team success.
If within Barclays all employees have clear roles and distinct working patterns then it enables Barclays to work at a higher standard as they are more organised and can therefore work more efficiently.
From merely entering a Barclay’s branch I could see how the areas were mainly split into teams and specialists. The main specialists that I could recognise were mainly advisor. These consist of financial advisors, mortgage advisors and advisors there to help you get the best from Barclays bank. On the other hand I could clearly see the team work between the desk staff.
One of Barclays own workers spoke confidently about the team work within Barclays:
“Teams are organised to be very lean, which gives individuals the opportunity to take on more responsibility. The constant teamwork with colleagues on the sales and trading sides, coupled with the ability to help our clients hedge their exposures, makes for an extremely rewarding day.”
Ansia Picou
This just shows how Barclay’s team work works well and is effective as ensures that employees are also enjoying their work as they don’t have to work along but within a tight knit team.
This worker also stated that:
“I am constantly surprised by how seamless we integrate our businesses across offices and regions. We constantly phone and communicate with our colleagues and back office in London and Singapore for trade support, overnight market updates, and for quotes and information on markets that we may not cover.”
From this we can see that there is constant communication across branches in order for the business to work well. As there are teams within each branch it provides support for each other. From this statement we can also see how it relates to Barclays objective of ‘developing retail and commercial banking activities in selected countries outside the Uk.’ They do not only worry about there separate sections but communicate across there branches in other countries.
Conclusion
As mentioned in the beginning of this report Barclay’s three main objectives are:
- Build the Best Bank in the UK
- To accelerate growth of global product business and develop retail and commercial banking activities
- Enhance operational excellence
Build the Best Bank in the UK
AS we can see Barclays have a very well known brand name and have built themselves as a premium bank, however does this class them as the ‘best’? This objective is very vague and does not specifically state how Barclays can ‘Build the Best Bank in the UK.’ As yet Barclays have done many things to bring them closer to this objective such as, products which offer value and beat competition, built an ethically minded business and encourages enterprise skills within their employees allowing them to maximise value for their customers. Another large benefit for Barclays is how well their internet banking has taken off. When I visited Barclays I was told that a large number of their transactions daily were mainly carries out via their online banking website. This means it’s quicker for their customers and allows everyone to check their accounts at any time.
Although there are many ways in which Barclays are building towards this target there are also ways in which they can improve. Things such as uncompetitive pricing and rates, having a ‘premium’ brand and being undercut by different businesses such as ‘Egg’ could jeopardise the chances of Barclays reaching this target. As this objective could be for many aspects of Barclays, I think it is essential that they re-evaluate this aim and make it more manageable to a specific area. This would make it more of a SMART target.
To Accelerate Growth in Global Product Business and Develop Retail and Commercial Banking Activities
AS we can see Barclays has already expanded into many countries such as Italy, France and Spain. However, as Barclays is widely known for its ‘premium banking’ this may affect their chances of developing their business activities in selected countries outside of the UK. This is because poorer countries such as Argentina, Croatia and Mongolia may be less likely to afford this specific brand of banking. Also high failure rates have proven that it’s highly risky thing to do for an already well run business.
On the other hand Barclays are very well known for their team work. When visiting Barclays I was told how each area of work is managed by a group of selected workers enabling a wide range of skills across each team. With these skilled teams they could work together to develop new global products which would appeal to international countries and therefore create less risk for expansion. Barclays already are a well known bank across the world and therefore should have the enterprise skills to take risk in new areas. With their highly skilled staff and knowledge of competition Barclays already seem to be working well towards this target.
Enhance Operational Excellence
From entering a Barclays Bank you would automatically see how they work within teams to ensure the best for their customers. As researched we know how Barclay’s employees and managers both go on training weekends which allows them to interact within groups they wouldn’t usually work with but also to learn new skills in a fun environment. This has built a strong team structure for Barclays which has shown in both their work and to their customers.
However, as present they do not seem to be offering the best value for money and being undercut by other branches such as Abbey National and HSBC. A representative from Barclays has stated that their branch in Wimbledon were inefficient and struggling to meet objectives. This could cause a big down fall for Barclays as if they are not seen as a well run business they may no longer attract potential customers and lose existing customers to competition. A way to avoid this may be to reduce the number of products that are available as with the vast amount they offer at present they may begin to lose focus and start neglecting their customer needs. Although Barclays do appear to have strong team work within their businesses they need to ensure they are strong enough to reach this target. At the moment I believe Barclays should be concentrating on how to make their products better as this will enhance operational excellence.
Overall we can see how Barclays are well on the way to high success of they keep working hard to achieve their targets and build the ‘best’ bank for customers worldwide. However from this we can also see how Barclays need to make sure that they are offering the best rates in order to beat competition.
