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Barclays

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Ashina Nazerudeen

on 7 April 2013

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Transcript of Barclays

Aditi Shiv Shankar - M00381236
Ashina Nazerudeen - M00379740
Nazrene Gill - M00377561
Pooja Bachani - M00 MGT2500 - Business Environment INTRODUCTION Barclays is a major global financial services provider engaged in personal banking, credit cards, corporate & investment banking, and wealth & investment management (Barclays, 2013)

Barclays is a retail and wholesale industry.

Presence in Europe, the Americas, Africa and Asia (Barclays, 2013)

The company employs approximately 1,40,000 employees (Barclays, 2013)

They have 48 million customers ( Barclays,2013)

Revenue: 21.24billion?? Intensity of rivalry

Major competitors -
HSBC Holding plc : 92 million customers
JPMorgan :
The Royal bank of Scotland : 30 million customers RBS, 2011).

Consolidated industry - few, strong competitors serving a large market share + high barriers to entry --> high competition

Demand for banking service is stable (evidence)
People seek other options of investments like insurance, property etc.

Numerous exit barriers -
liablilities (2011) - £1,498,331m (Barclays, 2013)
Redundancy pay upon exit
Irrecoverable sunk costs (OFT, 2010) Threat of New Entrants - Low

Numerous entry barriers
Government regulations- bank license
e.g. FSA application (1 year) (The Telegraph, 2009)
High capital requirement - In UK, MCR is £1m (The Telegraph, 2009)
High sunk costs - obligate irrecoverable money (OFT, 2010)

Develop good brand image
Need to spend on resources to acquire customers
Customers tend to be loyal to existing brands Bargaining power of buyers - low

Buyers - individual customers, firms

Market share
over 48 million customers (Barclays, 2013)
785,000 small business customers and clients (Barclays, 2013)
current account - 19%
personal loans - 12% (Portland Investment Counsel, 2012)

Switching costs are high due to the involvement of hgih transaction cost (Hannan, 2008).

Customers tend to be loyal to service provider (Porinni and Ramello, 2004). Bargaining power of suppliers - high

Shareholder- providing capital -> high
2011- contribution increased from 50,045 to 50,759(Barclays, 2013)

Customers and depositors -> moderate

Central Bank - offering intereest rates and funds -> high

Infrastructure companies -> low

IT firms - online banking -> high
Outsourced its programming and software jobs to Accenture, an IT outsourcing firm (TEchRepublic, 2005).
Company is largely dependaent on trade from Barclays. Threat of substitutes - Moderate

Customers can be willing to switch their service provider.
E.g. open an account with HSBC or JPMorgan

Other substitutes that yield higher returns
propert, gold, insurance, mutual funds etc. (CNNMoney, 2012)
E.g. car company offering 0% fianancing

For saving people also opt for credit unions or Natioanl Savings and investments (Which.co.uk, 2011) Market penetration

2012- "Mega-millionaire” promotion was organized by the Barclays bank of Kenya (Money & Markets E.A, 2012).

2012 - Sponsored The Olympics Games by providing 47,105 cycles / day through its BCH (Barclay's cycle hire) scheme of 2010 (Mbiyu, D., 2010)

In 2008, Barclays announced sponsored the Dubai Tennis Championship(Manibo, M., 2008).

Since 2004, Barclays has been sponsoring the Football premier league, which is currently known as The Barclays Premier League (premier league, 2013) Diversification

A New trend of Islamic banking was initiated by Barclays, in Africa and Middle East:
In 2011, a license endorsement was offered to Barclays in order to expand its contribution to Islamic financial products and services (DIFC, 2011).
In 2005, Barclays Kenya founded its first Islamic product called Barclays La Riba (Barclays, 2011).

Barclays entered the US market by launching an online savings bank (Walls Cheat Sheet, 2011).

2010-Barclays launched Barclays Cycle Hire( BCH) a public bicycle sharing scheme in London, United Kingdom (Mbiyu, D.,2010).

In 2006, Barclay’s established itself in the asset management sector by acquiring a 10% stake in ARCIL (India Times, 2006). Market development

Appealing student credit card offers. (Thetimes100, 2009)
Benefits:
No monthly fee – to keep costs down for students.
mobile banking and a network of local branches – for ease of access to accounts
25% discount on the monthly cost of Orange mobile broadband scheme. (Thetimes100, 2009)

Partnership with Orange UK’s number 1 broadband provider and developed a contactless mobile payment service called “Quick Tap”. Product development

In 2013, Barclays further enhanced the Features of the Platinum Barclay card, along with an introduction to reward strategies(Ajou, N., 2013).

In 2012, Barclays launched an app that can be accessed through Google play and apple’s app store, to make online banking more convenient than usual. (Glover, F., 2012)

In 2007, Barclaycard a segment of Barclays launched ‘One pulse’ credit card which supported the Oyster card technology used in London for travelling using public transportation (Barclays, 2007). Source: 12manage.com

based on Porter (1985) “Barclay’s mission is to be an innovative, customer-focused group that delivers super products and services, ensures excellent careers for their people and contributes positively to the communities in which they live and work” (Barclays, 2013).

Barclays are committed to building a world-class organization. They aspire to be amongst the most valuable and admired financial services companies in the world.??

Barclay's goal is to becoming the 'Go-To' bank (Barclays, 2013). Mission & Vision Timeline 1690 1896 James Barclay become partners of the bank and became Barclay, Bevan, Tritton & Co (Barclays,2013) Barclay, Bevan, Tritton & Co. join 19 other banking businesses to form Barclay & Company Limited (Barclays, 2013) 1736 Barclays was Founded by John Freame and his partner Thomas Gould (Barclays,2013) Industry analysis Large market share by few competitors (Bized, 2003).

Competitors - (Portland Investment Counsel, 2012)

HSBC Holdings plc - 92 million customers worldwide
The Royal Bank of Scotland Group

Hence, Barclays exists in an oligopoly market (Bized, 2013)

Barriers to entry is high (Economics online, n.d.)

rely on non- price competition
Advertisements and loyalty scehmes(Amosweb, 2013). Delivers high value products and services
The company attracts, develop and retain talented, performance - oriented people
Active role in the community Source: Emeraldinsight, 1986
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