Strategic Management, Organisational Strategic Analysis on Barclays PLC - Essay Example

? This paper examines the ways that a multinational company could use identify the strategies to follow at its business, corporate and international levels. The case study here is Barclays PLC, with an emphasis on its Business Banking unit. The paper commences with an analysis of the company’s external and internal environments and uses these findings to identify the possible strategy options that the organisation could take to remain competitive. The paper then uses the Suitability, Acceptability and Feasibility criteria to analyse the strategic options available to Barclays Business banking at the business strategy level and Barclays PLC at the international strategy level. Two strategies are recommended, differentiation for the business unit level and market penetration for the international level. Table of Contents Abstract 1 Table of Contents 2 1.0.Introduction 3 2.0.Analysis of the Internal and External environment 4 2.1.External Environment 4 2.1.1.PESTEL analysis 4 2.1.2.Five forces analysis 8 2.2.External &Internal Environment 11 2.2.1.Strengths 11 2.2.2.Weaknesses 11 3.0.Development of strategic choices 13 3.1.Business strategy 13 3.2.Corporate strategy 15 3.3.International strategy 15 4.0.Evaluation of strategic choices 16 4.1.Suitability 16 4.1.1.Barclays Business Banking 16 4.1.2.Barclays PLC international strategy 18 4.2.Acceptability 18 4.2.1.Barclays Business banking strategy 18 4.2.2.Barclays PLC international strategy 19 4.3.Feasibility 19 5.0.Recommendation of preferred strategic choice and conclusion 20 Appendix A: Increased Stakeholder involvement 24 Appendix B: Generic Strategies and Industry Forces 25 Appendix C: CAGE framework analysis of BRICS in comparison to UK (Barclays PLC home) 26 1.0. Introduction Barclays PLC is a major global financial service provider that is engaged in retail banking, credit cards, corporate and investment banking, and wealth management with an extensive international presence – Europe, Africa, Asia and the Americas (Barclays, 2011). The company has its roots in the UK, which has remained as its major market in terms of income, personnel – about 60,000 – and other resources. As a big financial services provider the company is structured as follows. First it is divided into the three major categories: (1) retail and business banking; (2) corporate and investment banking, and wealth management; and (3) group centre. The retail and business banking is further subdivided into four business segments: UK Retail and Business banking, Europe Retail and Business banking, Africa Retail and Business Banking and Barclaycard. Corporate and investment banking is subdivided into: Barclays Capital, Barclays Corporate and Barclays Wealth. Global centre comprises of all the other operations at the company’s head office (Barclays, 2012a). In 2010, the group had made a total income of ?31,440 million and had nearly 147,500 employees globally. This research paper shall focus on the company’s UK Business Banking segment. According to Antony Jenkins, the Chef Executive of Global Retail Banking, the company’s strategic goals are “Happy customers, strong profit growth, good returns (Barclays, 2011, p.18)”. However, this may prove to be quite a challenge considering the effects of financial crisis of 2008 and the current recession in most of Western Europe (the UK included) which are major markets for the company. One key change that the bank will have to contend with is increased stakeholder involvement and expectations as depicted in Appendix A. 2.0. Analysis of the Internal and External environment PESTEL analysis enables a company to analyse its macro-environment. From the macro-environment the company’s strategist can then figure out which factors are more likely to change and which amongst these will have the greatest impact on their organisation (Gillespie, 2007). Five forces analysis helps a company to understand the structure of its industry and stake out a position that is less vulnerable to attack and more profitable (Porter, 2008). SWOT analysis assists the company’s management to identify their business’s specific weaknesses and strengths which shall then be compared with the opportunities and threats identified by PESTLE and five forces analysis (Gillespie, 2007). 2.1. External Environment 2.1.1. PESTEL analysis Table 1: PESTLE table Issue Impact on business Political -Government has set-up several funds to spur/support SME sector in the UK -Increased political and media attention on the banks’ lending delivery -These funds offer substitute threats to Barclays Business Banking loan offers -Bank has to improve on its lending delivery Economic “Double recession” currently being experienced in Europe -SMEs afraid to take loans because of low business -SMEs lack security guarantees for loans -Loan repayment periods and rates need adjustment to reflect current reality Social / Culture -Low consumer spending -Increased lack of jobs / job insecurity -SMEs cannot service loans quickly / regularly thus Barclays may have to do more to support them -Barclays has to increase support to start-ups to increase number of jobs (indirectly supports the banks retail business) Technological -Increased competition through technological innovations in Retail consumer banking -New information and communication channels / Social media -Customised Treatment -Rival banks gaining market share in SME banking due to market positioning of their retail sector -Opportunity to create new e-models for SMEs -Enhance bank to SME client intimacy Legislation -Changes to bank liquidity laws -Increased regulatory framework -Reduction in bank’s lending capacity -Reduces “innovative” approaches to banking / lowers speed to meet market demands Environmental -Increased consumer preference to environmentally responsible businesses -Banks have to meet consumer expectations and as such increase affiliation/transactions with environmentally responsible businesses (Leaseurope, 2012; Barclays, 2011; Checkonomics, 2011; Ecorys, 2011; ICM, 2009) I. Political Political factors affect government policies, and specific government policies affect either one or more than one of the five competitive forces that influence an industry’s profitability (Porter, 2008). Given the importance of the provider SME (Small Medium Enterprise) sector to the UK economy, the government has set up several schemes to ease the access of capital to this sector. Some of the UK government initiatives include: Enterprise Finance Guarantee, Regional Venture Capital Funds, Enterprise Capital Funds, Early Growth Funds, UK Innovation Investment Fund, Grants for Business Investment and so on. These are direct substitutes to what Barclays Business banking offers and as such have increased the threat of substitutes. II. Economic Europe, UK inclusive, has experienced a “double recession” which has strained the resources of SMEs which typically heavily rely on external sources of funding to pay their suppliers before they make their sales. According to the 2010 annual report on EU SMEs, fewer firms applied for bank loans for fear of rejection (Ecorys, 2011). This implies in the current state of the economy lenders such as Barclays Business banking need to devise ways to reassure their SME client not to harbour such fears. It is important for Barclays Business banking to reconsider their policies such as lending rate, security guarantees, and lending criteria and so on to reflect the reality of the economy as it is today. One could argue that many SMEs need external funding to remain in business, and Barclays Business banking needs many SMEs to remain “alive” to sell its services to. III. Social According to Johnson and Scholes (2006) the socio-cultural factors of a particular region affect how an organisation integrates into its environment. Moreover, these factors greatly influence the success of particular products within a particular region. Barclays Business banking in UK like any other business operates within a given socio-cultural context. Given that the changing lifestyles in the UK is due to the prolonged slow economy, the bank should seize the opportunity to support SMEs so that they, for example, increase job opportunities which would increase the market for the bank to sell its other products. In fact, Barclays has responded in 2009 by starting a program named “Turning the Corner” to assist UK businesses through the recession (ICM, 2009). IV. Technological Johnson and Scholes (2006) researched that technological advancement has changed the way things operate in every industry including banking. However, the large share of technological innovations in banking has been geared towards satisfying the retail customers rather than business customers. Nevertheless, Barclays Business banking could adopt some of the innovations advanced by its sister business units to meet the needs of its SME clientele. According to Antony Jenkins, the Chief Executive, Global Retail Banking, Barclays pioneered the contactless payment strategy in the UK and 90% of the contactless cards issued in the UK are issued by Barclays (Barclays, 2011). One way the company could leverage its leadership in this technology could be through market positioning, that is to convey its technological superiority in comparison to competitors given that it controls 88% of the contactless card market share (Trefis, 2011). V. Environmental With increased consumer awareness of environmental issues there has emerged new market segments comprised of passionate environment-sustainability customers. SMEs cannot ignore this new market segments and therefore have to associate themselves with equally environmentally responsible businesses. This implies that for Barclays Business banking to get business from such SMEs they will also have to be an environmentally responsible business. Since this affects the entire Barclays PLC, it is has to be incorporated in the Group’s strategy. On 30th July, 2010 Barclays launched the Barclays Cycle Hire in London, an initiative that makes more than 5,000 bicycles available in central London to offer an environmentally friendly mode of transport. Barclays Business banking could also use this for market positioning within its target market. VI. Legal With the financial sector being squarely blamed for the global recession, it expected that the banking sector will face embedded regulation and more hands on regulators. Fortunately, the effect of this would be felt in the entire industry and not just by the Barclays Business banking unit. Moreover, it may act in favour of the current players by heightening the barriers to entry. 2.1.2. Five forces analysis In this section we shall look at the three major competitive forces that have the greatest impact on Barclays Business banking: industry rivalry, threat of entry and threat of substitutes. Table 2: Five Forces Analysis Industry Force Impact on business Industry rivalry - High -Market dominated by four major players -High exit barriers -Barclays is one of the big four thus benefits from huge market share -Due to high exit barriers industry players would rather fight for market share than wind up Threat of Entry - Medium -High returns pre-2008 attracted non-traditional players such as retailers, online banks - New regulations, due to the double recession, are creating barriers to entry -New entrants had specialised on specific customer segments. Their specificity enabled them gain market share for the big four -New entrant benefited from the big four’s low customer focus -Barriers to entry due to new regulations favours old players such as Barclays Threat of substitutes - High -Two thirds of SMEs in Europe use alternative sources of funding specifically trade credits and leasing as well as hire-purchase and factoring. -Barclays has entered into joint ventures and alliances with some of the new market entrants to offer additional delivery channel targeting SMEs -Barclays private public partnership with the UK government to support the Enterprise Finance Guarantee (EFG) scheme that targets SMEs (Porter, 1998; Ecorys, 2011; Leaseurope, 2012; Checkonomics, 2011; Barclays, 2011) I. Industry rivalry The UK’s banking sector is one of the most impressive but also one of the most competitive sectors in the European market. The market is dominated by four major players, namely: Royal Bank of Scotland, Barclays PLC, Lloyds Banking Group and HSBC. The exit barriers for these big players are very high and as such even though the industry growth is slow these financial services firms would rather fight for market share than wind up, which makes the industry rivalry intense (Porter, 2008). SMEs are the backbone of the European economy and they depend critically on external sources of finance to balance their finances in between paying suppliers and receiving money from consumers. A majority of SMEs in the Euro zone having received the majority of their external funding through bank overdrafts and credit lines (Ecorys, 2011). This implies that these major UK players will all aggressively seek to satisfy this market and thus Barclays Business banking faces stiff competition. II. Threat of entry Though entry barriers to the financial services industry may have been typically high, partly due to government regulations and partly due to the need for high financial resources, industry dynamics have been rapidly changing. The attractive industry returns prior to the financial crisis of 2008 gave investors’ confidence to support non-traditional players such as huge retailers to enter the industry with financial services arms, internet banks and other financial service providers who decided to expand into banking (Checkonomics, 2011). These new small entrants such as Metro Bank, Bank of China (UK) Ltd and Butterfield Bank (UK) Limited also exploited a major weakness of the traditional banks like Barclays, which was their low customer focus. These new entrants have naturally led to an increase in substitutes. III. Threat of substitutes According to Ecorys (2011) annual report on EU SMEs from 2009 to 2010, two thirds of SMEs received funding through alternative sources of funding specifically trade credits and leasing as well as hire-purchase and factoring. Leasing is particularly an attractive substitute to Barclays Business banking loans because SMEs could finance up to the full purchase price of an asset, without having to offer any supplementary guarantees. Furthermore, the leasing companies could provide additional funding to SMEs given that they retain ownership of the leased asset (Leaseurope, 2012). Barclays, like the other major banks, have identified this real threat of substitutes and have entered into joint ventures and alliances with some of these new market entrants to act as additional delivery channels (Checkonomics, 2011). Also, Barclays Business banking has entered into a form of private public partnership with the UK government to support the Enterprise Finance Guarantee (EFG) scheme. Under this scheme, the UK government acts a loan guarantor for viable SMEs that have insufficient or lack the security with which to secure commercial loans from Barclays bank. 2.2. External &Internal Environment From the above outlook on the macro environment and industry analysis we can identify the following strengths and weaknesses of the UK Barclays Business banking unit. 2.2.1. Strengths I. Barclays PLC is a strong brand especially in the UK, where it has existed for more than a century. It was named Business Bank of the Year 2011 at the UK’s National Association of Commercial Finance Brokers (NACFB) Industry Awards. II. Barclays is working together with the UK government in supporting the Enterprise Finance Guarantee (EFG) scheme. In 2010 the Barclays Business supported 106,000 business start-ups. III. Barclays PLC has entire teams set up to assist SMEs such as the Barclays Business Support team that oversaw the successful restoration to financial health of 80% of the SME business customers with whom the bank agreed turnaround strategies (Barclays, 2011). IV. Bank has the depth in financial capital to survive in the highly competitive industry and to support successful lending to SMEs. In 2010 the bank spent ?43 billion on gross new lending to UK households and businesses (Barclays, 2011). V. Strong distribution channel in the UK epitomised by its large presence through physical branches. 2.2.2. Weaknesses I. Barclays Business has not developed a sufficient response to address the threat posed by SME leasing which has overtaken bank loans as the preferred source of funding for SMEs (Leaseurope, 2012). II. The diversity of SMEs – in size, sectors, characteristics or in terms of support required – coupled with their vast numbers makes it difficult for Barclays Business banking to develop solutions customised to each SME. Other smaller lenders can benefit from their specialisation on SME sectors. Table 3: Strategic capabilities Resources Competencies Over 800 branches re-launched in the UK under UK Retail and Business Banking refurbishment initiative Has different lounges for different customer segments such as its premier customers Physical Offers state-of-the-art banking facilities, pioneer in contactless payment cards in the UK and 90% of the contactless cards issued in the UK are issued by Barclays Barclays Group liquidity pool ?154billion Core Tier 1 capital ratio of 10.8% Financial Ability to raise ?6.5billion, without UK government help, from private investors at the height of the global financial crisis Shows ability to assure suppliers of financial capital Barclays employs nearly 147,500 people of whom 60,000 are in the UK. Human -Runs a Strong Future Leaders Programme, Mentor programme and an online Learning management system. -Also has a strong diversity and inclusion policy that enriches its talent pool Strong brand image Did not receive government bailout funds Intangibles Associated with similarly successful and strong brands e.g. sponsors the 2011/2012 Barclays Premier League, 2012 Barclays ATP World Tour (Barclays, 2012c; Peston, 2008; Barclays, 2011) Table 4: Threshold and distinctive capabilities Resources Competencies Threshold capabilities -Over 15 million customers in the UK alone -Has several products and services e.g. Barclaycards, Premier, Retail & Corporate banking, Barclays Capital, Barclays Wealth -Well distributed network in the UK & Ireland (the core market) and also internationally. -No bailout money boosted investor and stakeholder confidence. -Paid dividends to stakeholders over past three years in spite of Europe’s slow economy -Customer management -Product and offer development -Risk management and pricing -Distribution management -Investor relations and stakeholder management. Distinctive capabilities -Strong Operations & IT function - Numerous talent development programs such as the Strong Future Leaders Programme, Mentor programme, online continuous Learning management system. - Barclays Group liquidity pool ?154billion and Core Tier 1 capital ratio of 10.8% -Technology innovation and leadership e.g. contactless cards, Barclays Pingit -Capital management and portfolio strategy -Talent management -Asset and liability management (Barclays, 2012c; Trefis, 2011; Barclays, 2011, 2012b) Of the four major banks in the UK, only Barclays and HSBC did not receive taxpayer funds as bailout money. This gives investors, shareholders and customers confidence to put their money in the bank. The bank has also continued to come up with innovative services such as contactless cards and Pingit, Europe’s first person-to-person service for sending and receiving money using mobile phone numbers (Barclays, 2012b). Finally, the bank has a strong brand image which is espoused by its long-term association with the best and most watched soccer league in the world. 3.0. Development of strategic choices 3.1. Business strategy To help us identify two generic strategies that Barclays Business banking in the UK uses we use the three keys competitive forces identified in our external environment analysis and match them to the generic strategies advanced by Porter. A summary is shown in Appendix B. Approaches to differentiation can take different forms (Porter, 1998) and Barclays Business banking uses brand image, customer service and its extensive branch network in the UK. Barclays Business leverages the Group’s broad range of products such as Barclaycard, contactless debit cards, business insurance and retail banking services to provide its customers with bundled offers which may at a later stage act as switching costs that ensure that increase its customer retention capabilities. Also, the bank has an extensive distribution channel in form of its branch network which gives SMEs confidence that they shall be able to find a physical Barclays customer service point at any part of the country and as such they can expand their business to different parts of the country without worry. This is especially important for business customers who unlike retail customers require physical interaction to build trust and stronger relationships. In support of this, Porter (1998) argued that differentiation insulates the firm from competitive rivalry because it creates brand loyalty by customers. This customer loyalty forces the competition to overcome the uniqueness of the offer and thus acts as a barrier to entry. The same uniqueness of the offer also sustains the firm’s value proposition against that of substitute products and/or services. As shown in Appendix B, Barclays Business banking also uses the narrow focus differentiation strategy to increase their value proposition to meet specific customer needs. For example under the Business banking loans there are two different products for those business loans under ?25,000 and those business loans over ?25,000; there is business overdrafts to help business meet unexpected expenditures and there is cash flow finance for releasing cash tied up in invoices. Focus strategy is built around serving the narrow target market more effectively and efficiently than competitors. This essentially means that the organisation would need to be a learning organisation that continuously uses its resources to improve so as to stay ahead of the competition (Hamel & Prahalad, 1996). An example of this is the Barclays Business Support Team whose task is to work with SMEs in difficulty to develop turnaround strategies to restore them to financial health. It is difficult to picture businesses that have been assisted by the Barclays Business Support Team moving to a rival even if offered similar services at a lower price. 3.2. Corporate strategy Whereas Barclays PLC has largely experienced growth organically, the increased competition in the financial services industry characterised by consolidation on one hand and the entry of new players on the other hand has made it necessary for Barclays to also adopt mergers and acquisition as its growth strategy. Using Ansoff’s matrix, Barclays PLC’s growth strategy is that of market penetration. With the bank’s major markets in the UK and the rest of Western Europe being in recession, Barclays PLC best bet towards market penetration is through horizontal mergers and acquisitions. For example in early 2010, Barclays PLC acquired Standard Life Bank. This acquisition enabled Barclays PLC support its market penetration growth strategy in three key ways: (1) it reduced competition; (2) it enabled the bank to access a wider customer base and increase its market share especially in the “savings and mortgage books” category (BBC, 2009); (3) it enables Barclays to increase its international presence in Germany and especially Canada where Standard Life Bank had significant operations (BBC, 2009). 3.3. International strategy With the current economic downturn being experienced in Barclays PLC’s core European and UK markets, the importance of the strategy that the company shall adopt with regards to the international market cannot be gainsaid. The potential of the emerging markets, especially Brazil, Russia, India, China and South Africa (BRICS) is clear from the returns posted by other industries. Appendix C uses CAGE framework to evaluate the best market for Barclays PLC among these five countries. The parameters used are adapted from Ghemawat (2011) CAGE comparator model. From Appendix C, we see that India and China are more closely matched to the UK in terms of cultural distance and administrative and political distance. The fact that they are both members of the Commonwealth implies that it would be easier for Barclays PLC to break into these markets than the China, Russia or Brazil. However, given the huge difference between the UK and either South Africa or India’s GDP per capita and growth rates, as well as in their Human Development Indices, it is more effective for Barclays PLC to view these markets as being different. This means that Barclays will be better implementing a multi-domestic strategy as its international strategy in these two markets. A multi-domestic strategy allows Barclays PLC tailor its products and services to these varied local markets. 4.0. Evaluation of strategic choices In this section we shall use the Suitability, Acceptability and Feasibility criteria to analyse the strategic options available to Barclays Business banking at the business strategy level and Barclays PLC at the international strategy level. 4.1. Suitability 4.1.1. Barclays Business Banking Tables 2 below summarises the suitability of either of the two generic strategies identified in Section 3.1 with regards to four criteria. First it looks at the suitability of either strategy to allowing the business unit meet the company’s strategic goal of “happy customers, strong profits and good returns”. Secondly, we evaluate the strength of each strategy with regards to facing the threat of substitutes. According Ecorys (2011) the popular substitute to bank loans among European SMEs is leasing. Finally, we look at the suitability of either strategy with regards to tackling Business Banking’s strengths and weakness identified in Sections 2.2.1 and 2.2.2 respectively. Table 5: Barclays Business Banking Suitability evaluation 4.1.2. Barclays PLC international strategy Table 3 below looks at the suitability of each of the four international strategies in an international environment context and relates them to Barclay’s bank capability. The points outlined are arrived at with the presumption that the target countries are India and South Africa that were identified in Section 3.3 to be closely matched to the UK in terms of cultural distance and administrative and political distance. Table 6: Barclays PLC international strategy suitability analysis for India and South Africa 4.2. Acceptability 4.2.1. Barclays Business banking strategy There are three major stakeholders to Barclays Business Banking: shareholders, the government and SMEs. Shareholders would want the strategy that gives them maximum returns for the longest time possible. Differentiation has a greater potential to give more returns now because it captures a wider market segment than focus. Given that shareholders tend to be more concerned with their returns now rather than in future, differentiation will be more acceptable to them. On the other hand, government and SMEs would prefer a strategy that would offer the most support to SMEs at the lowest rates and with the least requirements possible in order to spur the country’s economic growth to create jobs and improve live hoods and encourage consumer spending. Focus strategy would offer better support to SMEs but its impact will be limited to a narrow market segment. It is this limit in terms of number of businesses reached that would make differentiation more acceptable to these two stakeholders than focus. 4.2.2. Barclays PLC international strategy The two major stakeholders in the banks international strategy are the governments, shareholders and other suppliers of financial capital and industry regulators. The foreign government would support strategies that result in job creation, skills transfer and investment in the local economy. Product development and diversification would appeal to this group of stakeholders. Shareholder on the other hand will be interested in the strategies that result in maximum returns at the lowest risk possible. Market penetration would be the preference here. Finally, the industry regulators will probably have a bigger say here given that the events of the financial crisis of 2008 are still not forgotten. Industry regulators would not encourage the banks to take high risk where it can be avoided. This means that they would probably side with the shareholders and suppliers of financial capital in recommending the least risky but profitable strategy, which is market penetration. 4.3. Feasibility Barclays Business banking can leverage on the firm’s rich history and learning experience over decades in existence, to develop either of the two generic strategies: differentiation and focus. In its international strategy the current economic squeeze implies that the only feasible strategy would be the one that requires minimum capital and least risk. Moreover, the effects of the financial crises have made several smaller players seek survival through consolidation which is a market penetration strategy. 5.0. Recommendation of preferred strategic choice and conclusion From the evaluation of strategic choices in the section above, it is evident that within the current market environment the preferable strategic choice for Barclays Business Banking would be the differentiation strategy. It could be argued that within the current environment, the lower consumer spending increases the risk of issuing business loans primarily because of increased odds of loan default. Given the wide impact of the recession across the industries, pursuing a narrow market segment approach may limit the SME business unit’s profitability and growth while also increasing its risk exposure. These arguments work against pursuing a focus – differentiation approach. On the converse, a differentiation strategy allows the bank to reach a wider market and weaken substitutes such as SME leasing. Most of all, the wider reach provided by a differentiation strategy over focus strategy, would enable the bank to have a better lending delivery which is vital with the current increased political and media attention on the banks’ lending delivery. In the international market, the preferable strategic choice would be market penetration largely due to its low risk. With its key European market (UK inclusive) sluggish, it would be difficult for the bank to convince its shareholders, other providers of capital and industry regulators to accept any strategy that portends high risk. All stakeholders would prefer the strategy that offers the most returns for the least risk, which in this case is the market penetration strategy. Also, the UK government, the EU and the population in this region would prefer that the bank concentrates on its improving its home region and thus the bank would find it best to avoid market development outside the region. References Barclays (2012a). Barclays business structure. [Online]. 14 February 2012. Barclays.com. Available from: http://group.barclays.com/About-us/Barclays-business-structure. [Accessed: 14 February 2012]. Barclays (2012b). Barclays launches first service for sending money by mobile phone number. [Online]. 16 February 2012. Barclays.com. 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Available from: https://www.cia.gov/library/publications/the-world-factbook/geos/br.html. [Accessed: 15 February 2012]. Ecorys (2011). Are EU SMEs recovering? Rotterdam: Ecorys. Ghemawat, P. (2011). CAGE ComparatorTM – Analyze Distances and Differences between Countries. [Online]. 2011. Ghemawat.com. Available from: http://cage.ghemawat.com/default.aspx. [Accessed: 15 February 2012]. Gillespie, A. (2007). Foundation of Economics. Oxford: Oxford University Press. Hamel, G. & Prahalad, C.K. (1996). Competing for the future. Boston, MA: Harvard Business School Press. ICM (2009). Barclays offers help to recession-hit businesses. [Online]. 4 March 2009. ICM.ac.uk. Available from: http://news.icm.ac.uk/business/barclays-offers-help-to-recession-hit-businesses/886/. [Accessed: 14 February 2012]. Johnson, G. & Scholes, K. (2006). Exploring corporate strategy. 6th Ed. Harlow: FT Prentice Hall. Leaseurope (2012). SME Leasing. [Online]. 2012. Leaseurope.org. Available from: http://www.leaseurope.org/index.php?page=smeleasing. [Accessed: 14 February 2012]. Peston, R. (2008). UK banks receive ?37bn bail-out. [Online]. 13 October 2008. BBC. Available from: http://news.bbc.co.uk/2/hi/business/7666570.stm. [Accessed: 29 February 2012]. Porter, M.E. (1998). Competitive strategy: Techniques for analyzing industries and competitors. 2nd Ed. New York: Free Press. Porter, M.E. (2008). The Five competitive forces that shape strategy. Harvard Business Review Online. R0801E. p.pp. 1–18. Trefis (2011). Barclays’ Contactless Cards Bring New Growth Opportunities. [Online]. 30 March 2011. Trefis.com. Available from: http://www.trefis.com/stock/bcs/articles/46619/contactless-cards-bring-in-new-opportunities-for-barclays/2011-03-30. [Accessed: 14 February 2012]. UNDP (2011). Indices & Data | Human Development Reports (HDR). [Online]. 2011. United Nations Development Programme (UNDP). Available from: http://hdr.undp.org/en/statistics/. [Accessed: 15 February 2012].  Appendix A: Increased Stakeholder involvement Stakeholder Drivers Expectation Government Financial crisis Strict adherence to increased regulation Current Western Europe (UK included) recession To support small business so as to improve overall economy, increase job opportunities and so on. Small & Medium Business (SMEs) Low sales and profits Less stringent conditions for accessing normal commercial loan facilities Depressed Western European markets Leverage their global expertise to advise SMEs on operating in emerging markets Appendix B: Generic Strategies and Industry Forces Industry Competitive Force Generic Strategies Differentiation Focus (differentiation) Industry rivalry Barclays Business banking relies on brand / image strength and loyalty to fight rivals Rivals unable to match Barclays Business differentiation-focused client needs Threat of entry Barclays Business banking relies on customer loyalty as to deter new entrants Barclays Business banking develops core competencies to enable it deter new entrants Threat of substitutes Differentiating attributes increase customer switching costs Use core competencies to develop specialised products and services Appendix C: CAGE framework analysis of BRICS in comparison to UK (Barclays PLC home) Cultural Distance Administrative and political distance Geographic distance Economic / Wealth distance Brazil Language barrier Mostly Christian Insignificant diaspora1 CPI2 = 3.7 Legal origin: French Time Zone3: -2 hours HDI4: high GDP per capita5: $11,600 GDP real growth rate: 2.8% Russia Language barrier Mostly Christian Insignificant diaspora CPI = 2.1 Legal origin: Socialist Time Zone (Moscow): +4 hours HDI: high GDP per capita: $16,700 GDP real growth rate: 4.3% India English speakers available Mostly Hindu Significant diaspora Commonwealth CPI = 3.3 Legal origin: English Time Zone: +6 hours HDI: Medium GDP per capita: $3,700 GDP real growth rate: 7.8% China Language barrier Mostly Buddhism Insignificant diaspora CPI = 3.5 Legal origin: German Time Zone (Beijing): +8 hours HDI: Medium GDP per capita: $8,400 GDP real growth rate: 9.5% South Africa English speakers available Mostly Christian Significant diaspora Commonwealth CPI = 4.5 Legal origin: English Time Zone: +2 hours HDI: Medium GDP per capita: $11,000 GDP real growth rate: 3.4% Read More