Lloyds TSB Brand - Research Paper Example

Table of Contents Executive Summary 2 Organisational Objective 3 Positioning Strategy 3 Brand Pillars 3 Brand Idea 3 Brand principles 4 Customer Take Out 5 Current Environment and Operations 6 SWOT Analysis 6 Strengths 6 Weaknesses 6 Opportunities 7 Threats 7 PESTLE 7 Political Factors 7 Economic Factors 7 Socio-culture Factors 8 Technological Factors 8 Environmental Factors 8 Legal Factors 9 Stakeholder Analysis 10 Firm’s Current Strategy 11 Vision 11 Corporate Values 11 Business Objectives 12 Major Goals 13 Audit Checklist 13 Strategic Action Programs 15 Key Strategies 15 Recommendations 15 Bibliography 17 Appendix 18 Executive Summary LTSB is a subsidiary of LBG and offers wide range of banking and financial services in the UK and worldwide. The aim of this report is to conduct a market audit of LTSB. First of all the organisation objectives have been evaluated. The positioning strategy, brand principles and brand pillars have been highlighted in this section. In the second section, the internal and external environment analysis has been conducted. It has found through SWOT analysis that LTSB is financially weak and lack strong marketing strategies however, LTSB has major strengths like strong brand image. Moreover, opportunities and threats have been also identified. The environmental analysis shows that recent global financial crisis of UK has put a great pressure on the financial companies like LTSB. Since economy is coming out of recession therefore, various changes are taking place in the UK financial environment and it is expected that such changed will also influence the organisation. The stakeholders’ analysis shows that customers, employees and financial authorities are very important for the organisation because they can influence the company. The current strategy and future of goals have been also evaluated by reviewing the vision, corporate values and business objectives of LTSB. Market penetration appears to be the current strategy of LTSB in the UK market. Finally, the strategic plan actions and key strategies of LTSB to achieve these plans have been discussed and a few recommendations have been made. Organisational Objective Positioning Strategy The positioning strategy of Lloyds TSB brand is as follows: “The market leader delivering expert relationship banking through unrivalled understanding, helping you gets to where you want to in life” Brand Pillars The three brands pillars of Lloyds TSB include Brand Idea The brand idea of Lloyds TSB is: “For the Journey ...” Brand principles The brand principles of Lloyds TSB for a successful strategy deliver are as follows: These brand principles of Lloyds TSB are delivered through products/services, channels, communication and colleagues. Customer Take Out By offering the mentioned brand principles, company aims to develop the following image in the minds of customers: “Lloyds TSB really values me – they understand what matters to me and always help me to manage my money better” (LTSB) Current Environment and Operations SWOT Analysis Strengths Lloyds TSB Bank Plc has been highly rated by rating agencies (LBG, 2009). TSB brand is working under the umbrella of Lloyds Banking Group, which is a huge name in the international and domestic market Lloyds has always adopted a proactive approach, for example, because of the expected changes in FSA liquidity regime, TSB has made good preparations as stated by company in its 2009 financial report. Weaknesses Financial performance of TSB has declined significantly in 2009 and the net reported loss attributable to equity shareholders is £2,797 million (Lloyds TSB, 2009). Lloyds TSB is operating many subsidiaries and its subsidiary Bank of Scotland is facing huge financial problems. To support this subsidiary and to maintain reputational position, TSB has given £3,000 million to its subsidiary in 2009 (Lloyds TSB, 2009). LTSB not implementing any strong marketing strategy and the strategies are not communicated to the employees. Opportunities London Olympics 2012 offers opportunities to LTSB to strengthen its customer base. Divesting non-profitable segments and focusing on market penetration strategy. Threats Because of the visible uncertainty in international financial environment, it is expected that FSA will make capital and liquidity requirements more stringent and if this happens then TSB may have to raise more capital or the company may have to divest its assets. PESTLE Political Factors In the year ended 2009, TSB faced a loss of £2,797 million and according to the company, the principal reason for this loss arose as a result of the fee of £2,500 million which TSB paid to UK Government because company did not enter into Government Asset Protection (GAP) Scheme (Lloyds TSB, 2009). UK government is stable and support organisations to improve current economic situation. Economic Factors Because of the recent financial crisis, the economic situation of UK has been very disappointing last year and it has also influenced TSB. The low interest rates prevailed throughout the year in the UK which reduced the interest income of Lloyds TSB by 32 percent. Moreover, the increasing unemployment rates, rising interest rates and consumer over-indebtedness have also created problems for Lloyd TSB. Socio-culture Factors The economic downturn has also affected the behaviour of retail consumers in the UK and worldwide for example, the affordability of consumers has declined which directly affects the business of Lloyds TSB. Technological Factors LTSB is operating in an information intensive industry and the kind of products and services it is offering can be can be improved by bringing technological innovations. Technology usually influences LTSB operations positively because it improves the efficiency of the processes of the company. LTSB has gained huge benefits from internet banking and company has to remain very active in this area because of the intense competition in banking industry. Mark Fisher has been appointed as a Director of IT of LGB to improve innovation management at LTSB. Environmental Factors LTSB is a socially responsible organisation and as a financial services provider, the bank takes the responsibility of customers’ savings, mortgages and accounts. Banks considers building strong relationships with customers as contributing to sustainability of business (LBG, 2009). The approach of corporate social responsibility at LTSB is being focused on five key areas including customers, environment, employees, community and suppliers (LTSB, 2007. Source: LTSB (2007) Legal Factors Risk of regulatory actions significantly impacts the operations of Lloyd TSB. Various international and UK consultations are providing proposals to change the regulatory requirements. Basel Committee on Banking Supervision has recently presented a proposal on changing the capital and liquidity requirements for banks. Moreover, a new proposal of the capital requirements for insurers has been also issued. In the UK, another proposal has been issued regarding the changes in governance, recover and resolution arrangements and if the proposal is passed then it may have significant implications for the existing and future business conduct. In the UK, uncertainty has increased in the financial sector especially in terms of special requirements and implementation of proposals, which also impact operations of banks. Stakeholder Analysis Appendix I contains the table having information about the shareholders of the organisation. Firm’s Current Strategy Vision “Our vision is to make Lloyds TSB the best financial services company, firstly in the UK, and then in other markets. We will develop our relationship management skills in each of our businesses, so we better understand and meet our customers' needs, and create more value for them than our competitors can. This means providing highly competitive products and superior customer service including our basic bank account.”(LTSB, 2010) Corporate Values Lloyds TSB values its customers and puts its customers first. The organisation is acting with integrity and respect and takes the personal responsibility. Moreover, working as a team is also one of the significant values of LTSB (LTSB, 2007). Source: LTSB Business Objectives The business objectives of LTSB are: To increase customer base and develop deep relationships in core franchises To achieve the capital efficiency by focusing on rigorously applying economic profit discipline at every level To achieve continuous productivity growth by leveraging a broad set of productivity disciplines across the group Source: LTSB (2007) Major Goals The current goals of LTSB: To financially support Bank of Scotland, a subsidiary of Lloyds TSB and to make every effort to avoid the declining image of the bank LTSB has become the first official partner of London 2012 Olympic and Paralympic Games and it was a significant mile stone of the company Acquisition of HBOS Plc (another brand of Lloyds Banking Group) and to avoid financial losses, operational losses, cost synergies and to avail business growth opportunities The future goals of LTSB: To increase the number of branches of LTSB in the UK by increasing customer base Being a first National Partner of London 2012 Olympics, LTSB goals is “To inspire and support young people, communities and businesses all over Britain on their journey to the London 2012 Olympic and Paralympic Games and beyond.” (LTSB, 2007) To make positive revenues in 2010, so that both the stockholders and stakeholders can be satisfied. To accommodate in the new expected FSA liquidity regime without being troublesome and pressurised. Audit Checklist Initial market audit checklist Yes No Do you have a traditional strategy and a marketing orientation in your firm LTSB has defined clear, business, corporate and marketing/positioning strategies - Do you understand your offline consumers and your online consumers LTSB is offering various offline and online products to meet the needs of both kind of consumers - Have you clearly defined your product/service offering and business purpose? The business objectives and goals of LTSB have been clearly defined and the product map shows that both the core and value added product/services offerings have been defined - Do you understand the customer pricing desires for your product service? Are you price minus? LTSB has kept its prices competitive and focusing on price penetration strategy because it aims to offer value pricing to customers - Do you understand the emerging trends of your market place LTSB has always adopted a proactive approach in terms of the trends in the UK market place e.g. it is the first National partner of London Olympics 2012 - What channel does your business currently use and do you think a web presence would work for you? LTSB is a brick and click company and most of its business is brought by online business - Have you measured the success of your current promotion? Do you know which promotion strategy your customer responds to? LTSB offers its brand principles through its products/services, channels, communications and colleagues. Company keeps on evaluating the responses of its customers. E.g. very recently company has conducted a survey to show what consumers perceive about LTSB. - Strategic Action Programs Since the company is undergoing the integration process with HBOS Plc, therefore, till 2012, company aims to complete this strategic program. Company aims to initiate the plans based on which it may enhance its image and promote its products and services in the minds of customers. Because of the declining profits of LTSB, the company has planned that success of the bank will be only possible through the success of the people therefore, more focus will be given towards communicating the aims and objectives of the company, conducting trainings according to the business needs, enhancing awareness of personal responsibility for development purpose and analysing the results of trainings and development programs (LTSB). Because of the expected change in FSA liquidity, LTSB may also initiate the program to raise more capital or to divest its assets, as mentioned in the recent annual report. Key Strategies To complete the integration process completely, all systems of HBOS Plc will be integrated with LTSB. Highly experienced professionals have been hired for this purpose, such as Mark Fisher has been hired as the Director of IT because Fisher has also participated in the integration of ABN Amro. To increase its image in the UK market, LTSB plans to participate actively in London Olympics 2012. Company is the first National partner of Olympics 2012 London; therefore, various programs will be launched to sponsor the event and supporting the government to attract tourism. To ensure the success of people, LTSB is already pursuing the strategy by offering better training preparations, establishing more learning centres (company has increased the learning centres from 38 to 74), encouraging and supporting staff to attain professional qualification and by organising formal trainings plans. Recommendations Company should divest the assets or the subsidiaries which are not profitable and requires continuous financial support. It is very important for LTSB to improve its financial position. Marketing strategies should be improved because customers’ perceptions are not really strong about the company. Moreover, company should give more focus on attracting and retaining customers (Appendix II & III). The strategies should be also communities to the employees because employees have direct dealing with the customers. Bibliography LTSB, n.d. Lloyds TSB Group Plc. [Online] Available at: http://www.bankseta.org.za/downloads/cs_lloydstsb_group.doc [Accessed 22 September 2010]. LBG, 2009. Corporate Responsibility Report 2009. [Online] Available at: http://www.lloydsbankinggroup-cr.com/ [Accessed 19 September 2010]. LBG, 2009. Credit Ratings. [Online] (Updated Nov 2009) Available at: http://www.lloydsbankinggroup.com/investors/credit_ratings.asp [Accessed 19 September 2010]. Lloyds TSB, 2009. Financial Report. [Online] Available at: http://www.lloydsbankinggroup.com/media/pdfs/investors/2009/2009_LTSB_R&A.pdf [Accessed 19 September 2010]. LTSB, 2007. Corporate Responsibility Review. [Online] Available at: http://www.lloydstsb.com/media/lloydstsb2004/pdfs/corporate_review_2007.pdf [Accessed 22 September 2010]. LTSB, 2007. Corporate Responsibility Report. [Online] Available at: http://www.lloydstsb.com/media/lloydstsb2004/pdfs/corporate_report_2007.pdf [Accessed 22 September 2010]. LTSB, 2010. MarketPlace. [Online] Available at: http://www.lloydstsb.com/about_ltsb/marketplace.asp [Accessed 22 September 2010]. Appendix Appendix I: Stakeholders Analysis Customers LTSB puts its customers in the first place and dealing customers with honesty and integrity is of great importance for LTSB. Employees Employees can always influence the stakeholders therefore, they are also important for the company. Various current strategies have been also implemented to increase the welfare of employees. Government and Financial Authorities LTSB has been authorised and regulated by FSA or Financial Services Authority. Therefore, financial authorities are important for company because they can influence the organisation decisions. Communities Various communities are also the stakeholders of LTSB and company actually considers them very important and provides sponsorships and charitable giving. However, LTSB do not make donations to any political party. Shareholders LTSB is a publically limited corporation and shareholders can also influence the company significantly therefore, shareholders are very important to the organisation. Suppliers Company also gives significant importance to its suppliers and company aims to make payments to them on time and according to agreed terms of trade. Competitors Competitors can also influence the organisation because LTSB is operating in a highly competitive industry. However, LTSB aims to compete with its competitors honestly and vigorously. Moreover, LTSB has never gained unfair advantage over its competitors. Appendix II: Perceptions of Consumers Source: LTSB Appendix III: LTSB Customers Source: LTSB Read More