PEST and Porter’s Five Forces Analysis of Barclays Bank
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PEST and Porter’s Five Forces Analysis of Barclays Bank
Barclays Bank identified the sustainability as a means of recognizing and managing the economic, social, and environmental issues across the Group, and at the same time, contributing to the wellness of the society. PEST analysis is created to identify the factors that might affect the sustainability of the organization.
The sustainability of Barclays’s agenda has expanded rapidly. It reflects the company’s increasing focus on the wider nature of business and made the stakeholders growing interests in competitive world of business. There is now a great awareness about the global challenges such as climate changes, poverty, scarcity of resources, and demographic shifting. The responses came from the government and from different businesses, as well as the non-profit organization helped the Barclays made it possible for the sustainability.
The approach to the sustainability program is useful and encourages the company to be open and transparent to the issues such as the initiatives in further research and development, dialogue with the government and various organizations, and their priorities. Barclays enable to broaden their focus on corporate responsibility to prove that they play an essential role in establishing an economic advantage in the country where they operate.
The sustainability strategy focuses in their objective to improve the value of the business and their stakeholders. They give importance on the customers and clients such as maintaining the understanding of their needs and promoting the company by measuring satisfaction. It can be only possible by focusing of their global performance by their assurance to develop an innovative solution and enhancing performance. On the other hand, the people working under their organization make a great advantage in the performance of the business. In addition, they attract employees to collect the talent, develop them according to the competent world, and retaining them as much as possible.
The Barclays uses the means of technology for their business especially in the areas of inclusive banking. Their aim to help the people in fight against poverty is possible through their financial system. The technology makes it possible to empower the system and establish a competitive advantage. Pioneering the new ideas, adding the skills and operational excellence are part of the guiding principle of the organization.
Porter’s Five Forces Analysis
Barclays is attempting to expand their business and services and discover the potential and emerging markets. Through the investigation of the competition and entry in these markets, the sustainability of the bank can be identified. The Porter’s analysis is used to measure the ability of the firm in performing in the foreign country.
There is a high entry because of the emerging markets such as India and Africa that are actually highly regulated by the government and the central banks. A lot of control and decisions are operated in the banks of these countries that might regulate the interests on loans and deposits as well as controlling the money supply. The Barclays is not that popular in these countries because people are investing in governmental or public sector banks which is an advantage for Barclays to implement its strategy for the customers to have a quick and efficient service that can attract other potential clients.
Rivalry among the Existing Competitors
In the competition in the emerging markets, there is an indication of high rivalry because of the involvement of the public and microfinance institutions. It is therefore, difficult to compare Barclays because of the high regulations. Again, in the application of the strategies, the firm can acquire the major stakes in the market which gives them an easy entry and create a brand visibility.
Bargaining Power of Suppliers
There is a medium power among the suppliers of the bank who are definitely the people from whom the banks raise funds. The major source of funds of Barclays comes from the customers or depositors that are transformed to be their suppliers. In order to attract the larger funds, the private banks offer high interest rate which is important for the continuous sustainability of the bank. In addition, the Barclays Card is introduced to attract more clients and increase the volume of funds.
Bargaining Power of the Customers
There is a high power among the people in terms of utilizing the products such as their cards, loans and other services. The high power on the customers is gained because of the number of banks operating in the market that offer similar services. However, Barclays is in advantage because of the e-banking and the provided insurance services.
Threat from Substitutes
There are plenty of substitutes available in the market and it is said that there is a high threat coming from this group. Banks are offering the same services are aligned in the same agenda because of the similar services, although different in terms of interests and payments on credit. Therefore, Barclays is eyeing to compete from the unconventional companies which can give them the rate of return. In the emerging country, particularly in India, the customers are recognized to have a high propensity towards switching to other substitutes, especially in the case of private banking.
Barclays already experiencing the air of success and still aiming for more, this is possible through their ongoing view for sustainability. With the help of the traditional strategy, Barclays will set a leadership in standard model for the other firms.
Barclays Interim Management Statement [Online] Available at: http://group.barclays.com/Sustainability/Reporting/Sustainability-Report-2008/Targets-and-performance [Accessed 08 September 2010].
Barclays PLC. Porter’s Analysis [Online] Available at: http://www.scribd.com/doc/5022319/Barclays-analysis-and-profit-center [Accessed 08 September 2010].
Barclays Premier League “A History of The Premier League” [Online] Available at: http://www.premierleague.com/page/History/0,,12306,00.html [Accessed 08 September 2010]
Blount, E., (2005) Breaking Away: Bob Diamond Saw an Opportunity to Remake an Investment Bank around Risk Management, Minus the Usual Equity Trading and M&A Units. His Hunch Proved Right for Barclays, ABA Banking Journal, 97(10).
Charleston, S., (2008) Determinants of Home Atmosphere in English Football: A Committed Supporter Perspective, Journal of Sport Behavior, 31(4)
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