SOAS - University of London Essay Example for Free

SOAS University of capital of the United Kingdom Essay1. IntroductionBarclays PLC is one of the celebrated multinational bank attribute companies, which has had a comprehensive international commercial jolt in the worldwide. The first Barclays Bank was established on Lombard Street, London in 1862 (Barclays PLC Annual key out 2009), the mathematical group total income attained 32.292 million pounds in 2011. This report mainly analyses the environment and strategies of Barclays plc.Vision, Mission and observeVision Barclays wants to set up an integrated universal banking model, experience diversification by business, geography, client and funding, as well as maintain an unremitting focus on customers and clients. Mission Barclays Bank aims to assistance people touch their ambitions with right methods (Barclays.com). Value As Antony Jenkins, Chief Executive of Barclays aggroup (Barclays.com) represented, their corporate goal is to become a Go-To bank for all stakeholders b y stage setting up their own mode of thinking, working and acting in order to guarantee that consumers and clients demands be the central of operations.2. Formal organizationBarclays PLC partitioned into four major areas.Barclays Capital (BC) has the highest region of total income in the last decade compared to the other branches. BC is the investment banking department, offering clients a full scope of solutions to cater to their strategic advisory, financing and jeopardy management needs. In September 2008, the financial crisis resulted in the collapse of Lehman Brothers Holding Inc(LBHI), which BC then purchased and incorporated into the investment department, which lead in turn to a substantial increase in BCs business and impact. Barclays Corporate provides integrated banking solutions to large corporate and financial organization internationally. Barclays Wealth focuses on backstage and intermediary clients worldwide, providing international and private banking, fiduciary swear outs and brokerage. Investment Management was sold on 1st December 2009. However it used to manage the chemical groups economic interest in Blackrock, Inc and the residual elements relating to Barclays Global Investors.Organizational structuresBarclays implements the functional structure and product and geographical structure. Leadership is partitioned into three main sections jury of Directors, Executive Committee and Chief Executive. The Boards primary duty is to advance the long-term success by creating and delivering sustainable shareholder value. In setting and supervising the performance of strategy, the Board schedules ensure that the system is efficiently and highly administrable. Furthermore, the right try management and regulatory oversight process of the Board are the center of organization, which delivers growth in a controlled and sustainable way. The Board of Directors includes Group professorship, Chief Executive and non-executive Directors (Barclays Annu al Report 2011 p13), their duty is to advise and constructively gainsay management and supervise the success of the company.The Board representatives have obligations to the day-to-day management of the Group to the Chief Executive (Barclays Annual report 2011), who is turn in responsible for ensuring that the company is operating efficiently while conforming to the strategy and risk to the requirements. Barclays hierarchy clearly delegates responsibility for the management for all tasks. Utilizing functional organization advance specialized management and work efficiency, each department performance its functions. Furthermore, district directors are responsible for the operation of the division and may be accountable for its positivity (Hannagan T. 2008 p279), in overseas markets. The latter structure provides adequate control of wide-ranging areas of business and applies to employees with different qualifications, experiences and backgrounds. This structure avoidsover-centrali zation to a certain extent, allowing it to fit into different markets, due(p) to the fact that the Group must rely on individuals to take actions to ameliorate operations rather than handing down directives.3. The Environment analysisPESTEL analysisPESTEL framework helps managers to categorise external impacts into six main areas and understand the key drivers of change to adjust the strategy. (Johnson,G. Scholes, K. 2009)Political The Financial times (Norris. F 2012) indicated that Barclays had been involved in a semipolitical storm owing to suspicion surrounding is manipulation of the London Interbank offered rate (LIBOR). LIBOR is one of the benchmark rates that form the operational bedrock of futures contracts, bulk goodness trading, individual consumption loans and Secured Line of credit. The action of Barclays may affect the policies of Central Banks, for instance Swiss National Bank, Bank of England and European Central Bank (ECB). The away pressure might threaten the reputation of Barclays, which may encounter extensive lawsuit from the worlds largest banking groups as a result (Treanor J. 30.10.2013).Economic securities industry conditions in 2011 were particularly difficult as investors nervousness over global economic growth prospects grew and concerns about the fiscal deficit of certain Euro-zone countries became acute. (Marcus Agius Group Chairman 2011) Since the economic resurgence impacted the share prices of banks by the Euro-zone debt crisis, Euro-group leaders committing to a system of enforceable fiscal rules for the repayment of their debt. Moreover, the action of the ECB to provide liquidity realise to banks has helped boost confidence and the European downturn has shown a moderate upward trend. Social Bob Diamond (Barclays Annual Report 2011) mentioned that banks need to become smash citizens, not unless because out of a sense of pure philanthropy, but also in order to deliver real commercial benefits in a way that creates act ual value for society. Moreover, Barclays became the title sponsor of Barclays Premier League and Barclays Singapore Open Golf since 2004 and 2011 respectively.Technological Barclays has strengthened the programming of IT system for effective, accurate and humanized services. Barclays chief Antony Jenkins has used several presentations to the public to announce his companys great use of IT techniques that might prevent a colossal splay that would abolish 1,700 operating posts. (Treanor 2013) Environment Barclays assists re saucilyable energy firms in accessing finance from the capital markets and offers advisory services across the sector. In Ireland (Barclays Annual Report 2010 p27), Barclays has supported the erecting of onshore wind farms and has played a strategic financing role in vital energy infrastructure project. Legal UK promulgated Banking Act at 2009, strengthened the protection of depositors, formulated the bankruptcy institution, improved the Financial Services Compen sation Scheme and remedied the institutional deficiency.To sum up, consort to the PESTEL, the external impacts such as economic resurgence, social status, legal protection and world investment system are conductive to the further development, since the position and role of Barclays are relatively stable.4. The strategic fit between the organization and environment Capital strategy and risk management are the core components of Barclays PLC, which aims to achieve the maximization of shareholders value. Barclays provides a feasible service by offering sufficient financial support to cover the Groups real and forecasted business requirements and correlative risks (Barclays Annual Report 2011 p41). The finance department guarantees that the Group and its legal subsidiaries possess sufficient capital and analyzes the possible hazards that may arise under the stressed conditions. Furthermore, the post-supervision department supports Barclays service rating, Group growth, environment cha nges and market.Risk management is highlighted by the Barclays PLC as one of its most important strategies. Its task is to Identify and profile the significant risks of managements new policies, ensure the operability of infrastructure to sustain the business growth, thereby pledging the financial lights remain feasibly deliverable under a range of business situations. Optimize risk return decisions by taking them as closely as possible to the business, while establishingstrong and independent review and challenge structure.(Barclays PLC Annual report 2010) Help executives and advisers improve and explain the further development and market positioning of the Group. (Murphy. D.2007)Porter 5 forcesPorters diamond focuses on the internal impacts of market by analyzing the take aim of threats, suggests the inherent reasons why some nations are more competitive than others.Bargaining Power of Suppliers The main suppliers to Barclays are equipment and technology services corporations. H owever, the bargaining power of these suppliers only represents a medium level of risk. The strategies are covered under building take over, strong and stable relationships with suppliers. Bargaining Power of Customers Customers focus on the future benefits, appropriate human resource of the specific services and probable risks hence they need some comparison with other banks that also provide the similar banking products. The power represents a medium level of risk. Threat of new entrants Banking industry is an active business, and as such new entrance into the field could strongly influence the performance of Barclays on different levels, resulting in policy changes. Therefore, new entrants represent an area of high risk.Barclays strategies for mitigating this risk emphasize four points guaranteeing the stability of each branch, enhancing capital usage efficiency, ensuring service quality, and pledging long-time running. Threat of Substitutes Banking products have homologous func tions with diverse emphasis. Consequently, this threat is low for the banking industry. Competitive Rivalry between Existing Players This item includes regulatory risk and new products development. regulatory risk arises from an inability to comply completely with the laws, regulations or criterion applicable especially to the financial services industry, such as general changes in regulatory policy, competition and pricing conditions, non-performing loan ratio and local consumers or depositor compensation. This bargaining power is at a high level.To summarize, Barclays should focus on the new entrants and existing competition by improve service and products quality, increase diversityindex, in order to promote market expansion.5. RecommendationsTo preserve their position as the market leader, according to the analysis, Barclays needs to monitor the impact of regulatory changes. That might restrict the companys project activities, results in the growing accounting cost and may impac t the overall income of the Group as well as its social impact. In addition, introducing a non- risk leverage assessment system based on the value chain and risk management, available for evaluate the feasibility of the strategies and capital budgeting. Moreover, Barclays must improve their credit rating, as the scandal directly affected the investors psychology and the risk perceived by the public, resulting in a crisis of confidence.6.1 ReferencesBarclays (2009) Barclays Annual Report 2009 OnlineAvailable at http//www.barclays.com/annualreport09.pdf Accessed 10th March 2010 Barclays PLC Official websiteAvailable at http//www.barclays.co.ukNorris, F. (2012) The New York Times Banks Ability to Rig Rates Shows Need for Change.Online Available at http//www.cn.nytimes.comAccessed 12th July 2012Johnson, G., Scholes, K.,(2009) Exploring Corporate Strategy, London FT. Prentice Hall. pp65. Treanor, J. (2013) The Guardian Barclays assisting with investigation into cash market manipulation , Online Available athttp//www.theguardian.com/business/2013/oct/30/barclays-cooperating-investigation-manipulation-currency-markets Accessed 30th October 2013Barclays (2011) Barclays Annual Report 2011 OnlineAvailable at http//www.barclays.com/annualreport11.pdfAccessed 08th March 2012Treanor, J. (2013) The Guardian Barclays warned of colossal mistake with plan to cut 1,700 branch jobs. Online Available athttp//www.theguardian.com/business/2013/nov/14/barclays-warned-mistake-cut-1700-branch-jobs Accessed 14th November 2013Barclays (2010) Barclays Annual Report 2010 OnlineAvailable at http//www.barclays.com/ammiareport10.pdfAccessed 10th March 2011Hannagan, T.,(2008). Management- concepts Practices, London FT Prentice Hall. PP279 Murphy. D.,(2009). Understand Risk The Theory and Practice of Financial Risk Management, London Chapman Hall/CRC. PP39-466.2 BibliographyAckrill M. Hannah L. (2011) Barclays The business organisation of Banking, Cambridge Cambridge University Press. Alan , M. (2008) The Oxford Handbook of International Business. New York Oxford University Press. Campbell, D. Stonehouse, G. Houston, B. (2008) Business Strategy. Oxford Elsevier Ltd Press. Economist www.economist.comObserver www.theguardian.comBarclays (2012) Barclays Annual Report 2012 OnlineAvailable at http//www.barclays.com/ammiareport12.pdfAccessed 8th March 2013