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Introduction to Global Corporate Strategy

In the era of globalization, it is essential for businesses to obtain international expansion by adopting effectual strategy. However, if business is still focusing on local markets then it is significant for them to target outside home market i.e. called global marketing. Moreover, international corporate strategy requires business to coordinate their product and pricing strategies across international markets and thus achieve customer satisfaction. Also, business is required to focus on competitor’s marketing and sales strategy with the aim to overcome it and target both domestic and international clients.

The purpose of the report is to develop knowledge and skills regarding understanding the key strategic issues in regard to Global Financial Services Industry. Therefore, Lloyds Banking Group had been undertaken which is a leading financial service provider to both individual and business clients within UK. The main business activities of organization is retail and commercial banking, general insurance and long term savings etc.

Task 1

Firm's Competitiveness in the Global Financial Services Industry

Through reviewing the annual report of Lloyd Banking Group 2014 it can be assessed that, main aim of business is to become the best bank for both individual and business customers. They are serving around 25 million customers in UK. However, business faces tough competition from other similar financial services providing industry such as Citigroup and ICBC. It can be ascertained that as compared to such industry business is heavily involved in providing retail and commercial finance and investments to individual and business customers. By adopting effectual global corporate strategy, it assists Lloyd Banking Group to provide effectual financial services and satisfy requirements of clients. Businesses such as Lloyds, Citigroup and ICBC faces serious competitiveness.

Globalization can be stated as the way through which businesses expand its operations within different countries together with the aim to only set the national identity but become the part of the world as a whole. The advantages and disadvantages of globalization are as follows...

Advantages

  • Countries like UK, Germany are rich and thus they can sell their products and services to poorer countries.
  • Globalization assists individuals to learn varied things and also deal with people across boundaries.
  • Due to globalization imported goods are available within the country and thus people can utilize it in order to enhance satisfaction.
  • It helps in creating and offering varied jobs to people so that they can improve their standard of living.
  • It provides opportunities to local industries to work hard and compete with international businesses.
  • It utilizes resources from varied countries for producing products and services so that they are able to carry out work efficiently.
  • Through globalization clients get benefits as they get wide variety of products from which they can choose the best.
  • Businesses get access to much broad markets.
  • Here, investors get much wider opportunities to invest in different businesses.

Disadvantages

  • Globalization affects the local businesses and brands as they can go bankrupt because large multinational corporations are providing their services and dominating the world economy.
  • It also affects the local traditions and culture of people.
  • Local industries get affected because people are moving towards international firms for buying products and services.
  • High interference of political parties and thus it raises conflicts among them.
  • Globalization affects under developed countries.
  • It affects companies as they get much greater competition. Thus, it can put smaller industries at a disadvantage as they do not have resources to compete at worldwide scale.

There are varied key opportunities and threats which is faced by Lloyds Banking Group which are as follows...

Opportunities

  • Lloyd's have varied former competitors such as Bradford & Bingley which makes easier for financial service providers to win over UK businesses. However, it provides opportunities to enhance profitability of Lloyd's.
  • Financial service provider has the opportunity to enhance it mobile banking usage so that they can provide satisfaction to customers. There are wide number of British consumers who are using mobile phone to manage their financial accounts. However, increasing usage of mobile banking will help bank to minimize its operational cost per branch and satisfy needs of clients.
  • Lloyd group is planning to focus on launching Islamic banking services in order to become strong. Further, business open Islamic Nostro Account and allows different other banks to move money around the world and assist the business clients in keeping with Shariah law. However, it provides great opportunity for bank to enhance its market penetration by providing Islamic banking services to Muslim clients.
  • Further, the UK Islamic banking market is divided between HSBC, the Islamic Bank of Britain and West Bromwich Building Society. Thus, it provides enough space for Lloyd's bank to share the emerging growth opportunities in such segment of banking and provide financial services to its customers.
  • It has been assessed that, The Bank of England is planning to extend Quantitative Easing program. Further, it helps firm to decrease the interest rate and thus improve monetary growth in the economy. Moreover, the monetary base of UK is likely to grow and thus it aids banks such as Lloyds to enhance mortgage loan production. With the assistance of this, it provides loan to varied UK customers and thus satisfy their needs.

Threats

  • Business faces varied challenges and threats of fines and costs if found guilty in fixing of exchange rate.
  • The main threat to the company involves regulatory requirements that affect the market share of firm. The increase in divestments will affect group's market share and its competitive positioning.
  • There are varied proposed regulations which are likely to affect the banking industry of UK. However, there are different potential changes in UK financial standards and if these are implemented then, it may affect the banking business.

Bargaining power of Financial Service Providers

The bargaining power of financial service providers is high as they have less competition among providing banking services in UK. Thus, they have the power to charge high interest rates from consumers and also adjust the quality of products or services and delivery time lines. However, if financial service provider has such type of bargaining power than, they can affect the competitive environment and thus directly influence profitability of business. Lloyd's provides effectual financial services to both individual and business clients so that, they can demand for high interest rates. Also, the clients are ready to pay high interests on mortgage because firm owns goodwill in the market and they have minimum competition who is serving a large base of customers in UK. There are various factors which affects the bargaining power of financial service providers such as change in policies by the Bank of England. Also, fluctuation in interest rates affects bargaining power of banks.

Change in needs and expectations of customers in the global financial services industry

As per the today's era, customers require modification in services and products of banks. Thus, there are varied financial service providers who are focusing on enhancing its services to satisfy the needs of clients. Banks are required to redesign their processes as per expectations of customers so that, more number of customers can be attracted. Now-a-days varied customers prefer to use mobile application to carry out or manage their finances so it is crucial for business to set its internet banking facility to enhance the banking services worldwide. Following are the five needs and requirements of customers which they require from global financial services provider. These are as follows...

Channel expansion

It is crucial for the firm to develop right product mix and thus provide self-service channels to clients which provides them with richand consistent banking experience.

Service availability

Provide effective technology that helps in making banking easy and thus attracts large customer base.

Client usability

Bank should build a reliable, competent and responsive model to satisfy the needs of customers. Also, business analyzes feedback from their account holders so that, they can improve the same.

Data Privacy and security

Financial service provider is required to protect and safeguard the identity of clients and also ensure that, any internal or external person should not misuse the client personal information.

Easy banking

Banks are required to make their banking services easy and simple so that, clients have better banking experience (Hopkins, 2004).

Task 2

e-Banking- The Role of Alliances, Mergers and Acquisitions

Strategic alliance can be stated as the contract among two or more parties to pursue a set of agreed objectives which is needed at the time of remaining independent business firms. As per the in strategic alliance, two businesses mutually agree to share their resources to achieve common objectives. Financial service providers start strategic alliances to expand its business in the global marketplace. Merger and acquisitions can be defined as the term used for consolidation of businesses. Merger can be stated as the combination of two different companies to form a new enterprise. Moreover, acquisition is the purchase of one company by another and forming a new company. It is generally done by firms when they found themselves less profitable or competition in market is high.

Furthermore, it can be assessed that strategic alliance, mergers and acquisitions assists Lloyds Banking Group in order to develop their digital capabilities in the area of insurance, customer finance, retail and commercial banking markets. Thus, financial service provider undertakes such consolidation methods such as merger and acquisition and acquires other banking firm which is facing challenges in overcoming its debts. It helps Lloyds to expand its market share and thus provide varied products and services in the area of insurance and customer finance for education loan, holiday loan etc. Further, business can also merge with similar financial service provider and thus carry out its operations on large scale and attract varied customers. Thus, through merging with other banking firms, Lloyds can provide varied diversified services to clients. Also, they can determine needs and expectations of customers and provide them with mobile banking usage facility so that, customer satisfaction can be attained.

All these consolidated methods help Lloyd’s banks to execute internet banking in their system and thus attracting customers to utilize the online banking. Through determining the needs and expectations of customers, business plans strategic alliance with other financial service providers and deliver mobile banking facility to gain customer satisfaction. Merger and acquisition helps Lloyds Banking Group to expand its operations in different markets such as providing customer finance, retail and commercial banking with the aim to satisfy customer needs. Thus, by undertaking such consolidated methods it might assists banks to encourage its digital abilities and provide customized services to clients as per their requirements. Through merger and acquisition, it helps in maximizing the value of financial capabilities. Such consolidated methods assist in benefiting the banking group to enhance the productivity and improving the client satisfaction. It also aid banks to minimize the cost and risks by distributing them across the members of the alliance. However, sometimes banks form strategic alliance in order to gain political advantage. With the assistance of this, banks can alliance with a local foreign business in order to gain entry in the international market and overcome local barriers. Thus, it helps in expanding the operations in worldwide market and enhances the performance of the firm.

It can be assessed that as per my opinion, the business model undertaken by Lloyds is best fit for the aim of providing real differentiation and positioning in the fast changing era of globalization. The purpose of business is to provide customer satisfaction and fair return to their shareholders. Thus, in such fast changing internet and mobile banking market, business evaluates the needs and requirements of clients and put their demands on first priority so that they can create goodwill and make a difference together. Lloyds possess the best business model i.e. they are leading financial service group which provides low cost, minimum risk and client focused UK retail and commercial banking business model. It operates to provide banking services to both individual and business clients. Furthermore, business also creates value for our clients by developing strengths and developing distinct image of firm in market. It also provides superior customer insight and thus focuses on maintaining relationship.

Thus, it can be assessed that Lloyds business model is the best suitable and provides differentiation and positioning of brand in the fast changing internet and mobile banking market. Also, firm should determine the needs of customers and develop mobile usage because in Britain there are various customers who are using mobile banking to manage their finances. Thus, Financial Banking Group is required to focus on maintaining relationship with customers and satisfy their needs and wants to build trust among them. In the current era of globalization, it is crucial for business to undertake online banking method because if they do not adopt this then customers have varied choices available in the form of competitors. Hence, business is required to improve its services and products by adopting innovative technology in the form of online banking so that, they can attract large number of clients. However, the UK financial services market remains one of the largest in the world and thus Lloyd’s business model is required to be formulated as per the UK economy. Thus, it provides real differentiation and positioning for future regulatory reform and attains desired objectives.

Task 3

Corporate Governance, Csr, Leadership And Competitiveness

Corporate governance can be defined as the processes and mechanisms through which businesses are controlled and directed. Here, the board members and managers of firm have the rights and responsibilities that involve rules and procedures in order to make decisions in the corporate affairs. Further, business is also required to undertake corporate social responsibility (CSR) in order to develop regulations and take initiative to protect the social environment. Also, company is required to carry out various CSR activities with the aim to integrate regulation into business model. Moreover, there are various relevant management and leadership concepts available with firm which helps them to focus on customer satisfaction. It also rebuilds their colleague’s pride of working in their group by undertaking best CSR and corporate governance practices. Further, Lloyd undertakes such business model which puts customers at their heart and provides them with quality products and services in order to develop long term view through making the most emerging digital channels.

The main strategy developed by Financial Banking Group is that, they provide low cost, minimum risk and customer focused UK retail and commercial banking business model. Thus, keeping in mind such objectives business focuses on client needs and expectations in order to deliver them the best quality products and services. Further, in the coming year’s business is required to bring varied changes in their technology, customer behavior and improving regulatory requirements.

Developing the best customer experience

Clients are the heart of business and thus bank is focusing on building customer experience by providing them with multi-brand products and services. Further, business is required to develop its digital presence by providing internet banking facilities to clients and delivering high quality services.

Becoming simplified and easy

Business creates operational capability to enhance and integrate as per the change in customer needs and requirements through becoming cost leadership among UK financial services providers. However, by such cost leadership it enables the business to provide increased value to our clients and competitive differentiation.

Delivering sustainable development

UK economy provides growth opportunities to businesses in order to become market leadership in providing varied products and services to consumers.

Colleagues

Lloyd bank is trying to focus on their employees and provide them with proper training so that they can focus on customer requirements in becoming the best financial service provider.

Helping Britain prospers

It states that business is regularly focusing on satisfying the needs of UK clients by providing them with best financial products and services.

Through, the above objectives it can be assessed that; it helps Lloyds in developing its ability in order to satisfy the needs and requirements of clients. Thus, financial banking group undertakes effectual corporate governance scheme, CSR and varied leadership and competitiveness theories to give tough competition to rivals. All these strategies assists business to target clients and develop long term relationship with them by providing them with quality financial products and services. Hence, the ability of the Lloyds Chairman and senior management team to target customers and satisfy their requirements. All the senior management and employees of organization are focusing to make Lloyd the best bank for all its stakeholders. Thus, such objective can be attained by the firm through developing strategic objective and providing low cost, minimum risk and improving customer behavior within firm.

As per the corporate governance report of 2014, the Chairman states that they are focusing in developing best financial services in order to develop trust among clients as well as proving to be the best bank for shareholders. Firm has taken varied crucial decisions in order to become best bank for customers. Hence, corporate governance framework enables strategic, accountable and responsible decision developed by the colleagues. Also, the team of bank supports colleagues in order to fulfill business objectives of CSR and corporate governance. Lloyd's Chairman and senior management helps business to put forward to satisfy customers and shareholders. With the assistance of such business model, it puts clients at the heart which is based on traditional attributes such as prudence and long term view in order to develop emerging digital channels. Also, business is focusing towards developing internet and mobile banking market as it is the need of young customers. They are carrying out their most of the financial activities by using mobile phones. Thus, business is required to redesign its system and use innovative technology to attract clients.

Task 4

Personal Reflections on Learning and Overall Report Presentation

With the help of this assignment it helps me to analyzing significance of Global Financial Services provided by Lloyd bank to its clients. Through carrying out the report, I understand that the objective of bank is to satisfy needs of clients and shareholders. Also, business is trying to improve its mobile usage services by adopting innovative technology such as internet and mobile banking so that, customers can be attracted towards the firm. The UK banking sector is vast and thus Lloyd gains more than 25 million customers and delivers them best financial services. It involves both individual and business clients and firm provides different financial instruments so that bank can satisfy Britain’s households, businesses and communities.

Furthermore, Lloyd banking Group is focusing on the UK centric approach strategy in which they focus only on needs and requirements of clients and fulfill it in order to achieve goals. Also, business strengthens its colleagues with the aim to focus them to build effectual strategies and satisfy needs of shareholders by providing them with fair return. Moreover, business targets UK customers only but they are required to expand its operations by merger and acquisition and focus on worldwide market in order to enhance customer base. As per my view point it can be stated that, Lloyd senior officials like Lord Blackwell are continuously thinking upon the expansion of business in global market but they are lacking somewhere which is proving them to focus currently on local market. Business lacks in providing mobile banking usage services thus they need to be innovative and adopt such services to attract clients and satisfy their needs.

Conclusion

From the accomplished report, it can be articulated that Lloyd Banking Group provides financial services to UK customers. Moreover, firm is planning to expand its operations in global marketplace. Therefore, it needs to undertake effective approaches such as strategic alliance, merger and acquisition with the aim to develop internet banking system. Also, financial banking group is required to determine needs and expectations of customers in the global financial service industry and then provide them with suitable quality products and services to attain customer satisfaction. Furthermore, business undertakes CSR, corporate governance and leadership competitiveness to build effective digital channels. However, it assists clients to develop long term view and provide best services to attain satisfaction among them. At the end, it can be stated that Lloyd senior management and colleagues are trying to develop global corporate strategy and is expanding its operations globally.

References

  • Aduda, J. and Kingoo, N., 2012. The relationship between electronic banking and financial performance among commercial banks in Kenya. Journal of Finance and Investment Analysis.
  • Altuntas, C. and Turker, D., 2015. Local or global: analyzing the internationalization of social responsibility of corporate foundations. International Marketing Review.
  • Aoki, M., 2013. Controlling insider control: issues of corporate governance in transition economies. Chapters.
  • Arbogast, G., Thornton, B. and Bradley, J., 2012. A global corporate sustainability model. Journal of Sustainability and Green Business.
  • Boone, A. L. and Ivanov, V. I., 2012. Bankruptcy spillover effects on strategic alliance partners. Journal of Financial Economics.

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