Barclays Plc Company Profile

Published Date: 02 Nov 2017

Contents

1. Introduction:

barclays.jpeg

1.1 Introduction to the organization:

For the purpose of this assignment, the company that has been selected is BARCLAYS PLC; the following text would give a brief company profile followed by the identification of the customer perceived value for the organization by the use of the Customer Value Hierarchy Model.

Company profile:

In the world, one of the leading financial institution is Barclays headquartered at Churchill Place, London. This corporation is 300 year old that became a main financial services provider engaged in commercial banking and retail, credit cards, management services and investment banking provider for large world-wide equity firms. Barclays has a broad international presence in Africa, Asia, and Europe and off lately has initiated to expand in the U.S market as well. Moreover, it moves protects, lends and invests money for than 38 million international customers and clients.

Barclays has two business clusters which are both compromising foremost business and brands:

Global Retail Banking and Corporate and

Investment Banking and Wealth Management

Before, take a look at the customer perceived value of the Barclays brand, the project would like to discuss the Customer Value Hierarchy Model, and then try to apply them to the customers of Barclays.

1.2 Definition of marketing:

The activities of a company associated with buying and selling a product or service. It considers advertising, selling and delivering products to individuals. Someone’s who work in marketing departments of companies try to get the attention of target audiences by using slogans, packaging design, celebrity endorsements and general media exposure. The four 'Ps' of marketing are product, place, price and promotion.

Most of the people trust that it is just about advertising and sales. Moreover, it is everything a company does in order to get customers and hold them to maintain a good relationship. Still the small tasks such as playing golf with a prospective client, returning calls promptly, writing thank-you letters and coping with a past client for coffee can be thought of as marketing. The supreme goal of marketing is to cope with a company's products and services to individuals who need and want them, thereby ensure profitability.

1.3 Customer Perceived Value

According to Zeithaml (1988) "the customers Perceived value is a overall assessment of utility of a product based on perceptions of what is received and what is given."

The perceived value of customers any product is the overall assessment of utility or use of a product based on perceptions of what customer receives and what is giving to get the desired service or product.

Customer delivered value

Total customer cost

Total customer value

Monetary cost

Product value

Services value

Time cost

Energy cost

Personnel value

Psychic cost

Image value

Figure : Customer Perceived Value

1.3.1 Customer Perceived Value of Barclays with reference to Gale Model

According to Gale (1994) "Customer value is market perceived quality which is altered for proportional price of product. It is just customer’s opinion of products or services as compared to that of competitors."

Gale has denoted the customer perceived value concept as the ratio between perceived benefits and perceived sacrifice:

Customer Perceived Value= Perceived Benefits

________________

Perceived Sacrifice

As per Gale, at first perceived benefits has positive influence on consumer’s view of product afterwards it may be on purchase intensions. In contrast, at first perceived sacrifice has negative influence on consumer’s view of product afterwards it may be on purchase intensions.

Perceived Benefits

Perceived Risks

Perceived Value

Purchase Intentions

Here the benefits consider customers’ desired value, Sacrifices, conversely, include monetary and non-monetary considerations. Hence, value permits three key factors: quality, price, and convenience, where convenience is the time and effort expended by the customers.

In context to Barclays, Perceived benefits are the attributes of service being received and customer perceived quality and price of product.

Perceived sacrifice are the customer costs involved in purchasing, like time, travel etc.

1.3.2 Customer Perceived Value of Barclays with reference to Gronroos Model

As per Gronroos (2000) identified the customer perceived value with three different equations; first equation makes a distinction among value in episode and relationships and rest of the equations included a separation into core and additional services:

CPV = _Core solution + additional services… (1) Price + relationship costs

CPV = Core value + added value… (2)

CPV = Episode value + relationship value… (3)

According to Gronroos (2000) distinguishes among added value and core value. Gronroos states that core value is benefits of a core solution while compared with price paid for that solution. The added value is made by additional services in relationship compared with relationship costs that happen over time.

In Barclays, in customer relationships such contacts and procedures are not handled as services, but as administrative routines or are pertained only internal efficiency, their consequence on customer perceived value is usually critical. Still the high quality of core value is rapidly destroyed by late deliveries, lack of delayed maintenance, proper support and/or unfriendly and undependable personnel and a lack of interest in service recovery.

1.3.3 Customer Perceived Value of Barclays with reference to Holbrook Model

According to Holbrook (1994) customer value is comparative preference that characterizing a consumers experience of interacting with goods or services (person, place, thing, idea or event).

Intrinsic/ Extrinsic: while using a product /services consumer perceives value to an end versus an end in it.

Self-oriented/Other-oriented: The consumer perceives value for consumer’s own benefit as versus the benefit of others.

Active/Reactive: The customer perceives value by direct use of an object as against comprehending, appreciating or responding to an object.

An essential perspective of Holbrook’s argument is that whole eight types of perceived value tend to be ‘compresent’ which means consumers tend to take place together to altering degrees – in any given consumption experience.

Therefore for a company such as Barclays, it would be very appropriate to utilize this model considering products that Barclays has to bid fits in quite easily in distinct dimensions as presented in the typology.

1.3.4 Customer Perceived Value of Barclays with reference to Woodruff’s Model

A Value-Hierarchy Model

According to Woodruff (1997) suggested that Customer value is a customer’s perceived preference for and evaluation of those product attributes, attribute performances and consequences developing from use which facilities achieving the customer goals and purposes in use situations.

‘Value hierarchy model’ permits consequences, consumption goals and attributes, as well as integrates desired value and received value. This expresses that value stems from customers’ learned perceptions, and evaluations, preferences, and that customer value hence changes over time.

Desired Customer value Customer Satisfaction

Customer’s Goals and Purposes

Goal-Based Satisfaction

Desired Consequences in Use Situations

Desired Product Attributes and Attribute Preferences

Consequence-Based Satisfaction

Attribute-Based Satisfaction

With Received Value

Consequently the hierarchy proposes that customers conceive of desired value in a means-end way. Generally it will be known as system to run business during the nation by perception of customer’s goal and satisfaction over it. Beginning the bottom of hierarchy, customers begin to perceive about products as lot of attributes and its performance.

When using and purchasing a product, customers form preferences or desire for particular attribute based on ability in order to facilitate attaining desired experiences.

Looking down the hierarchy from the top, customers use goals and tastes to bind significance to results.

As well as customer’s use situation plays a vital role in rating and also in desires.

OBJECTIVES of Barclays:

Safety of the account at all times

Availability of loans at a good interest rate

Easy personal banking

Saving account options

Online banking to keep a record of their account details at all time

CONSEQUENCES of Barclays:

Easy accessibility to the account

Saving for the rainy day

More control over their own finances

Peace of mind as the customer is aware that the account details are secure and safe

The customer does not require to keep much cash with them at all times because of the debit cards

ATTRIBUTES of Barclays:

Barclaycard

Pin- sentry device

Online banking facilities which enable the customers to check account balances, make transfers, setup standing orders and direct debits.

Debit card

Cheque books

By observing the above attributes, objectives and consequences list one can recognize the brand value as perceived by customer. The brand Barclays is a extensively familiar name and almost every person in the UK is know.

2. Value Proposition:

This part of the project would evaluate the value proposition or the customer value proposition of Barclays and contrast it with the customer value proposition of HSBC. But before we proceed to comparing and contrasting the value propositions of both the brands we first need to understand, what a customer value proposition really is.

2.1 Definition of Value Proposition:

A value proposition is a promise of value to be delivered and a belief from the customer that value will be experienced. A value proposition can apply to an entire organization, or parts thereof, or customer accounts, or products or services.

A business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.

2.2 Analysis of value proposition of Barclays:

Capital Strategy:

Barclay’s capital management activities will attempt to maximize shareholders’ value by optimizing the level and mix of its capital resources.

Barclay’s ability to operate as a bank is directly dependent upon the maintenance of adequate capital resources.

Barclays works according to a centralized capital management model considering regulatory and economic capital.

The Group’s capital management objectives are to:

Maintaining the sufficient capital required to meet minimum regulatory capital requirements set by the UK FSA.

Maintaining sufficient capital resources which can support the Barclays risk appetite and fulfill the economic capital requirements.

Support the bank’s credit rating

Ensure that the locally regulated subsidiaries can meet their minimum capital requirements without having to borrow from other financial firms.

Allocation of capital to support the strategic objectives set by Barclays, including optimum returns on economic and regulatory capital.

Funding strategy:

Barclays will manage the funding position to comply with the regulatory requirements prescribed by the UK FSA .Barclays operates on centralized governance and control process that covers all of its liquidity risk and management activities.

Funding Structure:

Global Retail and Commercial Banking, Barclays Wealth and Head Office Functions are to be self-funded through customer deposits and Barclays equity and other long-term capital. The Barclays Capital and Absa businesses will be funded through the wholesale secured and unsecured funding markets.

Major currency payment flows and payment system collateral are going to be monitored and managed, so it can be ensure that at all times there is sufficient collateral to make payments.

Compare and contrast the value proposition:

To understand the customer value proposition of Barclays and then to contrast it with the value proposition of HSBC, this project is going to use the SWOT analysis which is preceded by the mission statements and the vision statements of both Barclays and HSBC, thus giving us a better idea of what the customer expects from the brand and what are the promises being made by these institutions to potential and existing consumers.

2.2.1 Mission and vision of Barclays:

Mission: "To develop & deliver the most innovative products, manage customer experience, deliver quality services that contributes to brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank."

Vision: "We have a clear view of where growth will come from over the coming years. While there will be significant growth opportunities in the UK, we see many more internationally. Barclays will become a leading global universal bank."

2.2.2 SWOT Analysis of Barclays:

Strengths:

Extensive network in Europe providing business sustenance.

Focus on cost efficiencies which ensure relatively higher profitability.

Ability to lend amidst reduced size of the balance sheet.

Associated with innovation, brought out the first credit card in 1966, most recently the OnePulse card combining Oyster, credit cashless functions for its customers.

Opening of several new branches, along with a massive refurbishment programme.

Weaknesses:

Strained trading income impacting the revenue diversity.

Barclays Capital credit market exposures are impacting the financial position and performance.

Large bonuses for the Directors have attracted unwanted attention.

Expansion plans in the Asian market thwarted, when Barclays were outbid for ABN Amro in 2006.

Opportunities:

Barclays was keen to acquire some of Lehman’s assets prior to its collapse but however, after the collapse, they have been able to negotiate a better deal with liquidators which also allowed them to be very selective in which parts of the business they actually wanted to acquire.

The bank’s strategy to offer a full portfolio of services worldwide, provides a wide range of cross-selling opportunities.

Asia continues to be an opportunity for expansion, and operations are being set up in a number of locations.

Welfare provision has decreased in many countries because of the cost to governments, and Barclays sees self-provision as an increasing trend that it can utilise.

The court recently found that Barclays banking charges, which had been challenged legally, were enforceable, thus repayment is not necessary and charges can continue to be enforced.

Positive outlook for buy to let market may bring business volumes.

Buoyant secured personal loans market in the UK could help the business.

Threats:

Bleak outlook for the UK economy.

Regulatory fines can compress margins and financial position.

Increase in online fraud.

Barclays has been accused of loss-making investments associated with the sub-prime market from its accounts to those of other investors, and there is a risk it may be sued.

While offering a wide range of services provides opportunities, there is also the threat that customers may prefer to go to suppliers who present a more specialised approach.

Barclays acquired a reputation for closing branches because of a high incidence of this in 2000, and competitors have been able to position themselves as more consumer-friendly through a strategy of keeping branches open.

The Asia expansion is seen as risky given that Barclays are in a less strong position than banking industry leaders regarding capitalization, and this may detract investors.

2.3. Competitors of Barclays:

HSBC is a universal bank and is organized within four business groups: Commercial Banking; Global Banking and Markets (investment banking); Retail Banking and Wealth Management; and Global Private Banking.[9] It has around 7,200 offices in 85 countries and territories across Africa, Asia, Europe, North America and South America, and around 89 million customers.[6] As of 31 March 2012 it had total assets of $2.637 trillion, of which roughly half were in Europe, the Middle East and Africa, and a quarter each in Asia-Pacific and the Americas.[7]

HSBC Holdings plc was founded in London in 1991 by The Hongkong and Shanghai Banking Corporation to act as a new group holding company[1][2] and to enable the acquisition of UK-based Midland Bank.[4] The origins of the bank lie in Hong Kong and Shanghai, where branches were first opened in 1865.[3] Today, HSBC remains the largest bank in Hong Kong, and recent expansion in mainland China, where it is now the largest international bank, has returned it to that part of its roots.[6][10]

HSBC has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. As of 6 July 2012 it had a market capitalization of £102.7 billion, the second-largest of any company listed on the London Stock Exchange.

2.3.1 Mission and vision of HSBC:

Mission: "We aspire to be one of the world's great specialist banking groups, driven by commitment to our core philosophies and values."

Vision: "We envision enabling HSBC to achieve its strategic objectives, driving excellence in our delivery through partnership with our customers and associates."

2.3.2 SWOT Analysis of HSBC:

Strengths:

The bank is well capitalized thus enabling it to perform relatively well against other banks in the recent economic conditions.

Going forward, the bank is unlikely to borrow from the UK government because of the huge market capitalization; this enables it to retain more autonomy.

HSBC has a strong presence in emerging markets, placing it in a good position to take advantage of future growth in those economies.

HSBC’s global presence in Europe, Asia and South America spreads the risk and offers significant economies of scale.

Rebranding relatively recently (1999), the HSBC bank has become well-established and is considered of great value within the industry circles.

Weaknesses:

HSBC strongly believes in investing in the small business sector, but the current economic situation has led to increased risks, which could potentially compromise the activity levels in the area of its operation.

HSBC’s involvement with sub-prime markets in the US has forced it to write off large figures lent to high-risk borrowers.

Despite cuts in the UK interest rate, HSBC has been increasing its mortgage rates. This can be perceived negatively by the borrowers and potential borrowers, which may add pressure to an already depressed housing market and can ultimately lead to more defaulting as borrowers would struggle with higher repayments.

A redundancy programme which was announced recently can affect morale among staff, leading to decreased productivity and loyalty.

HSBC’s branding emphasizes its global presence, and this can be seen as negatively by some consumers in its implication of homogenization and lack of personalization.

Opportunities:

HSBC’s high levels of market capitalization place the bank, in a strong position which helps it to acquire assets.

Banks which find the trading conditions particularly difficult at present could be available at low costs.

HSBC has adequate capital which it can use to purchase stronger banks such as Bank Ekonomi in Indonesia, in which it has purchased a stake to continue its Asian expansion despite challenging economic times.

HSBC’s strong position presents the opportunity to outperform other banking competitors during the economic downturn which allows it to build a reputation of being one of the safer banks for depositors which in turn helps to increase resources for lending.

Negative press coverage of competitors such as HBOS can encourage customers to choose HSBC instead.

Threats:

Decreased trust in the financial system overall, including HSBC due to financial losses suffered by investors may be a reason for them to invest elsewhere.

A financial loss which has affected the banking industry and investors on a global scale has resulted in less credit being available for customers. In the UK this coupled with increases in living cost has resulted in less money being saved.

The slump property market has led to a rise in numbers of homeowners with negative equity. If a property is worth less than what it was borrowed to finance its purchase, there is less likelihood that the bank will recoup all its losses if owners default.

Claims have been made against HSBC, about the bank understating losses resulting from US sub-prime markets, and this has led to undermining confidence in the bank by the customers.

In conclusion, Barclays is currently taking a conservative approach due to the recession. However, the downturn has provided the bank with many opportunities for consolidation. Also, with the BRIC and East Asian markets rebounding fast this region looks to be a source of potential revenues and provides opportunities for increasing operations. With the United Kingdom and the Americas looking at a slow and prolonged phase of recovery, Barclays will need to adopt a policy of looking east when it comes to operations.

The threats and problems that Barclays may face in the future will be the sustained economic situation being experienced in the United Kingdom, Europe and America which will lead to uncertainty within the retail consumer market and could result in shortage of availability of credit. This in turn makes it even more important for the Barclay’s to drive its overall corporate profitability and margin by seeking to offset the shortfalls in the UK domestic market with advances in emerging markets. All companies, like Barclays, are being forced to re-examine in particular the retail aspects of their operations seeking to remain competitive on the high street and also making cuts wherever necessary. In this current financial climate, banks are unwilling to finance each other and with the UK market on the verge of a projected severe recession, all of the retailing factors will influence Barclays competitiveness and it would depend largely on how the Bank of England and the Treasury seek to regenerate and reinforce the flagging confidence of the stock markets.

HSBC will concentrate on the strategic and prioritized areas of its worldwide operation with the further emphasis on HR management strategies and technologically-advanced applications within the group to keep a firm lead in the financial markets. HSBC’s conservative approach to banking, staying focused on keeping its capital base strong and liquid balance sheet have prevented its failure. Executing the HSBC's strategy entails improving intra-group linkages by joining up the businesses and functions to more effectively create additional value. The HSBC brand and global networks are going to be leveraged to reach new customers and offer more services to the existing ones. Efficiency will be enhanced by taking the full advantage of local, regional and global economies. Appropriate objectives and incentives will be adopted to encourage the employees to be fully engaged in delivering the strategy.

3. New Value Proposition Suggestion:

The new value proposition would be acceptable to the customers of Barclays to create, all the weakness that the business structure has to be removed and a better new business plan have to be drafted by recognizing the opportunities and removing the weakness.

3.1 A New Value Proposition:

The trading income should be relaxed so that it does not impact the revenue diversity.

Capital bonuses should be distributed in accordance with the FSA and the bad practice of the directors receiving huge bonuses should be curtailed.

Barclay’s should provide the consumers with a full portfolio of services worldwide, rather than just concentrating in the UK, this move could enable cross-selling opportunities.

Barclay’s should look towards expanding in the world’s booming economies like India, China, Indonesia etc. so that these economies could provide Barclays with the market opportunities it is looking for, thus increasing the market capitalization. This project would propose that Barclays should have an aggressive expansion policy in the Asian market.

Barclay’s needs to invest in buy to let market, which would in turn bring business volumes.

Due to the economic crisis in the markets, Barclays needs to cut down its interest rates and mortgage rates, so as to become a people’s bank and thus raising the brand image.

3.3 Mission and vision

It is very important for a company like Barclays to have a changed mission and vision if it is to make any improvement in its differentiation strategy. A company’s mission and vision is one of the main tools that would gain the trust of a customer. In order to make a customer believe that Barclays plans to give the utmost importance to customer satisfaction it needs to have an apt mission and vision which would in the end also turn out to be helpful for the differentiation strategy.

3.4 Plan Implementation:

To implement the new value proposition described above the project, will identify the key relationship-marketing issue, followed by refocusing of marketing effort: moving activities away from a marketing mix that creates a series of one-off transactions, to manage a complex network of relationships involved with the production of the whole consumer offering.

Marketing audit will be carried out so as to map out a plan that will be of most advantage to the customers and will be conducted in stages, namely at the beginning, the middle and at the end. Marketing analysis in terms of the strengths, weakness, threats and opportunities:

A review must be undertaken to understand the new value propositions outlined above in the light of internal marketing.

In concept Internal Marketing you have to make few changes, add 4P's+

3P's= 7P's i mean product, price, promotion, place, physical

evidence, people and process.

Instead of points add 7P's in Internal Marketing concep

Internal marketing:

1. PRODUCT: You need to be able to assess the market and the customers’ mood to understand if the product you are selling online is really in demand or not. A good product sold at the wrong time or in the wrong place might not sell as much, so you need to be educated in how someone surfing on the Internet will be attracted to buy your product. Appropriate research should be done ahead of time. For Example, Karma Snack, an Internet Marketing company, conducts marketing research for you through their business intelligence services. Then they help clients find the right market, demographic, and best time of year for promotion their products, and then help deploy the campaign.

     2. PRICE: By assessing what people can spend for some products, analyzing the buying patterns, and knowing the trends you must intelligently set a price that will be attractive enough to the customer and yet bring you profits. If a product is in demand and the current price is not justifying the cost, you can raise it to ensure that the overall sales will bring you profit even if you lost some customers. For Example, at Karma Snack, they help clients find the sweet spot for your product’s pricing by testing pricing, discounts, and doing in-depth research on your competition’s bottom-line. The end goal of every campaign is to increase your profitability, which reducing costs, while increasing your market share.

     3. PROMOTION: When you are promoting your product on the Internet you need to question whether you are addressing the right target audience. Even if you are getting the target audience to your website, you need to be sure that you speaking the language they understand. This way you can communicate the benefits in a way that they will understand. An effective promotional campaign will mean your advertisements and the campaign tries to reach out as many potential customers as possible. A good online marketing company would take care of analyzing the traffic to your website, the sources of the traffic, and the average stay. They would then utilize advanced behavioural analytics and predictive analysis to get more profitable customers to your business.

     4. PEOPLE: When you are doing Internet marketing, you have to be able to outsource the work and hire the people to do things like write effective content. You’ll want the people who can provide answers to visitors’ questions and provide them with the information they are looking for. It will also be necessary to effectively pass it back to the management. Lastly it is very important to ask if you have the people to share information on the product, service, or company on blogs, forums etc. by posting about it.

     5. PLACE: Obviously in the world of Internet marketing, your website is the place where all transactions happen. How interactive is your website? How user-friendly is it? How easy is it to navigate for the customer? These questions are very important to attract and retain customers. Utilization of A/B Split Testing, and Multi-variate testing on an ongoing basis, helps constantly improve your website’s performance, increase the amount of traffic which converts into a sales/lead/ or a content. Testing of colour schemes, buttons sizes, images, photos, layouts, always helps in improving your website. Your website has to constantly evolve; there are times where your website will not look like it did a week ago, a month from now, or a year from now. Only if you are data centric, all changes and improvements will be justified by increased ROI for you.

     6. PROCESS: It is very important for Internet marketing too. You need to ask if you have resiliency in your site, the ability to handle large number of customers, the proper support at all times, and a system to answer FAQs. There will be a time when an internet marketing company scales campaigns according to each client’s needs. There are times when clients tell the internet marketing company to scale back the efforts since they cannot handle the volume, and have to expand resources, and the marketing company adjusts campaigns accordingly.

      7. PHYSICAL EVIDENCE: Online, it is difficult for the customer to know how the product is going to benefit them. So it will be necessary to communicate in a way that the customer will be able to feel confident in purchasing a product or service. You can do reports and articles that will excite the customers about the product and the service. Video and images also help the customer feel comfortable. If you talk to any Online Marketing Company representative, you can learn about how they take care of video, images, content, reviews, articles, and sync all of your offline and other online marketing campaigns for accountability.

Now, that we know the 7 P’s of Internet marketing, we can now create a strategy that will incorporate them and improve the results of Internet marketing.

A new strategy development process concentrating on differentiation, cost leadership and adequate response systems would have to be created.

Action programmes would have to be designed by managers so as to determine the most appropriate course to take in tackling the weakness of the organization, with a determination of the likely costs which would be incurred.

The implementation plan would have to be monitored and controlled by keeping a track of staff performance, evaluation and appraisal schemes.

To ensure effective, appropriate and accurate results, basis for market segmentation would have to be identified, based on extensive market research.

Marketing orientation is going to be very important, the new value propositions must be made clear to all the employees and clearly defined individual goals should be set down to enable the employees to see their own contribution in achieving the organisation’s objectives.

External Marketing:

Externally implementing the plan is going to be very important, and can be done by the use of media, electronic, print and sponsorships.

The new value propositions can be made available in the form of television advertisements, available for all the people to see.

The Barclays website can act as a powerful medium on which the new value propositions can be put up and made available. It should be designed in an effective and detailed manner so that the customers are aware about all the new services available to them.

Print media is another powerful form by which the new policies can be made available for the masses.

Barclay’s is a big sponsor for many big international events and meets and can use that as an active platform to educate the consumers about the new change in the policy structure.

4. Conclusion

The following assignment is aimed to understand the position where the company mentioned is standing in the particular business field. Through this paper analysis of the issues and improvements thereafter in context to the company Barclays along with recommendations for its fulfillments has been presented. A quite emergent background of Barclays was sketched and also the prospects of the company were identified clearly in the paper.

Barclays not only has to maintain its current brand value but also persevere to enhance it further more.