Foundation Degree Leadership & Management

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Table of Contents
Introduction......................................................................................................................................3
Overview of the company................................................................................................................4
The ways by which business strategies are developed in the Lloyds Banking Group....................4
Evaluating PESTLE framework in the development of business strategy..................................4
Evaluating the internal and external strength and weakness of the company by using SWOT
analysis........................................................................................................................................5
Evaluating Porter's 5 forces theory in the development of business strategies in the context of
the Lloyds group..........................................................................................................................7
Evaluating the effectiveness of the strategies in the context of the Lloyds Banking Group...........9
Analyzing the alternative strategies that can be used by the Lloyds Banking Group...................11
Identifying recommendations for the future of the Lloyds Banking Group..................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

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Introduction
The Lloyds Banking Group is the largest financial institution in the United Kingdom. The
company has its operation throughout the whole world. It has almost 30 million customers
worldwide. The main purpose of the company is to help the British people and their main
objective is to make the Lloyds Banking Group in the number one company in this sector. In
this report, the internal and external factors which have significant impact on the performances
of the business are evaluated by different strategies. The present rate of competition in the
banking sector is very high in the context of United Kingdom. To survive in the market and
continue stable growth in the market new strategies should be used.

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Overview of the company
The Lloyds Banking Group was established in 1995 as a public limited company which has its
operation throughout the whole world. It is one of the largest financial institution of the United
Kingdom. It is one of the oldest companies in the UK which was established by the parliament
of the Scotland in 1695(Lloydsbankinggroup.com, 2019). The banking company successfully
doing business in different types of banking sector and providing numerous services including
retail banking, commercial and life insurance and so on.

The ways by which business strategies are developed in the Lloyds

Banking Group.
The Lloyds Banking Group is one of the largest financial institutions in the United Kingdom. It
is a multinational company for which it has to developed its business strategies in the context for
both of the United Kingdom and the rest of the world. Different types of theories are evaluated in
this report to find out the implications of those theories in the development of business strategies
for the Lloyds Banking Group.

Evaluating PESTLE framework in the development of business strategy

PESTEL analysis is a very popular tool of analyzing the external factors or macro-economic
factors which have impact over the products of the company (Lynch, 2018). In the PESTLE
analysis, the impact of political, economic, social, technological, legal and environmental factors
is evaluated in the context of a business. Here the impact of all of these 6 elements are discussed
below in the context of the Lloyds Banking Group.

Political: The political environment relating the business and government regulation is discussed
in this factor. As a multinational company, the Lloyds Group has to make their decision based on
different types of regulation of different countries. The company has to be prepared in all types
of present and future change in the legislation of its operating countries.

Economic factors: These factors have significant impact on the profitability of the
organizations. Before implementing new strategy for the business, the authority of the banking
group has to evaluate all the economic factors such as interest rate, exchange rate and so on.

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Social factors: Different countries are maintaining different types of social norms and behaviors.
For example, when the company operates in the middle east, they must be respectful about their
interest less banking system. Population growth rate, education rate, average age and lots of
other things need to evaluated.

Technological factor: Modern technology have changed the whole world to a large extent. All
the new types of technological advancement must be evaluated before developing a business
strategy to find whether the technologies can be shed to make the company more successful.

Legal factors: These factors involve various legal right, right of preserving intellectual property,
advertisements right ect. As a multinational company, the Lloyds has to take all the legal terms
of each countries seriously to be successful in the implementation of its business strategies.

Environmental factors: Environment plays the most vital part in the development of business
strategies for a business. The business should follow environmental guidelines strictly to insure
sustainable growth of the company.

Evaluating the internal and external strength and weakness of the company
by using SWOT analysis

SWOT analysis is a very useful tool to determine the strength and weakness of the companies in
both of the internal and external context. In SWOT analysis, environmental data are evaluated to
find out the market position of the business, steps that can be used by the management for
achieving the objectives of the company (Hitt, 2017). A SWOT analysis is provided in the
context of the Lloyds Group.

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Figure: SWOT analysis, Source: (ResearchGate, 2019)

Strengths: It is the internal factor of an organization which makes the organization separate
from others. The Lloyds has strong market base with huge number of loyal customers. They are
doing financial business for a long period of time which gives them much popularity. The
balance sheet discloser procedure and the innovative banking technology are also regarded as
their inherent strength.

Weakness: It refers to the factor which may create obstacles for the business in achieving the
goal (Pettinger, 2013). The extreme competition in achieving yearly goal create some problems
in the organization. Again, in different countries there lies different types of issues which create
problems to keep pace with the organization's main objective.

Opportunity: It refers to the external factors that are necessary for the organizational success.
Spreading business in the new areas of the world with highly qualified employees who are
willing to do join in the company is regarded as their best opportunity in the market.

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Threat: It refers to the external factors like different oppressive law, extreme competition, social
economic change that may create negative impression over the business. These threats cannot be
controlled by the authority of the company.

Evaluating Porter's 5 forces theory in the development of business strategies

in the context of the Lloyds group

Porter's five forces is a useful tool in evaluating a company's future in a totally new market. As a
multinational company, the Lloyds group can use Porter's five forces theory in evaluating their
opportunities and possible threat of entering a new market.

Figure: Porter’s Five Force, Source: (Lucidchart, 2019)

Competitive rivalry: Competitive rivalry refers to the number of competitors who are already
operating their business in the same market (David, 2013). For example, when Lloyds started its
operation in Singapore in 1973, there were already many insurance companies in Singapore. But

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the company had kept its services same as the UK and that appreciate the customers. So, they
become successful in the market.

Threat of new entrance: After entering a new market, the operation of the business can be
hampered by the new companies who offer the same types of services. So, specialized types of
products can minimize these risks.

Power of suppliers: In the context of the Lloyds business they face very little portion of this
threat because of its long-term popularity and business style which is different from most of the
business.

Power of the customers: It can be a threat for the company when the potential accountholders
are reluctant to obey the rules of the company. It can affect the profitability of the company.

Threat of subsidiary: Subsidiary companies’ different offerings can create problems for the
company unless it can take essential measure. But in the context of the giant companies like the
Lloyds Banking Group, threat of subsidiary company has not much impact because the largest
companies have their own reputation which is the most important tool for them.

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Evaluating the effectiveness of the strategies in the context of the
Lloyds Banking Group
The main business strategies of the Lloyds Banking Group are to provide services in the simplest
way. The company always focused on the customers and has presented a low risk environment
for the customers. The company also try to make the right thing for the customers, colleagues
and all other stakeholders. These strategies have made them successful in the context of the
United Kingdom and all others countries in where the company operates. In the 1st half of 2018
they have announced £0.6 billion pre tax profit which indicates they will earn more than £1.2
billion which was earned by them in 2017. The companies annual return of capital is 96.9% and
investment return is 1.5% (Interbrand, 2019). For a banking company, it is a very good sign
because they are able to find profitable project from which they can easily recollect their
investment. The Lloyds Banking Group is the largest company in this sector in the context of the
UK. They have 30 million customers all over the world. The group has 13 million active online
customers as well. So, the business is holding the number one position in the market of the UK.
They have approximately 75000 employees in 2000 branches across the UK. But the customer
feedback regarding the performance of the bank is not up to the mark. They have a strong
customer base but at the same time their customers turnover rate is also high.

Figure: Customer’s feedback, Source: (Trustpilot, 2019)

According to a UK based research organization 67% customers think that the Lloyds
performance as a bank is bad. Only 17% customers think that the performance of the bank is

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excellent. So, the bank should consider this matter with great importance. Customer feedback is
an important issue of consideration for the company because it will help them to find out
problems in the current operation and provide assistance for the future.

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Analyzing the alternative strategies that can be used by the Lloyds
Banking Group.
The Lloyds group use PESTLE and SWOT analysis to evaluate the internal and external factors
of the business that may affect their operation. Again, the Porter’s Five Force is also discussed to
find out their future business progress in the context of a new business region. The company can
use some alternative strategies to get better result. The company has some problem with its
customer which can be identified by the customers feedback and the analysis of those feedback.
The Lloyds group can use the following strategies for developing better relationship with the
customers,

1. The company can offer reward for the staffs for their better performance. In this reward-
based performance system make the officers more efficient in rendering service.
2. They have some problems regarding their online customer service. Specially the new
customers have faced some problems about the authentication of the accounts. The
banking group should implement most modern technology in this section so that the
customer can get rapid help.
3. The Lloyds group’s insurance services are very popular in the world. But small and
medium sized business have objection about the insurance policy and cost. For acquiring
more customers their pricing strategy should be renewed that must help them in
achieving their business goal.

The Lloyds group can use ‘Gap Analysis’ to evaluate their performance. The gap analysis is the
way by which the performance gap of a company can be evaluated easily (Birkinshaw, 2014).
Every company has its own strategy which is developed the management of the company in the
very beginning of their operation. After a certain period of operation, the authority of the
company determines whether the required performance goal is achieved or not. This analysis is
called gap analysis which is very popular for developing the marketing strategy of a company.
There are various types of tools and techniques of doing gap analysis, such as the SWOT
analysis and the McKinsey’s 7s framework.

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Identifying recommendations for the future of the Lloyds Banking
Group
The Lloyds Banking Group is the largest banking institute in the UK which has the highest
contribution in the economy of the UK from this sector. It has the largest market share in the
United Kingdom but the company has some limitation which has created some problems in their
operation. Here some recommendations are provided for the future of the company,

 The company should develop their online service and it should make 100% automation
process along with 24/7 hours services for the customers who are their online
customers.
 The company’s advertisement procedures should be changed and should make up to
date like the other modern companies.
 The authority should give much importance on the customer feedback because it will
make them capable to find the best way of operation.
 They should implement Islamic Banking strategy for acquiring more customers in the
Middle East where most of the countries are Islamic country.

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Conclusion
Businesses world has become more complicated now a days. Extreme amount of competition has
faced by the business organization in the present world. Several strategies are being used by the
organization to survive in the market. In this report, the business strategy of the Lloyds Banking
Group is evaluated based on PESTLE, SWOT analysis and Porter’s Five Force. Some new
strategies like gap analysis is also evaluated here. Finally, the company should follow the
recommendations which are provided in the report.

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References
Birkinshaw, J. (2014). Strategic management. 3rd ed. Northampton, MA: Edward Elgar Pub.

David, F. (2013). Strategic Management. Old Tappan: Pearson Education UK.

Hitt, M. (2017). Strategic management. New york: Cengage learning.

Interbrand. (2019). Interbrand - Global Brand Consultancy. [online] Available at:

https://www.interbrand.com/ [Accessed 25 Feb. 2019].

Lloydsbankinggroup.com. (2019). Home - Lloyds Banking Group plc. [online] Available at:

https://www.lloydsbankinggroup.com/ [Accessed 25 Feb. 2019].

Lucidchart. (2019). Online Diagram Software & Visual Solution | Lucidchart. [online] Available
at: https://www.lucidchart.com/ [Accessed 25 Feb. 2019].

Lynch, R. (2018). Strategic Management. Harlow, United Kingdom: Pearson Education Limited.

Pettinger, R. (2013). Introduction to management. 3rd ed. Basingstoke: Palgrave Macmillan.

ResearchGate. (2019). ResearchGate | Share and discover research. [online] Available at:

https://www.researchgate.net/ [Accessed 25 Feb. 2019].

Trustpilot. (2019). Trustpilot Reviews: Experience the power of customer reviews. [online]

Available at: https://www.trustpilot.com/ [Accessed 25 Feb. 2019].

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