Assignment Sample on BUSI1271 Global Strategy Analysis and Practice

Section 1: “Name of the title, author and link of the article”

Title: “Clearing banks of the UK set to launch with the valuation of $1bn”

Author of the article: Siddhart Venkataramakrishnan

Source: https://www.ft.com/content/105db0bf-d7d1-4cc4-9648-af3aded65dc7

Section 2: Background of the company in the article

In this article, “The Bank of London” is mentioned, which was established by the chief officer of the data of Barclays for Europe and the Middle East (Bankofengland.co.uk, 2021). The Bank of London is mentioned as the central bank of the UK and the mission of the organisation is to promote the goodness of the citizens of the country by managing monetary and financial stability. The vision of the bank of the UK is to transfigure their lives, business, society and community through different visual and applied education (Ft.com, 2021). The London bank has three primary offerings to its customers which consist of transaction banking, assisting different organizations and banks and clearing and settlement. The London bank has the hope to use different advanced technology to provide enhanced protection and prevention against the processing system in their Clearing and settlement (Ft.com, 2021). The organisation completely supports the policy of economy of the Government of the UK which has different objectives on the growth and employment.

The bank utilizes the balance sheet which helps in supporting the mission and vision of the organisation and accomplishment of the goal. The major reason for using the balance sheet is referred to as the nature of liabilities and the purpose of monetary policy is to maintain prices stability in the UK (Ft.com, 2021). Bank of London has set the liquidity policy in achieving the target of the UK Government in maintaining the inflation rate at 2 per cent (Bankofengland.co.uk, 2021). The economic condition of this bank is extremely good for the citizens who have full confidence in the market, institution and infrastructure which assist in making the financial system much better. The Bank of London works with the existing channel of payment and rapid payment network of the country (Ft.com, 2021). Many services are going to be provided by their customers who include cash management and foreign exchange worldwide without any risk of intermediaries.

This bank of the UK has set a motive and aim in hiring more than 3000 employees across North America, the UK and Europe. Organisation’s sterling facilities initiated with the “Sterling Monetary framework” (SMF) operation in the market of sterling money for the short term (Ft.com, 2021). The operations of sterling include repo and lending operation of security, deposit and funding instruments. The bank of London has a powerful motor in managing the money stability that comprises the level of price of goods and services and the availability of credit. Different activities have provided the bank with huge profits except the book notes printing which has an average cost of almost 75b pounds each year (Ft.com, 2021). MPC (Monetary policy committee) currently operates in basically two processes which include Utilisation of purchasing of assets and setting rates of the bank. The rate of the bank is set with the stages are taken to ensure that it is fully passed through to households and different businesses

Section 3: Business case summary illustrated in the article

In this article, the case study of a UK bank has been provided which makes an attractive offer and services to their groups and customers and the bank is going to act at the organisation’s portal. The bank is going to work for the portal of the organisation by offering products and services of the banking sector without becoming a bank themselves (Bankofengland.co.uk, 2021). Like the other bank, the bank claims that the average time for opening an account of a business organisation with the bank is four months. The Bank of London has stated that they had raised the amount for the benefit of themselves to 120 million dollars and has the present valuation of 1.1 billion dollars (Ft.com, 2021). The article has fully analysed the new setup of the bank to the approval of payments and processes which are going to launch in the UK for the second time in more than 250 years.

The Bank of London is going to be organised after a round of fundraising which has the maximum value at over 1 billion dollars. A critical argument has been shown by many that the subsetting providers of the bank have failed to serve and represent the customers of business properly and adequately. The Chief Information Officer of the bank announced that the clients are permitted to represent the financial product which includes large fashion companies, young entrepreneurs, clearinghouses and other bank organisations (Ft.com, 2021). Transaction of liquidity is the main procedure and product of the bank which benefits both the customers and the bank; transaction banking is a broad level of banking product that covers certain ranges from cash management to card payments.

The management of the UK Bank of London announced that they are going to manage the customer more feasibly and flexibly around the world without the risk of any intermediary. They also claimed that they had the vision to be the top of the other and recognised as the most renowned bank for its liability and policies (Ft.com, 2021). In this article, the main point that is highlighted is regarding their clearing method and the faster payment method for its targeted customers. The latest funding of this bank is around 8 million dollars which have led to the foresight of this pending company of New York (Ft.com, 2021). Characteristics of this bank are also represented in this article which comprises faster, affordable and safe transactions. The services of the organisation are going to include transferring money around the world, management of cash and compliance.

Section 4: Appropriate utilisation of concepts, models and theory

Table 1: SWOT analysis

(Source: Ft.com, 2021)

Table 2: VRIO analysis of the Bank of London

(Source: Griniece et al. 2017)

Ansoff matrix framework: The model is considered as the technique of marketing that helps in demonstrating the growth and product strategy of the business. Market development, product development, market penetration and diversification are recognised as the most important factors of the corporate business strategy (Zanjani et al. 2020).  Bank of London framework of an answer to plan and analyse the Strategies for development and sustainable growth rate that can be measured by multiplying the earning retention rate of the company by its equity return. The bank of the UK utilizes a strategy to maximize the existing cells of the products and services on the pre-existing market for raising the share of the market (Anh et al. 2021). In doing this, the bank attracts most of the customers from the Rival wreath to make sure that their customers purchase the existing services and products most frequently. The policy can be easily achieved by a decrease in the price of the banking products, distribution support and increasing the promotion factor.

The utilisation of market development of this Bank of London means rising of the sales of existing services on the prior market that is unexplored. The expansion of this banking business in the market involves an evaluation of the process in which the existing offer of the company can be sold on the new market for the growth in the existing market. As cited by Rinataa et al. (2020), the market development of this Bank can be easily achieved by distinct segments of the customer and organisational buyers for the profit which was previously sold only to the households. In the development of the product, the main purpose of the Bank of London Is to launch their new services and products in the existing markets and start up a business on the new market (Ahmed and Ahmed, 2018). Development of the services is utilised to expand the business proposed to the present customers with the motive of raising their turnover.

This service is going to be obtained by the development of additional services and investment in research. Requirement of the ride in manufacturing the product of someone else and branding the purchased product and joint growth with ownership of other organizations are some of the products that can be obtained by the banking sector. Diversification of the bag is the main growth strategy which is considered the riskiest strategy (Geissdoerfer et al. 2018). The diversification strategy of the Bank of London comprises the organisation of fully new services on a completely unknown market. Horizontal diversification, vertical diversification, conglomerate diversification and concentric diversification are some of the classifications of the diversification strategy that is used in growth and development. Bank of London utilizes the horizontal diversification strategy for a new launch of bank services and products in the UK.

Anticipated Income theory: The approach of anticipated income theory has been developed by H.V Prochnow based on the extension of the loans term practices by the US commercial banks. The theory illustrates that the bank has the strategy of monetizing the longest term loan from the calculated income of the borrower irrespective of the nature and features of the business. Bank of London has the unique strategy to use theory in the business regarding loan providing to the customer. As opined by Taiwo et al. (2017), the bank is going to put effort and a restriction on different activities of the finance of the borrower at the time of granting of the loan. This bank of the UK needs extreme security from the borrower regarding the loan with the estimated earnings while considering their needs and requirements. It is clearly stated by this approach that the loan that is given by the bank gets repaid by the remuneration of the future that is obtained in the time of the instrument.

The borrower obtains the opportunity of giving the payments of the loan in monthly instalments rather than giving a shoe amount of money at the tenure of maturity. The approach of this theory is five basic purposes of safety, liquidity and profitability (Phillips et al. 2019). In the Bank of London, liquidity is cleared up when the Vagabond saves the repairs regularly after a particular time in instalment.  The Bank of London utilizes the excess reserve in granting a loan for a long term which is broadly profitable above for the business community that accumulates the funds for medium terms.

Section 5: Summary

Based on the comprehension of the article, it can be concluded that “The Bank of London ” is going to successfully set up a new bank for the clearance purpose. It is stated from the overall article that the mean vision and aim of the banking company is to compete with their biggest competitors in the UK market that dominate the potential market of banking. The organisation claims to provide the customers unique traits of faster and safer transactions with the advancement of technology and the factor of digitalization in adapting to the competitive edge of the market. The bank of the UK offers the customer enhanced data protection from Cybercrimes in the settlement and clearing process. Analysis and VRIO analysis of the banking organisation highlight that this organisation causes the concept of finance and extremely innovative strategy for the growth in the market.

Bank of London Experienced different problems and challenges in the devaluation of currency and lack of expertise in the US market operation. The new setup of the business is the intense rivalries and competition in the potential market which is recognised as a major threat recognised in the study. In my observation, the banking organisation can be successful in the future as the transactions of Banking are getting broader with the evolution of generation. The company has an immense potential advantage in gaining the customer as they have internet penetration in the potential market of the UK which is extremely high. The study has evaluated the banking theories which have been demonstrated clearly and the corporate Strategy framework assists in analysing marketing strategy and growth and development of the organisation.

References

Bankofengland.co.uk, 2021, About Us, Available from: https://www.bankofengland.co.uk/ [Accessed on: 30^th November, 2021]

Ft.com, 2021, About Us, Available from; https://www.ft.com/ [Accessed on: 30^th November, 2021]

Zanjani, S., Iranzadeh, S., Khadivi, A. and Feghhi Farahmand, N., 2020. Designing a Corporate Growth Strategy Based on Ansoff Matrix Using a Fuzzy Inference System. Innovation Management in Defense Organizations, 3(2), pp.151-178.

Anh, D.B.H. and Tien, N.H., 2021. Using Hoffer matrix in strategic business analysis for Nguyen Hoang Group in Vietnam. International Journal Multidisciplinary Research and Growth Evaluation, 2(4), pp.61-66.

Rinataa, A. and Wicaksonob, A., 2020, August. ICMEM. In BOOK OF PROCEEDINGS (p. 864).

Ahmed, J.U. and Ahmed, A., 2018. Agrani Doer banking: Agent banking business in Bangladesh. Business Perspectives and Research, 6(2), pp.154-164.

Geissdoerfer, M., Vladimirova, D., Van Fossen, K. and Evans, S., 2018. Product, service, and business model innovation: A discussion. Procedia Manufacturing, 21, pp.165-172.

Taiwo, J.N., Ucheaga, E.G., Achugamonu, B.U., Adetiloye, K. and Okoye, O., 2017. Credit risk management: Implications on bank performance and lending growth. Saudi Journal of Business and Management Studies, 2, pp.584-590.

Phillips, J.P., Wilbanks, D.M., Rodriguez‐Salinas, D.F. and Doberneck, D.M., 2019. Speciality income and career decision making: a qualitative study of medical student perceptions. Medical education, 53(6), pp.593-604.

Griniece, E., Panori, A., Kakderi, C., Komninos, A. and Reid, A., 2017, August. Methodologies for Smart Specialisation Strategies: A view across the EU regions. In Proceedings of the 10th International Conference for Entrepreneurship, Innovation and Regional Development (ICEIRD 2017) (pp. 321-330).