Table of Contents
Task 1: Lloyds Group’ competitiveness in the global financial services industry.
Porter Five Forces Analysis on Lloyds Group.
Competitive rivalry within the industry.
The threat of substitute products.
Threats of new entrants.
Customers bargaining power
Suppliers bargaining power
Task 2: Strategic alliances and M&As in the context of Lloyds Group.
Strategic alliances in Lloyds Group.
Merger and Acquisition in Lloyds Group.
Task 3: Corporate governance, CSR, leadership and competitiveness of Lloyds Group.
Task 4: Personal reflections on learning.
This essay focus on four particular issues. Firstly, the essay analyses the competitiveness of Lloyds Group in the global financial services industry. Secondly, the essay will evaluate the terms ‘Strategic Alliance’ and ‘Merger and Acquisition’ in the context of Lloyds Group. Thirdly, the essays discuss how Lloyds Group is working with its corporate governance, CSR, leadership and competitiveness. Finally, the essay outlines a reflective summary of what the assessor of this essay has learnt from this module.
Task 1: Lloyds Group’ competitiveness in the global financial services industry
Lloyds Group is one of the leading financial service companies in the UK. It is providing a variety of financial and banking services to both corporate and personal consumers. It severs more than 30 million consumers every year with around 110,000 dedicated and devoted staffs. Lloyds Group offers its services through different reputed brands including Lloyds Bank, Halifax Bank, TSB Bank, Scottish Widows, and Bank of Scotland. Lloyds Group is successfully growing up slowly and steadily with making differences for the consumers, communities and even for its employees. It has increased its revenue and profit mainly for the last few years. However, it is facing challenges in the present global financial service industry in gaining sustainable competitive advantages (Lloyds Bank Group, 2014).
Porter Five Forces Analysis on Lloyds Group
According to Kotler et al. (2014), Porter Five Forces Model is widely applied for analysing competitive positions of any global corporations. The five forces in this model are customer bargaining power, supplier bargain power, competitive rivalry, threats of substitutes, threats of new entrants. This model is especially applied to analyse the business external environments and challenge come from competitive marketplaces. Hence, the limitations of this model are it cannot analyse any internal issues of a business. This model is applied to Lloyds Group as follows:
Competitive rivalry within the industry
Lloyds Group facing challenges from aggressive competitors. In the case of the retail banking market, Lloyds Group is competing with several building societies and banks, many internet-only providers as well as major retailers. In terms of the mortgage market, the key competitors of Lloyds Group are building societies, traditional banks, as well as specialist mortgage providers. In the wholesale banking markets, Lloyds Group is competing with both domestic (UK) and international financial institutions including life assurance companies, bancassurance companies, and general insurance companies (LBG, 2014).
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Lloyds Group is also operating in world financial services, where it is experiencing consolidation at both national and international levels. For example, European consolidation along with considerable consolidation has been observing within the US in the last few years (Lloyds Annual Report, 2014). The above discussion proves that Lloyds Group is facing great challenges from competitive marketplaces and rivalries. Consequently, it is facing difficulties in gaining sustainable competitive advantages within the industry.
The threat of substitute products
Globalisation and rapid advancement in technological development are changing customer buying behaviours frequently. Thus, it has been challenging to understand and meet the customer changing needs, expectations and demand (Lloyds Group, 2014). On the other hand, these globalisation and technological development are providing opportunities to competitors to introduce new services or substitutes in the competitive markets. For example, Barclays provides more unique and advanced unique services than Lloyds Group attracting the target and potential consumers. Therefore, Lloyds Group’s profit margin is under pressure with a number of products that are being increasingly commoditised. The wholesale markets of Lloyds Group are rapidly integrating into the EU than their retail counterparts (Lloyds, 2015). This is leading to the more liquid, deep and corporate securities market and slower disintermediation of conventional lending.
Threats of new entrants
However, Lloyds Group wants to compete in the industry focusing on services (mainly core banking services), building relationship with consumers, and prices. In addition, it has significant strengths in a number of factors including strong brand image and goodwill, improved market share in both corporate and retail sectors, both personal and business banking, multi-channel distribution capabilities, as well as knowledge and understanding of the needs and expectations of its present, target and potential customers (LBG, 2014). In addition, a wide range of aggressive competitors with well brand images is competing within the industry. Consequently, it is quite difficult for the new entrant to introduce in the market and survive in the competitive marketplaces.
However, in the distribution of investment products, life insurance and pensions, Lloyds Group is facing increased challenges from new entrants including primarily in specialist areas, and traditional retailers. In addition, changes in investment products, life insurances and pensions promote favour distributors such as bank rather than product providers (Lloyds, 2015). In the general insurance sector, Lloyds Group sees significant consolidation but fragmentation in distributions, which motivates the new entrants in the market including both direct operators and global insurers. In the case of corporate and commercial financial market profit is comparability better than the retail market. Nevertheless, traditional forms of banking are nowadays facing increasing from online market-based products (LBG, 2014). As a result, new entrants are getting opportunities to introduce their services through online and attract target and potential customers from competitors……………