Background

Lloyds TSB bank PLC is among the leading global financial service providers. It was established in 1995 as a result of a merger between Lloyds bank of Birmingham and TSB group. The company’s headquarters are in United Kingdom and the bank has numerous branches and ATM outlets all over England and wales. The company offers variety of services which include personal banking, business banking, private banking, commercial banking and international banking. Lloyds TSB has extended its services to Scotland where Lloyds TSB Scotland PLC is situated(Lloyds, 2013).

The company has completed several acquisition programs such as the acquiring of HBOS in January 2009. Such acquisition has resulted to the company changing its name to Lloyds banking group. This has resulted to massive growth of the company in terms of assets and markets share. The company later ventured in provision of other services such as insurance and life assurance.

Lloyds TSB Plc. is also believed to have other fully owned subsidiaries such as Lloyds TSB Scotland and the Cheltenham & Gloucester. This has enabled the group to be able to provide wide range of financial products. The bank has been rated as one of the leading suppliers of long term savings and protection products in United Kingdom.  Lloyd’s banking Group has about 70,000 employees and serves around 16 million customers in UK. The company is regulated by financial services authority(McDonald & Meldrum, 2007). It is also a renowned member of the financial services compensation schemes, British bankers association and association for payment and clearing services. This has given the consumers a lot of confidence in the services offered by the organization.

Company’s history

The history of Lloyds TSB Plc. began in 1765. This is the year when Taylors and Lloyds were founded in the Birmingham city. It started as a retail private bank offering financial services to the locals. The private company was later converted to a joint stock company in 1865. The company later changed to Lloyds limited company in 1889. Over the years, the company has strived to earn a leading position in the financial sector (Lloyds, 2013).

In the process of the company growth, the company acquired Cheltenham and Gloucester Building society. Trustee Saving Bank (TSB), which was founded by Revd in 1810, is also a core part of the company.TSB group was later incorporated under the companies Act OF 1985. The company grew to the modern bank status from 1984 under the leadership of Sir Brian Pitman. This was achieved through narrowing the banks business focus. The company laid its focus increasing its growth through mergers with other UK banks. Pitman tried several mergers even though most of them failed. Some of the most notable ones included failed acquisition of royal bank of Scotland in 1984, standard chartered bank in 1985, midland bank and Abbey National in 2001. The merging route of this company was concluded in merging of the Lloyds and the TSB group in 1995. The Cheltenham &Gloucester building society was also a fully owned operative of the banking group. The trading process of Lloyds TSB officially commenced in 1998 after completion of the integration process.

The company offers a wide range of products both in England and wales. The bank owns several subsidiaries in Scotland where there are three branches. The three Scottish branches were later absorbed into TSB Scotland and remained separate to the Wales and England branches. The company later acquired the demutualized Scottish Widows Fund and Life Assurance Society.

Lloyds TSB Mission Statement

A mission statement is a very important aspect in an organization. It is a statement that outlines the sole purpose and objective of the organization and reasons for its existence. A good mission statement should clearly outline the road map to achieving organizational goals. The objectives of the organization should be clearly outlined, the path to success and a guide to strategic decision making should also be provided.  The mission statement is aimed to provide the framework or the context within which organizational goals will be achieved.

In most cases, the framework to achieving the organizations goals is achieved through combination of good vision and mission statements. For instance, Lloyds TSB mission is to be the best financial service company.  The company aims at providing excellent services to its clients first in UK and then in other global markets. It is also the company’s mission to provide the best working place for its employees. The company also wishes to be the best destination for the customers through excellent services and provide the shareholders bets returns for their money(Lloyds, 2013).

After the launching of Lloyds Group in 2009, new set of vision and values were established to serve as road map to the success of the organization. The new set of vision and mission statements have led to a great improvement in the company’s operating environment. Quality and excellent services provided by the group of banks have established the bank as the best bank for the customers. It has also been the company’s prerogative to be transparent and deliver as expected by all its stakeholders(Doole& Lowe, 2008).

In order to achieve this, numerous researches have been conducted which has resulted in adopting of new core values. These core values include; putting customers first, keeping it simple and making a difference together. The values have been critical in achieving the mission and vision of the organization. It has also been the company’s desire to maintain a healthy relationship with clients, staff and other stakeholders.

Market conditions and competitive environment of Lloyds TSB

The financial sector within which Lloyds TSB PLC operates has been a very dynamic sector for a long time now.  The main competitors in this industry include HSBC, Barclays and the Royal Bank of Scotland. It is the obligation of the organizations management to come up with strategic moves to have a competitive edge. Lloyds Group has for several years maintained a healthy competition with these world financial giants through proper strategic decisions. The company has remained relevant in the financial industry thus enabling it to maintain a steady growth both in terms of assets and profitability. The company’s market share has also increased significantly through penetration to other markets outside UK.

Porter’s five forces analysis

Porter’s five forces is a powerful marketing tool that helps an organization determine its competitiveness in an industry. It helps in understanding the current competitive position and the strength of the intended position in the organization (McDonald & Meldrum, 2007). It helps the management in reducing the possible weaknesses and take advantage of the strengths that the organization has to gain a competitive edge. The analysis helps in understanding the overall profitability within the organization. The porters five analysis is composed of three external forces and two internal forces that determine the general attractiveness of the industry. The analysis involves the five aspects outlined below;

Threat of potential entrants

The possibility of new entrants in an industry is at times a very risky situation to the profitability of the firms in the industry. This is because the increase in the number of service/product providers will result to a decrease in the profits among the competitors. This is because they will have to share the available clients (McDonald & Meldrum, 2007). The threat of entry of new banks is very low at this time. This is because of the current economic meltdown thus only a few financial institutions would afford fresh capital expenditure to enter in the market. This has greatly served to the best interest of Lloyds Group.

Power of suppliers

The bargaining power of the suppliers plays a critical role in the profitability of the organization. An organization should strive to serve ina market whereby the bargaining power of the suppliers has little impact on the general profitability of the organization. The bargaining power of several banks in UK has made the banks to suffer immense losses. This has happened as a result of the subprime crisis and the continuing economic meltdown. The increase in asset swapping and asset protection by the UK government has also increased the bargaining power of the suppliers. To mitigate this problem, Lloyds Group has resulted into a price discrimination mechanism.

Bargaining power of buyers

Every organization should strive to ensure that consumers bargaining power is reduced to manageable levels. This in most cases is achieved through enhancing consumer loyalty.  At this point in time, banks are not in a strong financial position due to the economic conditions currently being experienced. As a result, banking institutions should strive to hold unto the existing customers and try to reach to new more customers.

Threat of substitutes

Another strategic move that the organization ought to make is to counter the new products offered by the competitors. In order to realize this, it is essential for the company to work hard and provide all the necessary services to the customers. For instance, Lloyds Group strategy focuses on providing services in four fronts which include; commercial banking, private banking, retail banking and global marketing and markets. This has put the company in a pole position as it offers a wide range of services that meets customers demand. This has to a great extent tried to match the services provided by other competing firms (Doole& Lowe, 2008).

Competitive rivalry

There has been an intensive rivalry in UK by major financial service provider. The stiffest competition has been from Barclays, Citi group, HSBC and Royal bank Scotland. However it is essential to note that only Lloyds bank which escaped the subprime crisis in a strong financial position. This is a clear indication that the bank has remained competitive in the industry.

SWOT analysis

SWOT analysis is another critical tool that helps assess the competitive nature. It involves critical analysis of both internal and external environment that affects the performance of the business. SWOT analysis help determine the company’s strengths, weaknesses, opportunities and threats posed by the micro and macro factors. After the analysis, strategic measures that maximize on strengths and opportunities should be implemented. Mitigating factors o weaknesses and threats should be put in place.

Strengths

• The bank is the 4th largest retail bank in UK.
• Has a strong network of branches believed to be over 2300
• Enjoys brand loyalty.

Weaknesses

• Internet banking has resulted to serious security concerns
• Inflation and change in base rate has led to great fluctuations in interest rates.

Opportunities

• Possible increase in number of online customers
• Increase in brand recognition
• Possible expansion in market share through venturing in other potential markets.

Threats

• Slow growth in the banking sector.
• Increase in competition with likely entry of Sainsbury’s supermarket, marks & spencer and Tesco supermarkets.

Lloyds TSB marketingstrategy

Major organizations in the world are striving to lay out strategies that will help increase the company’s profitability. One of the most adopted strategies in major global organizations is the internationalization strategy.  This is a plan that provides guidance on how commercial transactions will take place between entities located in different states.  Internationalization strategy leads to opening up of more new markets. The internationalization strategy is governed by three vital philosophies that include; industry based, resource based and the institution based philosophy. The internationalization process in the Lloyds STB Bank has been industry-based where it has engaged with other financial providing services(Doole& Lowe, 2008).

The company has also invested heavily in developing of new markets and provision of new services and products. The newly adopted marketing strategy can be better explained through Ansoff matrix.  This is a marketing tool linking the organizations marketing strategy with the general strategic decisions of the organization. The Ansoff matrix is based on four alternative growth strategies that include; market penetration, market development, product development and diversification. These four marketing strategies can enable a firm to have a competitive edge over its competitors.

By market penetration, Lloyds has tirelessly strived to ensure that the existing products are available to the selected market. This has enabled the company to effectively provide critical services to both the urban and rural population. Lloyds group, as outlined by the mission statement also aims at expanding its market beyond England and wales. This is evidenced by offering its services to other states suchas Scotland. Through such activities, market development is achieved (McDonald & Meldrum, 2007).

Lloyds are also in endless efforts of developing new products. The company initially started offering retail banking. However, with time more products and services have been ventured in the market. For instance, the company has provided mortgages, insurance and assurance services to add to the banking sector. The increased diversification has enabled the company to improve its marketing strategy which has helped it in achieving a competitive edge.

In implementing a successful Ansoff matrix it is always important to consider the risks involved. For instance, it is vital to consider the risk associated with staying with the existing product in the existing market. The possible risks in venturing in new markets and new products should also be greatly considered. For instance, the Lloyds group has been very selective in venturing in new markets due to the current economic downturns. There are also other possible risks such as rules and regulations governing financial sectors and the different economic conditions in different markets.

Market forces affecting Lloyds TSB banks

There are different types of market forces that determine the intensity of competition in an industry. Industry composition plays a significant role in determining profitability and consequent competitiveness in the market. The quality of products and services offered is also greatly determined by the composition of the industry. For instance, in a monopoly market structure, there is less competition which consequently translates to low quality products and services. This is completely opposite of the perfect competition market structure(Stackelberg, Bazin, Urch, & Hill, 2011)

Lloyds group operates in a monopolistic competition market structure. This is a market whereby there are many buyers and sellers of products and services. The services provided are almost identical and the little differentiation is basically on branding. The fierce competition among the service providers has resulted to the many firms to each getting a small market share. High competition level has led to improved services and high levels of innovation among the competitors. Customer satisfaction has also been accorded great attention.

References

An Analysis of Lloyds TSB’s Current Strategic Position (Part II) | MBA Term Papers. (n.d.). Custom Essays, Term Papers and Research Papers Writing Services. Retrieved April 16, 2013, from http://mbatermpapers.com/an-analysis-of-lloyds-tsbs-current-strategic-position-part-ii/

Doole, I., & Lowe, R., 2008. International marketing strategy: analysis, development and implementation. (5th ed.). London: Cengage Learning.

McDonald, M., & Meldrum, M., 2007. Marketing in a nutshell: key concepts for non-specialists. Oxford: Butterworth-Heinemann.

Plunkett, J. W., & Research, L., 2008. Plunkett’s investment & securities industry almanac. Houston, Tex.: Plunkett Research.

Stackelberg, H. v., Bazin, D., Urch, L., & Hill, R., 2011. Market structure and equilibrium. Berlin: Springer.

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