Lloyds TSB is one of the UK financial services groups providing a high quality of banking and financial services in the UK and other continents. Lloyds TSB Group and their high position on the London Stock Exchange (FTSE 100), closed at the end of year 2007 with market capitalisation of £26.7 billion. Total income at the end of 31 December 2007 was £18 billion with profit before tax totalling £4 billion which is double compared to 2002. Those numbers clearly show the strong and still growing position of the company on the competitive market. Also a personal and corporate customer’s service has received strong support among investors for the strategy and fast- growing market’s opportunities (Lloyds TSB Group plc).
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Lloyds TSB has planned to become a top global bank with a strategic refresh of its Internet business, and mortgages, taking the best technology which the world has to offer to deliver improvement to their position on the market, customer satisfaction, and sales volumes. The bank has optimized decision making and cut their risk for the new investments to a minimum in new sectors but also shows that they understand the market (Lloyds TSB).
Introduction
A significant part of the discussion in this paper is based on the Lloyds TSB current corporate, operations and marketing management objectives and strategies. An organisation that wants to achieve success in the competitive business environment needs to build a good strategy (Porter, 1990). A good strategy is a challenge for many companies with development, innovation and improvement to provide business objectives. Banking markets can offer an opportunity to develop and achieve great results but also provides lots of risks and barriers (Dibb, 2007). Differences of cultures, currencies, rules and regulations can make the market conditions dissimilar but at the same time, if research will find all the diversity factors and build a good strategy, this approach can bring benefits to investors and companies like Lloyds TSB. Many businesses fail because they don’t have a clear strategy to go into the market. Previous papers briefly describe the relevant operations management theories and principles and then present the corporate strategy to achieve the company objectives in terms of operation and marketing contents.
This paper is structured as follows. The next section has been divided into five smaller sections in which each of them deeply explain the objectives and strategies of Lloyds TSB. Those sections highlight aspects and approaches which need to be taken into concern in professional management decisions if organisations want to improve in a financial service market.
Lloyds TSB
Every organisation attempting to accomplish has to ask and answer for questions like: What organisations want to achieve? Which way will be the best to go? What needs to change? What are our objectives? Any organisation needs to set up their objectives which are the essence of business. Those objectives need to be supported, have clear expectations and descriptions for future moves at all time if the company wants to achieve success.
2.1 Objectives
Corporate objectives are set up by the business targets for sale, growth, profit, how the company becomes more competitive on the market and returns on investments or other financial measures (Appendix 1). A high priority objective for Lloyds TSB is to provide successful changes into the business to be able to better understand customers needs, achieve well-defined performances measured by customer satisfaction. The main aim is to supply excellent service quality, delivery of products and improve the shareholder’s value and profit through dividends and share price appreciation.
Nowadays, it is important to identify numerous elements of functionality which can help evaluate Lloyd’s corporate objectives. High performance standards means being able to select the right market and customers then offer better product prices and improved service. Lloyd’s main problem in California was no competitive advantage and negligibility with giants like the Bank of America. They were struggling to meet their financial target because they believed that didn’t work hard enough to get people to change their beliefs. As Pitman said, only by creating changes and significant business plans, a company will achieve better effects (Lloyds TSB, p 664). The focus of the Lloyds TSB should be on moving above objectives into day by day different tasks, management habits and employee training sessions. Operations management is responsible for providing good services that a company sells in its markets and then measure how productivity and accurate the process has been improved. Management needs to oversee present and future tasks (inputs) which will add or change and achieve better results and satisfaction service in the end. A strategy which is a dimension to management’s responsibilities is based on control and development core tasks. Results (outputs) can be incredible as long as management make convince staff that changes are right (Appendix 1). In order to sustain or improve corporate prosperity it is important to achieve the level of effectiveness required to compete successfully in the market environment. California (Lloyds TSB, p 664) was not the best market goal for Lloyds TSB because they struggle to provide distribution channels and delivery to customers, more lucrative mortgages, insurance and investment options compared to other competitors. Also customers’ relationship was not that strong enough to trust the Lloyds TSB which means that not only businesses but also social changes were needed. Understanding market, translate into strategic task, research; development strategy and implementation are the core steps of corporate objectives which management should take into concern in their decisions. Hayes and Wheelwright construed a four- stage model of operation contributions (Slack, 2007, p. 38) which are examples of how to increase operations capabilities and create a strategic impact of the company which could be one of the options for Lloyds TSB in California (Appendix 2). The dimensions were too big to meet targets on this market by the Lloyds TSB. Companies create objectives which will qualify and quantify internal sources at all times to stay on customer’s shortlists and complete objectives over the standard required.
2.2 Strategy
Strategy marketing plan can be defined as “a systematic process of assessing marketing opportunities and resources, determining marketing objectives and developing a thorough plan for implementation and control”. (Pettigrew, Thomas and Whittington, 2002, p.6).
Robert (1993) claims that decisions about which products and services to offer, the customers to be served, the market segments in which to operate, and the geographic areas of operations should be made on the basis of a single “driving force”. He claims that several possible driving forces exist but only one can be the basis for strategy. There are 10 driving forces (Appendix 3). Lloyds TSB is an excellent example of a company which should provide those dimension- forces in their strategy and objectives. Each business has their own dimensions which explain how a product or service will be provided. A strategy develops existing service and products, tries to find ways how the service will get into the marketplace and customer’s shortlists to complete business financial targets in the competitive markets. Each future step should be well- organised and researched to ensure that the transfer of new technology and knowledge into the service and products will work in Lloyds TSB’s future development objectives. Companies need to create bank’s conditions, attitudes and expectations in order to get above objectives and organisation profits. It means that Lloyds TSB needs to provide a huge amount of changes in the services industry. The business competition is focused more on the UK financial services market (Lloyds TSB, p 665) and is facing up to the improvement of strategies to achieve increasing success and price controls.
Corporate strategy.
Corporate strategy refers to decisions of which services and products to enter, what the Lloyds TSB should specifically direct attention for and what corporate issues can add to the design and delivery of the businesses potential products and services to become more competitive (Hill, 2005).
Market is a huge opportunity for many banking services like Lloyds TSB and is based on marketing and corporate operations which are the basic activity within organisations but also strong power with formulating strategies. Offering good products and services at the right price are backed by a relentless pursuit and accessibility for customers (Krishnan, Rishikesha, T., 2005) Lloyds corporate strategy issues are based on a range of services given to customers by complementary organization’s strategy decision that are raised above the market share, customer and shareholders satisfaction. Lloyds TSB introduced a number of new products and services like: credit cards, insurances, mortgages, a Lloyds TSB branded gas, electricity and home telephone products.
Those products developed and introduced better relationships between cost and quality and value (Lloyds TSB, p 667). Priorities in terms of sales, growth minimize the impact of underperformers (which has happened in California) are invested into resources which will guarantee Lloyds TSB a profitable future (Lloyds TSB, p 665). Nowadays, there is importance to rapidly improve technology and changes inside of organizations as part of corporate strategies which have the link with marketing and operations strategies. Lloyds TSB new products which proved so successful “product/service life cycle” (Appendix 4) on the UK market built their trust in their own brand name and existing relationship with customers. The speed of the Lloyd’s products introduction and evaluation increased because they sold their products through the Lloyds networks which make Lloyds more adaptable, relatively flexible and competitive on the market. That strategy worked well for Lloyds TSB success because the company doubled their profits and built significant markets across the UK (Lloyds TSB, p 665, p. 669).
2.2.3 Operations strategy.
Operation strategy is defined as, a main organizational action which helps to survive and prosper within its environment over the long-term by business (Hill, 2005). Decisions and strategy which have been taken to achieve corporate objectives have a direct impact on the basis on which an organization is able to do but at the same time secure competitive advantages. Slack (2004) argues that there are five operations performance objectives like: cost, quality, speed, flexibility and dependability (Appendix 5) which provide and develop operation strategy and business performance on the market.
Lloyds TSB operation strategy means selecting the right markets and then designing their structure of the service based on the customer research to be better delivered and developed, These are important decisions about resources and capabilities of Lloyds TSB determining their potential future output. Pitman’s team was able to undertake whole analysis to choose a profitable market and slowly improve changes which were needed inside of the organisation (Lloyds TSB). The planning and controlling operations of the Lloyds TSB provided the new delivery system; developed new areas such as call centres, internet banking, card services, insurances and more cash machines across the UK. Also, Cheltenham & Gloucester are a bank that has other branches in a few countries and have options which show that quality and flexibility of the service is a huge challenge for the Lloyds TSB (Lloyds TSB, p 667-668). Those resources are increasingly important and significant to allocate Lloyds capital in the most profitable environments for the organisation.
They are looking in their operation strategies of organisation structures where individuals’ beliefs each employee and their knowledge, commitment to the service are the key issue in management’s strategy. Pitman reflects, that staff need to understand, accept and stay closer with the company to improve existing and added services (Lloyds TSB, p 666). Learning and training processes which are the Lloyds TSB objectives become more realistic and attractive for employees and businesses which want to improve in the future. Globally increasing numbers of banks put pressure on everything that Lloyds TSB is doing to be more challenging to ensure that their costs are managed effectively whilst also enabling to invest in the business to drive further growth and customer trust.
2.2.4 Marketing strategy.
One of the main objectives of any organisation is to reach a position where they are able to attract more customers than other competitors (Porter, 1990). A competitive advantage which focuses on operation and corporate strategies are keys to being able to identify the firm’s marketing goals, and show how they will be achieved by taking into concern a stated timeframe. Marketing strategy explains the organisation’s fundamental targets and tactics to designed organisation positions in the way where they are able to fill their market needs and reach marketing objectives (Porter, 1990). Making whole Lloyds banking sector with new services a great place for their customers around the world is Lloyds TSB number one priority. During the financial crunch, the Lloyds TSB has recently adopted a competitive pricing strategy, offering high interest rates and attractive offshore banking services for those willing to open a new account with them. They believe that the new range of products and their customisation are a worthwhile opportunity (Lloyds TSB, p. 667- 668). Also they chose high levels of innovation to improve ability and delivery faster customers’ needs to clients by using a customer’s research and the new technique of training their staff.
Brian Pitman (the CEO at the time) of Lloyds TSB Bank showed that they should be able to respond quicker and more appropriately to marketing trends and consumer lifestyle changes, ultimately bringing the Lloyds TSB closer to customers. Growth sales are the main challenge in marketing and operations strategies (Lloyds TSB). These new technologies and valuable products will give access to information trends across the banking sector to achieve future stronger credit risk management and growing Lloyds TSB sales revenues. They declared to deliver a more ‘personal and modern’ banking service to develop a new visual identity for their brand repositioning and to come up with awe inspiring creative expressions as results of customer research (Lloyds TSB Group plc).
Lloyds TSB is a player in the financial services industry and has demonstrated its commitment to marketing decisions to concentrate on the UK financial market which is the most significant part of their future goals. Lloyds TSB has won the trust of customers in the last few years because of their development solutions and standardisations of the products (Bretherton, 2004).
Conclusion
This paper explains objectives and strategies through which the Lloyds TSB can be understood from different perspectives. Those objectives and strategies not only brings images of how a banking sector should prosper but also helps better understand how important each of those approaches is for financial organisations. Lloyds as an international business and multinational management company needs to learn how to recognize the profitable investment in their development brand and approaches to be able to develop strategies, maximalist customer satisfaction to improve business and employees performance (Everett, 2009). Managers need to understand that a strategy can improve organizational productivity and creativity.
This paper has highlighted Lloyds TSB’s efforts on different levels and explains the companies’ main corporate, operations and marketing strategies.
The paper has also argued that organisations still have to change in their structures, strategy and management knowledge about new product and services. Improvement and understanding is needed to become better employers, managers or leaders of financial sectors like Lloyds TSB.
The implications of the paper is that Lloyds TSB needs to do more than just manage people and find new markets and changes, they have to take into account the above objectives and strategies buy also try to “do the right things” (Druckers, 2001) because managing people and business is a challenge but also a compromise.
Recommendations
Nowadays, there is many sectors whose have many different problems. Banks struggle with their financial problems, unqualified employees or unsatisfied customer service. The new Lloyds TSB brand strategy with specific guidance on the brand expression and a set of practical production rules also has some problems. Lloyds has few problems with customer service and their respondent to clients’ needs. The Independent (2001) showed how above Lloyds TSB objectives met problems in real life. While other banks have their problems, especially with call centres, Lloyds TSB is bearing the brunt of current criticism. Statement problems, unavailable information for customers or old style management called no respect to that brand. Lloyds needs to make sure that problems like that won’t be happen in future because the market and customers should get the highest level of satisfaction. Lloyds TSB be able to help to raise their profit and position in their own communities, and to achieve local’s people and businesses supports.
Furthermore, if Lloyds TSB is going to leave those problems without any respond, they will meet lots of problems and on the end will lose their competitive position in the financial sector. Above objectives and strategies should be good examples in terms of above criticism to implement and improve Lloyds TSB banking branch.
Appendix
Appendix 1
CORPORATE OBJECTIVES
Directional objectives
Market leadership
Market spread
Customer services
Performance objectives
Growth
Profitability
Internal objectives
Efficiency
Personnel
External Objectives
Social responsibility
Appendix 2
Figure 2 – The four-stage model of operations contribution (Source: Slack et al., 2007 p. 38).
Appendix 3
Product-service
Sales-marketing method
User-customer
Distribution method
Market type
Natural resources
Production capacity-capability
Size/growth
Technology
Return/profit
Appendix 4
Figure – The product/ service life cycle (Source: Reynolds, W., Savage, W., Williams, A., Your Own Business, 2nd edn, ITP Nelson, Melboume, 2000, p. 318).
Appendix 5
Cost: The ability to produce at low cost.
Quality: The ability to produce in accordance with specification and without error.
Speed: The ability to do things quickly in response to customer demands and thereby offer short lead times between when a customer orders a product or service and when they receive it.
Dependability: The ability to deliver products and services in accordance with promises made to customers (e.g. in a quotation or other published information).
Flexibility: The ability to change operations. Flexibility can comprise up to four aspects:
i. The ability to change the volume of production.
ii. The ability to change the time taken to produce.
iii. The ability to change the mix of different products or services produced.
iv. The ability to innovate and introduce new products and services.
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