Situation analysis and market plan for a UK bank

Situation analysis and market plan for a UK bank In UK I am working in a Harvest bank and I have to prepare a business plan for a bank in the situation when there was global recession in the country and now banking industry is coming out of recession. There are a lot of opportunities in the current market because new businesses are growing, new migrants are coming in the country specially students, many Europeans are also coming because of the recovery toward stability in the country. In this situation many sole proprietors and partnerships are taking place many people want to start business. There is an opportunity for banks so our bank can take benefits from this situation by launching an online bank because of the intervention of technology in banks which are reducing the costs, giving competition and tough time to every business so a banks. UK market analysis In a report from Office of National Statistic in opinion survey in August 2010 it was stated that about 30.1 million of adults uses the internet every day which is approximately 60% of the total population. The number of persons who never used the internet is decreasing day by day in every year about 9-10 million user adds in previous years. The number of person who bought the goods or services from online source was about 31 million in last year. This figure represent about 62% of all person who are above the age of 16, mostly people purchased sports and clothes from online. There was about 73% internet connection in houses for total house holds which is almost 19.2 millions houses. People use more internet connection in London than outer / other part of the London. Large numbers of people especially teenagers use internet for social networking websites like Facebook, twitter, Bebo, Twitter, Yahoo, Hotmail and others. So UK market is use to of the internet so they can also use internet online bank account because of the shortage of time, 24 Hrs banking, and all banking facilities through online. You can do online purchasing and check the banking transactions simultaneously. Time saving is a key factor for these types of banks and banking transactions, bank can reduce cost for its operations. They can give competitive edge in facilities as compare to there rivals and create a bench mark in the banking industry. Product and Technology Analysis In product and technology analysis, our Harvest bank is introducing manly two product in the UK market which are online direct deposit product and online residential mortgagees lending product which are very easy for Harvest bank to manage. These are the introductory products besides these we will launch other more products completion of the introductory phase of the above mention products. Customers want to get more and more facilities from new companies at a competitive price as well as new products with innovative features. From technological perspective in UK, it is well establish and there is well develop infrastructure which is capable of handling these types of business products. As we mentioned above that the technology is very cheap in the country, telecommunication sector is developed which is the basis of online banking because bank has to provide online and telephoning banking facilities so it is good for the new harvest online bank. The technology and telecommunication sectors are interlinked with each other in UK both sectors are well equipped and have a good technological infrastructure. Environmental Analysis In environmental analysis we will analyse both internal and external environmental analysis of the bank. by doing this we will be know that what strategies we will be need to achieve our objective / goal in the banking industry because of the competition in the banking sector. External Analysis In external analysis we our bank will look on the broader prospect and external environment out side the organization which will be helpful for our bank for making strategies efficiently and effectively. Political The political situation of the UK is stable, country is coming out of recession, govt and investors are investing in the country especially in stock market and financial market. FSA ( Financial Services Authority ) is making new policies for money laundering activities, customers satisfaction, quality services from banks, banking industry growth, and safe guard of depositors interest and the money. Soon when BASEL III will launch than there will be more regulatory policies for banking industry so it is better to launch bank now because the conditions and circumstances are good for launching a bank in UK now a days. Social, Demographic Cultural Social and Culture of the UK is mix people belong to different demographic sectors so there cannot be a universal rule or policies for the customer. We should be aware of the fact and formulate those policies which are beneficial for all public at large, which cover all the sector of the society. There is about 61 million population of the country, both male and female work together with about 55 and 45 respectively. There are equal opportunities of employment for every one. Every one is independent in this country so there are more opportunities for opening a bank account because people use to surf internet every day about 60% of the adults use internet every day which is lot so people will like to use online baking facility. Now days almost every one has mobile internet facility or smart phones which can enable customers to check web sites and internet on their phones which is good banks and customers. Economic The Economic situation of the country is making progress because of the fiscal and monetary policies of the country. Although the county was in the bad recession period of the time but now it is progressing toward recovery which is good for the country, banking industry is playing very important role in it by investing the economy which is the need of the time. In UK there is more import than export so there is deficit in balance of payment which is negative for the country. Although county more export is services, technology, machinery and innovation, but is not enough for the country because there is less productivity or industrialization in the country. Technological The technology of the UK is advance which is helpful for launching our online bank and its products. There is modern telecommunication system in the country which is wireless and fibre optic cables system. In banking industry there is IBAN and SWIFT code system exist which is very helpful for international banking. The infrastructures of ATMs exist in whole country which allow customer to withdraw their money at any time for their convenience, now in most of the banks there are ATMs machine which allow customers to deposit money in machine instead at the counter. Modern infrastructure of internet is very advance in the country which is top most requirement of the online banking. Market UK market consists of Govt. Semi govt. Public, private, corporate, insurance companies, teachers, students, self employed, job seekers and national residents. By the law of the country it is required by the companies, govt. Corporate entities, partnership firms and sole proprietors to have a bank account and do business transactions through banking channel, because they have to show in their business transaction for VAT, income tax return and companies house return that their business transactions are through banking channels. Thus online baking service will provide them a better and clear cut picture of business transaction and their needs. For employees they can get salary direct to their account which they can use for their needs. They have 24 hour access to their account transactions, any one can do banking at any time they dont have to wait for the opening hours of bank. Competition The UK market is well educated because more people are educated. The people already have a knowledge of online banking because there are different competitor in the market, main competitors are ING Direct, Metro and HSBC Direct other are Lloyds, Barclay, Natwest, Hlifax, Santander etc. Now in UK almost every bank is providing online banking facility but they have speciality in different fields but the ING Direct and Metro are main bank who are primarily in online banking. Metro was lunched just recently about one year ago and it is doing well so metro bank is our main competitor in online banking with recent launch, we should be aware of it. Besides these competitors there are many other competitors in the market like credit card companies and insurance companies. All of these companies are accepting deposits and providing traditional banking facilities like virgin group of companies it comes in insurance, banking and credit card. There are many other companies which are providing services which banks provide so there is more tough competition in the banking industry. Swot Analysis For SWOT analysis we have to look at the company internal and external environmental factors. In internal environmental factors we have to look at the bank from inside perspective i.e. management, organization it self, its policies / Strategies, human resource, bank infrastructure and customer satisfactions. Strengths Our Harvest bank already exists in the banking industry so it is our strength that our brand name exists in the industry customer and general public know our bank. There are a lot of customers in our existing bank which are helpful for our new banking product which will suit our existing and new customers. Our organizational structure is flat which is very helpful in decision making and efficiency of the organization. Most of our bank staff is young and energetic, they have the require capabilities and training for new technology and system which is progress, all staff is fully motivated. We have local staff in every city and town, who can attract the local customers. We have the best technological infrastructure for online banking requirement. Safety and security of the banking software is very high because they have the strategic alliance which top software manufacturing company of the company. Weaknesses Our staff is young they dont have much exposure of the competitor, customers and banking which can lead to poor performance and effect our reputation and high standard of service. We have a lot of competitors which are international and bigger than us, they have research department and more qualifies staff who can deal with legal, operational, technological and other changes. Our competitors have more correspondent banking relationship for foreign exchange business, we are not familiar with this so it will be difficult for us in this tough competition. Opportunities Harvest bank is well known in the eye of customers, govt. public and private sector so our products of online deposits and online mortgages will be easily taken by the customers. Country is coming out of recession, customers have not sufficient fund for deposits but we can take money from international financial market and invest in online mortgages services. In recession property prices went down now people are again investing in houses for save and secure investment purpose. It is good time for us to invest in mortgages for the persons who have less money for house by providing them competitive rate on property mortgages at the basis of credit rating / score of customer. Govt is encouraging house holder to remain in their property and providing them financial sport for mortgage instalment, it is save and secure investment. The competitive rates and pricing of the products provide us better image in the eye of the customers and we can attract customers. There is more scope for our bank to advertise through electronic media and create awareness of our product and services to attract customers. The tourism industry of Europe and UK is increasing alot of students, investors and migrants are coming which could be prospective clients for our bank for money depositing. In upcoming years there is more advance technology in banking when there will be no paper money and all the transaction will be through banking / online, we should be prepare for it. Threats Some clients still want to do business with our competitors Source: Office of National Statistic Opinions Survey Statistical Bulletin: Internet Access 2010 www.statistics.gov.uk/pdfdir/iahi0810.pdf http://www.statistics.gov.uk/cci/nugget.asp?id=8