Strategic planning: A case study on Metro Bank

Introduction

Strategic planning of the organisations or the conglomerates is the important success factor where all the organisational management activities such as setting priorities and developing aim and objectives, managing the employees, strengthening the operational process, managing the energy resources and enhancing performnace are taken care of for meeting the vision and mission of the companies (Doz, 2017). Through strategic planning of the organisations, the companies try to develop effective planning for maintaining the operational activities so that it is easy to serve the customers with the best quality products and efficient services that will match the expectations and preferences of the customers (Wheelen et al., 2017). The aim of the report is to analyse the strategic planning and implementation of the banking organisation Metro Bank for developing in depth understanding about the ways to run the organisation in the UK financial industry though there are several issues in the financial sector in the country. The study also aims at analysing the strategic models which will provide a scope to evaluate the models in the basis of the strategic planning of the Metro Bank so that it is possible to acknowledge the strategic planning of the organisation to meet their strategic objectives.

Background of the organisation

Metro Bank Plc. is the retail bank who is efficient in running their operational activities in the UK financial sector and serving the customers with innovative products and banking services According to the needs and preferences of the consumers. The bank has been founded on the year of 2010 and now, total employees of the Metro Bank is more than 2850 who are proficient to run the operational activities and meet the strategic goal of the bank. The major products of the organisation are such as credit cards, consumer banking and corporate banking products which are also effective to meet the expectations of the customers which in turn provides an opportunity to the organisation to strengthen their customer’s base (Metro Bank Plc, 2018).

Figure 1: Official logo of the company

(Source: Metro Bank Plc, 2018)

Total revenue of the firm in the last year is approximately ₤295.8 million where the main focus of the company is to maximise the values for their customers by providing effective financial products and efficient services to the customers for maximising tehri satisfaction level.

Figure 2: Key milestone of Metro’s launch

(Source: CMA, 2015)

The company is successful in delivering quality product and services to the customers through which it becomes reputed financial company operating in the UK financial sector. the products and services of the company are such as,

1. Products:
   • Personal banking: Current account, saving accounts, mortgages and borrowings such as credit cards, personal loans and professionals loans
   • Business banking: Bank accounts, cash management services, commercial banking. SME financial service and deposited accounts
   • Others: Safe deposited boxes
2. Services:
   • Safety deposited vault
   • Instant account openings
   • Free coin counting
   • Open seven days a week for extended hours
   • Internal ATMs

Through the above-mentioned services and products, the company is successful in retaining the customers for their quality products in the UK financial sector and run the operational activities so that they can serve the customers in a better and unique way.

Strategic planning in financial industry and strategy of Metro Bank

Strategic planning in the financial sector is effective to analyse the internal and external environment of the bank and develop effective strategic planning to meet the strategic goals and objectives of the company. Through this study, it is posisbel to analyse the strategic models further on terms of evaluating the strategic planning of Metro Bank and in this context, strategic planning of the company can also be evaluated. The long-term value in the financial sector are such as maximisation of profitability, customer retention, investment through reducing cost, investing in innovation and creativity, sustainable growth, geographic footprint and managing the shareholders so that the banking institutions can operate efficiently in the financial sector. The strategic planning of the Metro Bank is such as product differentiation, expansion of the stores for improving physical availability of the products and services of the company as well as increasing brand visibility in the UK financial sector and apart from that, the other strategies are improving service quality, developing the customer centric business model and enhancing commitment towards the social communities as a whole (Metro Bank Plc, 2016).

Challenges in UK financial industry

There are several challenges in the UK financial sector for which the banking institutions sometimes fail to provide high quality products and efficient services to the customers. The first challenge is restoring public trust and improving customer service where the organisational fail to imporve their service due to inefficient workforce and lack of technological advancement which in turn raises the safety and security issues. The second challenge is data security and privacy where the customers do not feel free to inform the banking representatives about their personal information due to lack of security and accounting hacking (Ngo, and Nguyen, 2016). Crowed financial market and high competition in the financial sector in the UK are other challenges where the retail banks such as Metro Bank ail to gain high market share and competitive advantage in long run. New revenue opportunities and cybersecurity are other challenges for which it is very difficult for the Metro Bank to retain the customers across the UK for their effective financial products and proficient services.

Differentiating between wholesale and retail financial organisations and strategic implementation of Metro Bank

Retail banking is consumer oriented where the customers open new accounts, depot money and take loans from the banking institution such as Metro Bank. On the other hand, the wholesale banking is the commerce oriented where commercial and industrial loans are managed with purchase and non-deposited funds of the conglomerates. The retail banks take funds from the customers directly and invest in small business, but the wholesale banking takes funds from large business, MNCs and conglomerates and invest it on large business houses. Additionally, the services of retail banks are such as accepting deposits, maintaining savings of the customers, checking accounts, safety deposited facility and providing short term loans, but in the wholesale banking, the services are checking loan facilities for the conglomerates, maintaining the business accounts of the companies (Buil, Catalán and Martínez, 2016). As per the infrastructure and operational activities, the wholesale banks are maintaining global operations for managing the accounts of the business, but for the retail banks, it is easy to operate directly with the customers with proper cooperation and communication. Strategic implementation of the wholesale banking is a complex task as it manages a huge chain of banking service through different business firms. However, strategic implementation of the retail banking is easier as compared to wholesale banking where the representatives of the bank directly communicate with the customers and manager their accounts successfully (Bhat, and Darzi, 2016).

The Metro Bank as a retail banking institution tries to develop effective process for implementing the strategic planning through communicating the vision and mission of the institution with all the internal and external stakeholders including the employees, banking staff, managers, CEO, suppliers, distributors and government so that it is possible to execute the strategic planning efficiently. More investment on the research and development and technological upgradation with internet banking, developing company website, suitable mobile application is also effective way to implement the strategic planning of Metro Bank. Proper utilisation of financial resources and employee’s capabilities at the workplace, providing efficient service to the customers and communication for building strong relationship are also effective to implement the plan properly. The banking institution aims at implementation the strategy of process innovation, cost minimisation and product diversification through providing appropriate training and development to the employees and banking staff for enhancing their skill and abilities to serve the customers in a unique way through technological advancement. Implementing effective technology, data security, cloud computing, Information and Communication Technology (ICT), the Metro Bank is successful to implement the strategic planning and meet the customer’s expectations by providing 24*7 services, internet banking service, quality financial products and high return on investment to the customers through which the company can strengthen their customer’s base and gain competitive advantage in the retail banking sector across the UK (Metro Bank Plc, 2016).

Effectiveness of the strategic models

There are several strategic models through which it is possible to analyse the external and internal environment of the business as well as the strategic planning of the company through which the institutions try to meet their strategic objectives (Ethiraj, Gambardella and Helfat, 2018). The models are such as PESTLE analysis, Porter’s five forces, Porter’s generic strategies and Ansoff matrix (Renz, 2016). The strategic models are effective to analyse the business models and strategic planning as well as business environment of the Metro Bank.

1. PESTLE Analysis:

Table 1: PESTLE Analysis of Metro Bank

(Source: Created by Author)

2. Porter’s five forces:

Table 2: Porter’s five forces of Metro Bank

(Source: Created by Author)

3. Porter’s generic model:

Porter’s generic model is effective to identify the strategic planning of the company through which the institutions try to gain highly competitive advantage in the market. In the present case, the Metro Bank focuses on cost minimisation so that it is possible to create values for their customers.

Figure 3: Porter’s generic model

(Source: Castrogiovanni et al., 2016)

Cost focus strategy of the Metro Bank is effective to build string relationship with the customers and fulfil the aim of strengthening their customers base by ensuring high return on investment. This strategy is also effective for the banking institution to expand their services by attracting more investors in the bank and meet their expectations.

Figure 4: Porter’s generic model of Metro Bank

(Source: CMA, 2015)

Free cash withdrawals, credit card with 12 months interest free as well as long hours operations, personal relationship with the customers as well as 15% charge on current overdraft are effective to retain more long-term customers for the baking services of the Metro Bank.

4. Ansoff matrix:

Ansoff matrix is another strategic model through which it is posisbel to identify the strategic planning of the institution successfully by understanding product development, diversification and market development. Metro Bank in this regard focuses on market development and product and service diversification so that it is posisbel for the banking institution to serve the customers in a better way in the financial sector of the UK.

Figure 5: Ansoff matrix

(Source: Karadag, 2015)

The strategic planning of the Metro Bank is such as,

• Product differentiation:

  Product strategy is one of the best strategic planning of the company through which the organisation aims at retaining the customers and attracting more audiences in the financial sector in the UK. The above-mentioned product categories such as credit card, deposited accounts, Current account, saving accounts, mortgages and borrowings such as credit cards, personal loans and professionals loans, Bank accounts, cash management services, commercial banking. SME financial service are effective to maximise the satisfaction of the customers. product strategy in this regard is effective to manage the commitment to the customers and give them the best possible services, best saving and mortgage rates so that the customers will maximise their values by investing in the Metro Bank (CMA, 2015).

• Efficient service:

  The services of the organisation are such as Safety deposited vault, instant account openings, free coin counting, open seven days a week for extended hours which provide an opportunity to the Metro Bank to retain the customers and motivate them to make effective decision for deposit and investment. Licensing and legal rules are effective through which the bank aims at serving the customers over 100 years and apart from that, the bank improves personal service by opening their stores in 7 days a week from 8 am to 8 pm which helps the customers to access the banking service as per their convenient and preferences. Simple products and services and high return on investment are helpful to create values for the customers through which the bank is successful in fulfilling their commitment to the customers. Safe deposit boxes are effective to store different documents and files safely with security as well as protecting personal money through FSCS are other services through which Metro Bank can retain the customers successfully (CMA, 2015).

• Store expansion for market development:

  Store expansion is another strategy of the Metro Bank where the leader and the managers try to increase brand visibility in the UK financial sector as well as retain the customers for their quality banking services.

  Figure 6: Store expansion of Metro Bank

  

  (Source: CMA, 2015)

  Number of branches of the organisation is increasing year to year and it is predicted that, it will be increasing more for strengthening their operational activities across the UK financial sectors with subsequent rise in the number of accounts, customer retention and the amount of deposits. These strategic planning of store expansion is therefore another strategy of Metro Bank for running their operational activities sustainably.

• Committed to social communities for building string relationship:

  The Metro Bank provides 24*7 services to the customers and create values for them which is necessary for strengthening their customers base and meeting the commitment of the bank towards the customers. On the other hand, the organisation is committed towards the kids in the society by saving and counting coins by using magic Money Machines and teach them about budgeting for financing their education. Apart from that, for improving involvement with the social communities and creating values for the communities as a whole, the bank is involved with two charities for helping the patients with dementia and promoting children’s mental health through investment. These are the major strategic planning of the bank for sustaining in the financial sector and improve commitment and involvement with the social communities across the UK (CMA, 2015).

Conclusion

The strategic planning of the Metro Bank is effective to retain the customs across the UK market and strengthen their customer’s base by providing high quality financial products and efficient services to the customers at effective cost and high return in investment, which in turn helps the bank to improve their reputation and run their operational activities sustainably by building trust, technological upgradation, product and service diversification, maximising the customer’s expectation and giving high return on investment.

Reference List

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