Business environment is very dynamic and it is influential to the strategic marketing and corporate strategy of all the organizations operating in the business world. It is crucial for organizations to devise marketing strategies and corporate strategies after analyzing the external environment effectively and efficiently. Any mistake or ignorance in analysis of external environment can cause the organization to face severe consequences. (Porter, What is Strategy, 1996)
If you need assistance with writing your essay, our professional essay writing service is here to help!Essay Writing Service
Organizations always seek to gain a sustainable competitive advantage in the market place by designing effective and efficient marketing and corporate strategies. Efficient and effective marketing strategies enable the organization to exploit their core competencies and capabilities to gain short-term and long-term marketing place success. Efficient marketing strategy of an organization is always integrated with the corporate strategy of the organization. Corporate strategy is the larger picture of the organization while strategic marketing is at the Strategic Business Units (SBUs) levels of the organization. (Porter, The five competitive forces that shape strategy, 2008)
In this paper, the author is assumed to be working for an organization which is a banking corporation operating in UK. It is assumed that the organization is “Standard Chartered Bank” that is reviewing its marketing strategy and wishes to adopt a more “consumer oriented” marketing strategy. The author is the member of a team of operational managers who are playing a key role in devising a new marketing strategy of Standard Chartered that is the oldest bank of UK (150 Years). The case of Standard Charted will be studied to understand the strategic marketing concepts and to devise an effective strategy. The Paper is divided in three main parts. The first part highlights the use of marketing techniques to ascertain growth opportunities in a market and report on the impact for the organization of current changes in the marketing environment including other functional areas of a marketing strategy. The second part includes an analysis to identify the current strengths and weaknesses in a marketing strategy. The third part analyzes that the organization could respond to the changes and key emerging themes in a marketing strategy. It also plans how to use marketing strategy options in a market and create appropriate strategic marketing objectives for a market.
Growth and current marketing strategy of the organization
In order to study and ascertain the growth opportunities for Standard Chartered Bank UK, the most effective way is to study the external environmental factors. The most effective tool for studying the external environmental factors is political, economic, political and social (PEST) analysis that discusses the most influential factors for the marketing strategy of an organization. The Pest Analysis for UK banking industry can help the operational managers’ team to ascertain growth opportunities in the UK industry and it is as follows:
If we rationally analyze the political conditions of United Kingdom then the political condition in the external macro environment are:
The UK economy is an open economy which allows and appreciates foreign/local direct investments. The UK comprises the market based / free market economy with less governmental control and interventions. The government plays its role as a facilitator rather than influencer in the business industries and markets.
UK government supports and appreciates competition among different organizations to improve their efficiency and to make wider choice/lower prices available to consumers. In this way, the government supports both the organizations and competitors.
There is a political stability in the country which provides opportunities for foreign direct investments. (The National Archives, 2010)
Standard Chartered has actively undergone growth through expansion in other parts of the Europe for beating the competition. It is an effective and efficient strategy to grow under stable political conditions of United Kingdom.
Economy is suffering from a recession due to global financial crisis. It is a threat for the financial sector because standard chartered is operating in this sector.
Unemployment has increased.
Bargaining power and disposable income of consumers has decreased due to inflation and unemployment. It is threat for consumer banking.
Production level has decreased and the government is considering revising its taxation policies due to economic recession. This is a threat for Wholesale banking sector
But, economy has started recovering now gradually.
Standard Chartered is facing some difficulties due to the economic and financial recession in UK. (BBC News, 2010)
Consumer’s focus is now shifting towards standardized goods and services are low prices. Consumers are now more focused towards savings rather than spending. It is an opportunity for standard chartered bank.
Consumers are more rational and sophisticated now. Banking services are needed to be very direct and personal.
Brand loyal customers are now becoming brand switchers due to low disposable incomes.
The demographics of UK has changed dramatically with the increased number of younger generation and presence of different ethnic groups such as Asian, and Americans across the world which have low incomes and low purchasing powers. There is an opportunity for standard chartered bank to launch products/services targeted towards youngsters with low incomes and low savings. (Walayat, Britains Population Growth and Ageing Demographics Impact on UK House Prices, 2010)
The government supports competing technologies in the UK and appreciates innovation and technological developments.
High Research funding for technological development is being made UK government in different sectors.
To support open economy to increase competition for providing better services to consumers, the government plays the role at a catalyst in technological developments throughout the Europe.
Standard Chartered has invested heavily in advanced technology to improve its banking operations. (DTI, 2003)
Interpretations of the above environmental factors to ascertain growth opportunities for Standard Chartered and its current strategy
Economic conditions and competition is a threat for the banking corporations of UK. But, Standard Chartered is focusing efficiently on different kinds of banking services such as consumer banking, wholesale banking, retail banking and corporate banking which clearly reveals efficient portfolio management of Standard Chartered bank. Standard Chartered bank is pursuing a differentiation strategy relative to competitors by offering different products and services to customers and it is actually following variety based positioning which was described by Michael Porter (1996, What is Strategy) to differentiate and to compete with the competitors. (Standard Chartered Official Website, 2008)
People now need savings because of the economic recession. Also the government spending in technology has increased. People are more focused on standard goods and services at low prices and market has now become fragmented and saturated. Therefore, Standard Chartered is offering standard goods and services to customers by accessing them effectively and efficiently. Standard Chartered has employed high end technology to integrate its banking operations and relationship marketing such as online banking, ATMs, and also it has employed latest technology in branch banking. It is attempting to reach customers with standard services at low prices with access based positioning as defined by Michael Porter (1996, What is Strategy) and it is doing it by reaching customers online, personally and through social media marketing. It is also important to note that technology and information has now become a competitive advantage for organizations. The same is the secret for Standard Chartered sustainable competitive advantage in the marketplace that is technology and information. It is the effective and efficiently strategy by Standard Chartered to reach customers innovatively and efficiently by making effective use of technological conditions to exploit social conditions of UK.
Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.View our services
But, there is also a threat for Standard Chartered in employing differentiation strategy because the social, economic and technological conditions highly appreciates a cost advantage rather than a differentiation advantage in UK because of the low disposable incomes of consumers and low purchasing power. Cost advantage may allow standard chartered to offer banking services to customers at relatively low prices to target more customers than competitors.
How to grow?
Standard Chartered must employ a cost advantage instead of differentiation advantage because competitive advantages are now imitable, customers have low disposable incomes, economic recession and low purchasing power and it is the time to consider a penetration pricing strategy to capture as much market share as Standard Chartered can to beat the competition. Therefore, capturing market share is the growth opportunity available for Standard Chartered. Also, it is a “customer oriented” marketing strategy.
The situation analysis or the SWOT analysis is an effective tool for assessing the internal strengths and weaknesses of Standard Chartered Bank to identify the strengths and weaknesses of marketing strategy.
Standard Chartered is one of the oldest banking of UK. It has the first mover advantage in the banking industry of UK.
It has the international exposure and it has access to international resources. It is able to gain location advantage by expanding to a new geographical region. It is also able to gain ownership advantage due to foreign direct investment support and free market economy of UK.
Standard Chartered has sustained a variety based and access based positioning which is difficult for competitors to imitate.
The bank has the skilled human capital
The bank has made technological investments and it is the technology leader in banking sector.
Standard Chartered has failed to sustain a cost advantage. The PEST analysis highly appeals a cost advantage in the banking sector rather than having a differentiation advantage.
The current PEST analysis reveals that banking sector market can be succeeded if Standard Chartered gains a cost advantage instead of differentiation advantage such as economic recession, low bargaining power of customers, low disposable incomes and market saturation etc.
The Standard Chartered can invest in the developing economies and can harvest its major capital investment from UK to gain location and ownership advantage.
Low entry and exit barriers of Market
Competitors are efficient in imitation of competitive advantages
Customer sophistication and rationality
Low disposable income of customers
Recommendation and Suggestion for Standard Chartered
Introducing a new concept for Standard Chartered – “Value”
The basic purpose of corporate strategy of an organization is to maximize shareholders’ value and same is the case of Standard Chartered UK. The most effective way to maximize shareholders’ value is to increase customer value which will cause increased sales, profitability and market share. Customer value at this time in UK is “money”. Therefore, value can be described as “Value is the worth in monetary terms of the social, economic, technical and service benefits in exchange for the price paid for the Standard Chartered Services”. The price of these banking services of Standard Chartered should be relatively less than the competing products and it should save for money for customers relative to competitors in terms of investment returns and interests. It is possible only if Standard Chartered focuses on reducing overall costs at the organizational level and supply chain level. Supplier side is important because bargaining power of suppliers is low and standard chartered can negotiate more with suppliers to bring its overall costs and in return provide services to its customers at low price which will definitely save money for them. It is also attractive as customers have low purchasing power and low disposable incomes.
Positioning of Standard Chartered must be changed to “cost” instead of differentiation. Positioning can be defined as what customers perceive as advantages and disadvantages of our products and services. The desired positioning for the brand would be “value” as it provides value to customers by saving their money and increased worth in terms of economic, social, technical and service benefits relative to competitors.
It can be concluded from the above strategic marketing strategy of Standard Chartered that environmental factors are highly influential to the internal business operations and marketing strategy of an organization. A successful attempt to recommend a new strategy for Standard Chartered Bank was recommended in this paper.
Cite This Work
To export a reference to this article please select a referencing stye below:
Related ServicesView all
DMCA / Removal Request
If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: