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BARCLAYS PLC

BARCLAYS PLC. Global Financial Services Provider Retail Banking / Credit cards Corporate and Investment Banking Wealth Management Nine Segments: UK Retail Banking & Barclaycard Western Europe Retail Banking Barclays Africa (Absa) Barclays Capital

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BARCLAYS PLC

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  1. BARCLAYS PLC • Global Financial Services Provider • Retail Banking / Credit cards • Corporate and Investment Banking • Wealth Management • Nine Segments: • UK Retail Banking & Barclaycard • Western Europe Retail Banking • Barclays Africa (Absa) • Barclays Capital • Barclays Corporate/ Barclays Wealth & Investment Management • Recent Activities: • March 2010 – Company was reorganized into Three Business Groups: • Global Retail Banking (GRB) (including Absa/African Subsidiary) • Corporate and Investment Banking • Wealth Management (CIBWM) • 2011 Acquired “The Mill” (Digital Effects Co.) • 2011 Acquired “Eggs” a U.K Credit Card Firm

  2. Structure of Commercial Banking IndustryIndustry SIC: #6029 - Commercial Banking Barclays Key Competitors: Deutsche BankLargest German Bank/CEO Changes / E.U Debt Crisis2011 - 4th Qtr Income (- 69%) HSBC3rd largest U.K Competitor / U.S. Senate Investigation – Money Laundering - Terrorism Royal Bank of ScotlandRanked 7th Globally / Assets 2.1 Bn. /2009 Govt. Bail Out

  3. Porters Five Forces Entry Barriers (High): • Economies of Scale – Banking Firms are large providing lower operating costs • Commercial Banking - Well regulated (Domestic & Foreign) • E.U., Western Countries, India and Africa are all highly regulated by Local Governments/Central Banks • Govt. Decisions: Regulate interest’s rates • Loans/Bank deposits Controlled tightly. • India Govt. and other countries control number of offices/branches opened. (Distribution) • Oversight/Control kept on Deposits/Loan Lending / Fees • Barclays Brand Identity is not wide spread (in Africa or India) as well as the other foreign banks • Customers like to invest in government or public sector banks (worried about the deposit safety) • Rural areas tend to remain untapped/ Governments keep firms from expanding (Limited Distribution)

  4. Porters Five Forces • Rivalry - Existing Competitors (High) • Emerging markets – such as India or Africa • Substitute banking products • public agencies & smaller private banks – • NBFC’s (Non-banking financial companies) - run under separate regulation standards • Microfinance lenders - fund small investments in rural areas • Large Institutions make Acquisitions • (E.G) Barclays purchasing Absa – an African retail banking firm. • Brand Identity is blurred • Many large firms have similar products

  5. Porters Five Forces • Bargaining Power of Suppliers (Medium) • Bank Suppliers = Institutions / People • Raise capital or funds • Emerging markets - Barclays is a non listed company • Major sources of capital or funds comes from its immediate customers or depositors • These are considered Barclays main suppliers for their emerging markets. • According to Scribd.com - Depositors have a High Bargaining Power in Emerging Markets • Barclays and other foreign banks usually need to offer a higher interest rate on consumer deposits than the local banks.

  6. Porters Five Forces • Bargaining Power of the Customers (Medium) • Customers in Emerging Markets = Suppliers (Non-listed Banking Firms) • Power of Customers = Power of Suppliers. • Customer has a High BargainingPower • Many types’ of Banks/ Lenders operating in the Market • Offer similar banking services • Intense Competition Means Need for Higher Interest Rates • better lending terms • Increased Customer Service • Must retain customer loyalties. • According to Scribd.com - Barclays is reported to rank high on their quality of services provided by them.

  7. Porters Five Forces • Threat From Substitute Products (High) • Substitutes in the retail banking industry • Private money lenders • NBFCs / Microfinance Programs • Numerous Insurance companies • Banks offer hundreds of Financial Products • Other Retail / Business Services • Not just Deposits / Lend Money • Domestic Commerce / Emerging Markets /Globalization • High chance a chief competitor or non-banking financial services company will be offering similar products and services • Increasing competition (Unconventional companies) • Sony, General Motors and Microsoft • Preferred Financing • CarCompanies offering competitive - 0% financing • Highly Fragmented Markets (India /Africa) • Customers = Higher chance of switching to other substitutes.

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