Metro Bank has presented a different banking concept to Britain people as they are no longer required to book an appointment to get their requirements fulfilled at banks. It was launched in 2010 in London. Metro Bank offers services for the entire week from 8 AM. – 8 PM. It has revolutionized the banking industry and challenged major retail banks with exclusive specialties like high-standard customer service (Metrobankonline.co.uk 2018). Interestingly, customers are now able to open up their accounts within a day. The bank is also unique in strategy making as evident from its expansion for which they had not considered purchasing branches of rival companies. They have rather considered an organic expansion and have focused on having close to 100 branches by 2020. They are popularly known as a high-standard customer service. The future expansion will therefore rely much on how they maintain their service (Metrobankonline.co.uk 2018). This study is purposefully aimed at understanding the essentials of business strategies which can effectively help to grow with incrementing numbers of retail banks.
As stated above, the study is purposefully aimed at understanding the essentials of business which are considered during business expansions. The case study organization is Metro Bank which had revolutionized the banking sector by bringing a different concept to it. It has offered street side retail outlets where customers can visit without booking an appointment. Moreover, stores are open at anytime between 8 AM to 8 PM 7 days in a week. The purpose of this assignment is to understand the different factors which may impact the business expansion of Metro Bank.
The three terms needs, wants and demands do keep much of importance for a business and for its success in the existing or the target market. ‘Needs’ can be understood as the service or product which is essential requirements of customers on a daily basis and so. ‘Wants’, on the other hand, are the product or service that customer need (Pike 2015). The two terms ‘needs’ and ‘wants’ though have the same meaning; however, both differ to each other significantly. The product or service which is essential to customer can be regarded as ‘needs’. On the other hand, product or service which customer decide to purchase on being influenced by external factors like executive selling skills, the product features or others. Moreover, customers are made to realize the importance of such products or services (Pike 2015). ‘Demands’ can be regarded as product or service which customer expect from their specific brands or the industry. This can be an updated version of the existing product or so (Pike 2015).
Needs- The ‘needs’ of Metro Bank customers are account opening or any other task that does not require an authorization from the banking officials like the branch manager. Additionally, they can also make transaction which is very useful for elder people as they have comparatively very less acquaintance to mobile banking services (Armstrong et al. 2014). The ‘needs’ can also be understood from an example of customer basically need calling from a mobile phone. Millennial customers do also need internet compatibility with the phone. Therefore, every single phone is being manufactured while keeping in mind that it offers the two most basic needs from a phone.
Wants- Digitalization of banking sector can be regarded as ‘wants’ to customers. It is an inevitable fact that customer still has their enlarged trust on physical or personal visit to banks. On the other hand, physical banks are still far much behind in the age of digitalization. Online banking is much quicker than the physical banking system (Armstrong et al. 2014). Additionally, there exist two types of customers like the one who prefers visiting physical branches and another who prefer online transactions over physical banking. However, those customers in specific the millennial customers are aware of it that online transactions are not much secure. In this regards, it appears like that majority of customers will still be relying on physical banking but wanting a different concept like the retail banking. It offers them a digitalized form of banking activities (Armstrong et al. 2014).
Demands- Customer demands from Metro Bank can be understood from an example of the buying behavior of customers for Smartphone. Customer’s expectations are getting high which is also impacting the manufacturing behavior of different Smartphone brands. Different brands are now focused on incepting advanced technologies to offer customers a much superior camera quality and so (Baptista and Oliveira 2015). Following the same way, this can be said that customers can have demands like doing those activities also that require authorization from banking officials like the branch manager.
Situation analysis can be regarded as strategy which an organization conduct to identify its internal and external business environment. By doing this, the organization gets able to know its strengths, weaknesses, opportunities and threats. It is indeed important to know the area of improvement or also the probable opportunities. It is also necessary to know how much the rival companies are threatening to an organization (Fleisher and Bensoussan 2015).
It also helps to know the external business environment where an organization operates. This is also very necessary as it provides information on some useful factors which could affect the business. It tells the political condition of the country where the business operates. It also tells the economic, social, technological, environmental and legal aspects of the country of operations. The different factors that an external business environment covers do affect the business from different perspectives (Chen et al. 2014). For example, if political factors are not suitable this will definitely impact the business. Like it happened to Seagate in Singapore where the company has closed one of its plants to remain cost-effective but had to struggle for unfavorable policies like giving higher compensations amounts to affected labors.
|
Political |
Economic |
Social |
Technological |
Environmental |
Legal |
|
-Government policies will play major role in the future operations of Metro Bank -A favorable political background will produce supportive environment for the bank |
-There is a notable impact of income flow on the banking sector -A prospering income flow will also ensure that customer needs the number of transactions from Metro Bank |
-Consumer behavior is vital to the success of Metro Bank -It may be successful in attracting Boomers and Baby Boomers; however, millennial customers will still want relying on mobile internet banking. However, a more and more digitalization of services at Metro Bank may help to attract few numbers of Millennial customers as well |
-This is perhaps one of the most dominating factors for the success of Metro Bank. The era of digitalization has produced the necessity to incept various technologies to ensure a more advanced form of service and thereby, helping the physical banks to be as one of the choices for a mass customer. -A smartphone is one of the technologies which has not only enabled the transaction service to happen but has also allowed the scanning of cheques. Hence, the clearance will now require a much reduced time span. |
-It may also have an impact. -The use of mobile banking has reduced the usage of papers which may significantly contribute to the lessening of environmental pollution |
It does also impact as banks are required to follow the different laws regarding the customer privacy and consumer laws. |
Table 1: Macro Environment of Metro Bank
(Source: Metrobankonline.co.uk 2018)
The one technological factor that could impact the business of Metro Bank will be the use of Smartphone. The use of Smartphone has made things easier by enabling customers for various works on internet. One of the most advanced applications is scanning of cheques. The one economic factor could be the cash flow. The concept as such of Metro Bank does support transaction facilities. An improved economy will attract more and more people doing the transaction.
To fulfill the needs of customers is an utmost responsibility of business organization. However, the needs cannot be fulfilled by just offering customers a wide range of product or service. It rather requires an understanding of what competitor companies are offering to customers in the industry. This is needed to offer a much competitive product or service from different perspectives like cost-effective and quality-oriented.
|
Metro Bank |
Royal Bank of Scotland |
HSBC |
||
|
Total assets (£bn) |
It is still in growing stage with an asset 10.06 (Metrobankonline.co.uk 2018) |
One of the biggest digital banks in the UK with 817 customers (Lloydsbankinggroup.com 2018) |
It is another competitor company to Metro Bank with 783 (Rbs.com 2018) |
The biggest retail bank in the UK with 1,936 (HSBC.com 2018) |
|
No. of customers |
1,124,000 with a 33% year-on-year increment rate (Metrobankonline.co.uk 2018) |
16 million customers (Lloydsbankinggroup.com 2018) |
30 million customers (Rbs.com 2018) |
38 million customers (HSBC.com 2018) |
|
No. of employees |
2,129 (Metrobankonline.co.uk 2018) |
45,856 (Lloydsbankinggroup.com 2018) |
71,200 (Rbs.com 2018) |
228,687 (HSBC.com 2018) |
|
Products |
Credit cards, corporate banking and consumer banking (Metrobankonline.co.uk 2018) |
Banking and insurance (Lloydsbankinggroup.com 2018) |
Finance & insurance, corporate banking, retail banking, mortgages, credit cards, investment banking and consumer banking (Rbs.com 2018) |
Retail banking, investment banking, corporate banking, private, mortgage, wealth management, private banking, finance, insurance and credit cards (HSBC.com 2018) |
Table 2: Three Key Competitors to Metro Bank
(Source: created by author)
The comparison with the three biggest banks like HSBC, Lloyds Banking Group, and RBS just shows that Metro Bank still has much to prove in the coming future. The bank is actually nowhere in competition with the three giant banks. However, Metro Bank is slowly climbing up the ladder of success. Based on above analysis, few areas have been found where Metro Bank needs to focus much. They need an incrementing graph for branches, so that, they could offer services to a wider customer base and hence, be able to enhance their total assets value. In this way, they will need to recruit more professionals to support wider customer base and hence, number of employees will also improve (Cubas?Díaz and Martínez Sedano 2018).
Product-
It offers personal internet banking, mobile banking, mortgages, opening of bank accounts, quick access savings, careers and lot more (Metrobankonline.co.uk 2018).
Place-
They have targeted the high street areas, the area which is accessible to customers, so that, their benefits get double. Additionally, it is also accessible to customers due to its strategy for location (Metrobankonline.co.uk 2018).
Price-
Commercial loans are available in terms from 1 to 30 years. Fees and rates are simple to each of the loan category. Professional landlords can avail a solo loan size of approximately £250,000 per property. Loans are available on an interesting basis for 25 years. Customer can also buy assets; however, they are allowed to repay the amount in a 5 years term (Metrobankonline.co.uk 2018).
Promotion-
Metro Bank does not rely on advertising strategies which is why they do not spend much on advertisement. Additionally, they do not also rely on introductory incentive offers and sales incentives. The management has always relied on word-of-mouth publicity (Metrobankonline.co.uk 2018).
People-
They are quite different to many in terms of people as they welcome fresh applicants from every corner of the country. They have a very healthy diversity rate with the fresh recruitment. The number of female and male workers is almost the same when they are being hired. It just indicates that they believe in spreading a positive message across the country (Metrobankonline.co.uk 2018).
Processes-
They have several processes to deliver their service. They are open both in the format of a branch bank and also in the ATM format. Additionally, they are also providing mobile banking and personal internet banking options. This means they are offering digitalized services to customers (Metrobankonline.co.uk 2018).
Physical Evidence-
Physical evidence includes but is not limited to like printed documents indicating different services with the bank such as mortgage and personal bank account details. They also offer cash transaction receipt in the ATM branches (Metrobankonline.co.uk 2018).
Conclusion:
To conclude, this can be said that Metro Bank is providing some promising services to customers in the form of being flexible with the business time and the technological advancement. However, the bank still has a long way to cover as it is much more behind to top retail banks like HSBC, RBC and Lloyds Banking Group. This is also evident that other banks are providing the same services; however, the unique selling point has been the official time which offers customer a physical banking throughout the week from 8am-8pm.
References:
Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014. Principles of marketing. Pearson Australia.
Baptista, G. and Oliveira, T., 2015. Understanding mobile banking: The unified theory of acceptance and use of technology combined with cultural moderators. Computers in Human Behavior, 50, pp.418-430.
Chen, Y., Wang, Y., Nevo, S., Jin, J., Wang, L. and Chow, W.S., 2014. IT capability and organizational performance: the roles of business process agility and environmental factors. European Journal of Information Systems, 23(3), pp.326-342.
Cubas?Díaz, M. and Martínez Sedano, M.Á., 2018. Measures for Sustainable Investment Decisions and Business Strategy–A Triple Bottom Line Approach. Business Strategy and the Environment, 27(1), pp.16-38.
Fleisher, C.S. and Bensoussan, B.E., 2015. Business and competitive analysis: effective application of new and classic methods. FT Press.
HSBC.com. 2018. HSBC Group corporate website | HSBC Holdings plc. [online] Available at: https://www.hsbc.com/ [Accessed 14 Mar. 2018].
Lloydsbankinggroup.com. 2018. Home – Lloyds Banking Group plc. [online] Available at: https://www.lloydsbankinggroup.com/ [Accessed 14 Mar. 2018].
Metrobankonline.co.uk. 2018. Culture and diversity at Metro Bank | About us | Metro Bank. [online] Available at: https://www.metrobankonline.co.uk/about-us/culture-diversity/ [Accessed 14 Mar. 2018].
Pike, S., 2015. Destination Marketing: Essentials. Routledge.
Rbs.com. 2018. rbs.com. [online] Available at: https://www.rbs.com/ [Accessed 14 Mar. 2018].
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