Barclays Retail Banking in India

Analysis of Environment 5 1.1. PEST Analysis 5 8 1.2. Industry Life Cycle 8 2.0. Competitive stance of Barclays in India 9 2.1. Porter’s Five Forces 9 Section 2 13 2.1. Scale and Scope 13 2.2. Analysis of Strategy 14 2.3. Evaluation of Sustainability 15 References 17 Bibliography 21 Introduction After realising the potential of the emerging markets, many internationally operating business institutions have shifted their focus from developed economies to developing economies, such as China, Russia, and India (Raman, 2009). Following the trend, Barclays Bank Plc, which is by its origin an England-based financial institution, decided to expand its business in India in the year 2006. Conversely, the organisation had already entered the market almost 30 years before the commencement of retail banking in the economy (Barclays, 2011). The paper focuses on the business environment of Barclays Bank Plc in India and services rendered by the company in the economy. With this concern, the paper discusses the macro-economic factors existing in the Indian Banking Sector through PEST analysis. It also intends to identify the strategic alliances adopted by the company with the assistance of Porter’s Six Forces analysis and evaluate its appropriateness in overcoming the challenges existing in the economy. With the objective to analyse appropriateness of the strategies adopted by the company, the discussion of the paper presents a comprehensive outlook of the current status of the industry in the economic region. It also represents the various facts regarding the strategic behaviour of the company. Section 1 1.0. Analysis of Environment 1.1. PEST Analysis Political Factors The Indian political system has a great influence on the commercial sector of the economy. The current scenario of the political environment in India possesses few advantages and disadvantages which in turn can affect the banking sector to a large extent. For instance, the economy possesses a well-structured regulatory framework to control commercial banking and on the contrary a high inflationary rate which is most likely to have an effect on the growth of the banking industry (The Times of India, 2010). Moreover, in the current fiscal year the government of India have subscribed to recapitalise the public sector banks in order to assist them in achieving a target of 15% in terms of outstanding loans (Scribd, 2011). One major reason which can be identified in this context is the growing concern of the political leaders in the economy to improve the financial market trends with an objective of stimulated economic growth. This reformation will certainly make the competition fiercer in the market and thus affect the operations of Barclays in India. Economical Factors The GDP rate of the economy is recorded to continuously increase and currently figures around 5.75% (as was recorded in March 17th 2011). According to the economists, the economic growth rate shall persist to increase in the next few years (Ganesh, 2011). The interest rate of the economy is forecasted to continue on a high percentage (i.e. 5.75%). However, the inflationary rates of the economy are also recorded at an increase with 9.30%. Interest Rates of the economy currently figures to 5.75% and thus reflects a challenging business environment (Ganesh, 2011. Trading Economics, 2011). The economic situation of