Allied Irish Bank SWOT Analysis and Strategic Evaluation

consort Irish Bank elevate Analysis and Strategic EvaluationAllied Irish Bank performed the Market Entry Strategy to embellish their business size. Stated below is the brief of their strategic evaluation in the aspect of suitability feasibleness acceptable.Suitability Build on/exploit strengthsIn the late 1990s and early/mid-2000s, and jacket crownized on the sunny housing commercialise, booming business cussing internet and much lower write-offs than in previous years, such favourableness and bring approximatelyth have had a signifi derrieret positive effect on the Irish Economy. That dishs AIB having good capital base for future day market development such merging.Shape Managements sense in the party, they clearly recognize that inter subject fieldization is a good way for business expansion.Good/tailored services to be provided by the company towards clients, it chiffonier be careful for the business penetrating into the market. Simultaneously, they ar easily win ning the nature too.Good experiences in managing banking business, that helps the company to control over the unexampled merging company. Overcome/avoid weaknesses ethnic Difference the company cant fully twin their culture to other countries, as easy to retrovert other contingencies puzzles.Complicated organizations chart caused human resources conundrums, like salary expenditure increased, hard to manage. wanton away for/Develop OpportunityEconomy Growth in East Asia, that creates youthful opportunities for the company.Through Merging, obtaining the other customer base, co-efficient is expected. Counteract/avoid threatsThe other countrys government whitethorn not allow foreigner to obtain national bank and may set some restriction as a barrier.Expanding too fast may cause lack of capital if the business is running not as good as expected. feasibilityFrom 1966 to the end of 2005, the assets of $323.8 jumping up to 133 bn. Employee 24000 people and 750 offices now, that pr oved the company is profitable, emerged in the obvious capital get along and much employee neededAcceptabilityAs the company asset built up rapidly, no wonderment the companys bell in stock market entrust be going up as healthy. That can fulfill the s clutchholder needed.The company lasts biggest bank in Irish and gradually penetrate into other market and seems grow healthy. Stakeholder should as well satisfies for the continually grow.Never heard that the company has any news about layoff, so assumptive that the companys finance is good and staff is working stably.As company focalisati unityd on the tailored service, their customers patriotic should even be higher.Page 4 of 12 Subject Strategic ManagementName of assimilator Chan Sheung Ming Student ID2102 5544Section A Question 2Here is the Strategic Development Plan of Allied Irish Bank (2007 2012)Background of the CompanyAllied Irish Banks (AIB) was expressiond in 1966, they brought unitedly with the collar dis tinctive Irish Traditional Banking companiesthe Provincial Bank in 1825the Royal Bank, eleven years after for mercantile linksthe Munster Leinster that was formed in 1885, considered as the largest banks with the most large scale of branch intercommunicateDuring that moment, the alliance was thinking out a best way to overcome the fragmented nature of the Irish banking industry.Hence in the middle of 1960s Ireland was changing fast and the merger had strengthened the position of the bank in the developing globular business era. Over the decades, the company had showed an increasing expansion in the global bena, from its establishment of branch network in Britain during 1970s to its investment in the USA during 1980s intravenous feeding decades since its establishments, it and be said that AIB has a dynamic and successful organization. As a result, in 1966, AIB had showed aggregate assets of 323.8 one million million that had grown to 133 billionAIB Groups is considered as the l eading banking and financial services organization in Ireland that operates principally in Ireland, Britain, Poland and the USA. It has more than 24,000 employees word wide in more than 750 offices . It has four main departments AIB Bank (Republic of Ireland) AIB Bank AIB corking Market and Poland.SWOT Analysis(S)trengthsStrong position in the home marketGood picture show of the organization to the home market and other countriesSpecializes in straight forward approach bankingRelationship point approach.(W)eaknessesDo not have enough knowledge and experience towards global bankingNot giveing to take the risksAfraid to jump to the bandwagon of inherentization.(O)pportunitiesBlooming domestic economyLarge increases in the credit growth in 1990s and mid-2000sDevelopment of non-traditional bankTrends towards internationalistic banking marketExploit the Irish ethnic market in the UKAccess to Asian marketMerging and acquisition.(T)hreatsGrowing number of competitionCompetition fro m businesses or banks that are purporting e-banking.The SWOT analysis of AIB which pertains on the different characteristics or attributes of the organization as well as the external environment that can affect the entire decision-making process of AIB. The strength of the company tensiones on its ironlike position in the home market. Thus, it enables the company to have a good image in other countries where in it also offers their services. In addition, the company also specialized in straightforward banking approach and descent oriented approach where in it is considered as their uncreated advantage towards their relationship with the customers. The said aspect is the evidence why AIB was voted as Britains greatest bank.On the other hand, the weaknesses of AIB focuses on its immaturity n terms of international banking, or lack of much knowledge in trouble in distance. The most visible sample is their withdrawal from the capital of Singaporean market. As a result, the compa ny no longer has interests in taking the risks in other most-valuable markets in Asia, chiefly in China.There are different opportunities that can be exploited by the company in order to remedy and expand. First is the blooming domestic economy as well as the large increase in the credit growth during 1990s and mid-2000s. In addition, there is also a outgrowth trend towards non-traditional banking or e-banking. This is collect(p) to the bulky impact of the Internet. Thus, it is in-chief(postnominal) to consider that in terms of emerging markets, the leaders in e-banking are found in Asia, and Singapore is considered as the primary e-banking customers, garnering 5% ( 2001). Thus, it shows that it lead be of import to focus on the Asian market, primarily in China, that is facing fast growth in terms of economic aspects. This can be through by the process of merging and acquisition.The major threat for the company focuses on the growing number of competitors in the industry, particularly those banks that are religious offering e-banking features and services.MissionThe mission of Allied Irish Bank is to strengthen two domestic and international performance and position in the market of the bank.ObjectivesThe following are the objectives of AIBTo maintain the war-ridden advantage of the companyTo expand the size and branches of AIB in different part of the worldTo promote efficiency, perceptual constancy and effectiveness of AIB banking system andTo meet the changing demands, needs and preferences of the people towards their banking experiences.StrategiesThe Ansoff Growth Matrix is a spear that is used in order for a business to decide regarding their product and market growth outline. It suggests that a business ability to grow depends on whether it markets new or existing products in a new or existing market (2007).The strategy of AIB will focus on Market development or offering the same product to a new market. This is of the essence(predicate ) collectible to the growing influence of globalisation to the banking system, consequently going global is one of the most important way of expansion of size that will help to increase profits. In the case of AIB, the company had been able to apply new technologies including the Internet in their services, thats why it will be important for them to explore and exploit other nations or markets, particularly China. This is repayable to the continuous growth of Chinese economy. However, alongside with the said strategy, it will also be important to focus on improvement of the core banking system, together with the human resource management.RecommendationsThe following are the recommended strategiesImprovement of the outlineApplication of Information System and IT in an organization is one of the most important actions that can be done by the organization delinquent to the fact that it can help them to manage all of the info and information that are important and use it in the process of decision making.That is why it will be important to focus on application of core banking system that will give way for future enhancement or changes in the internal and external aspects of the company. In order to support the growth plans from 2007 2012, improve AIBs speed to market for new product introduction as well as to provide great back-office integration, it is important to sterilize a move to transform the core banking system by using incase banking application that will ensure scalability, performance as well as reliability. This is important due to the growing competition, where in all of the major players in the world of banking are looking for innovative ways to prepare and improve their core systems that can help to reduce the operational cost by changing the massive server farms to a more flexible as well as efficient systems ( 2007).This strategy will focus on the product development, where in it will focus on the initiative of the company to offer ne w products. By doing this, it will enable AIB to gain competitive advantage by means of offering differentiate products or services towards the customers. As of now, more and more people are becoming aware(p) of the security issues regarding their money, thus the technological advancement of a bank can affect the image of the brand, thus will help to create a feeling of security for the clients.Development of Centralized HR ActivitiesIt is important to consider that AIBs human resource management as the companys strengths due to its ability to motivates the employees, particularly the managers to work at their bests, as well as to communicate and relate to the customers in order to give what they needs and call for to understand. However, the company is having difficulty in managing in a distance. This is due to the different issues, primarily culture and tradition. It is important to consider that culture plays an important role in the process of motivating employees. It will be important for AIB to apply international standards or principles, however it is important to know that people from other country, primarily Asia, has a different perspective and understanding towards several things, peculiarly in terms of management that are related to to leadership styles and approach. This also goes the same as the clients of the company. There are different characteristics between their client from the US and Asia. The said factors must be considered in order to ensure that all of the rules, regulations as well as policies will meet the expectations and needs of all the stakeholders that are involved in the entire process of the company.This strategy will help the company to have a good customer relationship that will help to strengthen their connection with the customers. The said aspect is very important due to the fact that the attitudes, behaviors and knowledge of the employees, specially the branch managers and front personnel can affect the perception of the clients towards the bank. If the employees or personnel were knowledgeable enough, they will be able to answer the queries of the clients therefore, it can help to build up trust, and subsequently on blotto and long lasting relationship.Expansion to Asian Market, Particularly in ChinaAs of now, Asia is considered as one of the most profitable on a pre-tax return on asset basis. As a payoff of fact, the report of BCG in 2007 showed that the wealth managers in the Asia-Pacific reported a median pre-tax margin of about 45.5% during 2006 that beats the overall global profitability of 34.7%. As a result, the industry is expected to continue to growth to about 20% to 30% a year, together with the increasing number of well-heeled individuals as well as greater awareness regarding shifting of cash in the banks (2008).The improving and booming economy of China has been accompanies by the fast-growing banking sector of the country. It has been showed that by the end of 2007, the total assets of banking sector of China had reached a total of 52.3 trillion, masking a great annual growth of 17.4% from 2003 2007. The banking industry in the country is considered as the primary supplier for capital of about 80% of the non-financial enterprises fundraisings in the most populous nations in the world as well as the fastest growing major economies ( 2008).This strategy will help the company to expand to a vast market, particularly China, due to the development of its economy.Section B Turn Around Management in Marks SpencerBackground of the CompanyMarks and Spencer emerged as one of the largest retail companies in the world that had become a limited company in 1903 in Manchester, Britain ( 2006)Marks and Spencer plc is the largest retailer in the UK. It has 300 company-owned stores, with more than 68,000 employees round the world that sell clothing, footwear, gifts, home furnishing and food to more than 13 million shoppers. Most of the products be sold under the pr ivate label St Michael brand ( 2006 (. In addition, the company also owns and operates more than coke stores in different part of the world such as Europe, Hong Kong and Canada. There are more than 85 franchise stores of the company that can be found in Europe, Far East, Australia, the Middle East, the Bahamas and Bermunda . MS owns the stand Brother, its reach of store of mens clothing that has more than 170 units in Japan as well as the US. In addition, MS also owns 20 stores of King Super Markets grocery store chain in New JerseyCauses and Symptoms of DeclineIt is important to consider that the primary cause of any exasperate in profitability is bad management. This is because if management were enough and applicable in the process of tracking the success of the companys products and changes that are likely to take place in their respective markets, and if the company is taking the correct actions, then profits would not decline. However, as such success would require omnisci ence even the most systematic managers will make mistakes (1996.)Poor ManagementAll of the problems start at the top, thats why inadequate management is often the primary reason to the decline in profitability. This is due to the fact that those personnel or people that are creditworthy for the different operations of the company are making wrong decisions regarding the specific strategic decisions that are world made or even to the personnel that are being employed in order to employ the said decision ( 1996, ).In 2002, , a Belgian executive who is responsible in the turn around of MS, that causes the company to report a four consecutive increase in terms of sales, hand over to Roger Holmes, considered one of the youngest chief executives of blue-chip Brits companies (2002). The said event is considered as one of the primary reason for the decline of MS, due to mismanagement by the CEO. Most of the senior and middle management reported that they are queer with the lack of progr ess, due to leadership problems of Holmes such as being to nice, taking too long to make decisions and lacking relevant in terms of experience.Another cause of decline of MS is the complicated structure where in beyond the main board was an operating committee with 19 members. The said aspect is due to the fact that CEO was not that familiar with the core products of the company.Financial ControlIt is also important to allow that poor financial control is a common cause of fall profitability due to poor budgetary control, inadequate costing system as well as the inability to monitor as well as control cash (1996).In the cause of MS, Holmes believes that throwing more money at the problem can be the best way to boost profits. This can be seen in the massive actions of the company which involves acceleration of transformation of the business by firing employees, and development of stores and other line of products ( 2004).Marketing Efforts overlook of trust from the customers is con sidered as one of the causes as well as symptoms of decline. This has been one of the primary problems of the company. Customers had complained that the trust had been damaged, due to the fact that the company was already offering low-quality products. In addition o that, the company had a problem regarding their innovation process, which is considered as very important aspect in any company.Production and OperationsThe go quality of the product is one of the primary aspects that focus on the production and operations aspects of the company. In MS, it was due to poor labor relations of the upper management.Environmental FactorsThe changing demands, tastes preferences and needs of the customers are the primary factors that can affect any company. However, in the case of MS, the company did not focus on strategies that will help them to meet the said change. The said aspect is important because it can greatly affect the perception of the customers in any brand. In addition to that, m ore and more customers are looking for products in lower price but in good quality. Thus, in order to meet the said expectations, the company decided to mechanism different strategies that will help them to lower their price, like their competitors, however, the said aspect affected the quality of their products that later on affected the demand of the customers.As a result of the said causes, the company encountered falling profitability, falling dividends, increased debt, decrease liquidity and falling sales (1996). This can be observed on the fact that despite of more than 10 million customers every week, the company have not yet recaptured the glorification days between 1997 and 1998 when it had made over 1 billion pretax profits. In 2004, MS announced a decreased in sales of 3.6%, compare last year (2004).Recovery StrategiesThe management was changed in 2004, as part of the entire organizational change when Robert move took place. Rose focuses on the five core determine of n ew MS quality, value, service, innovation and trust. This is due to the fact that Rose believe that Holmes management focuses on the management processes instead of products, costs and disapprove of their decision for not growing out of town.As part of that, Rose decided to have a partnership with HSBC in order to manage the financial division of the company. This is due to the fact that the company, under the previous management showed characteristics such as no coordination across department as well as the fact that the product proliferation by sub brands had weakened the core proposition. Aside from that, it was also found out that the process from drawing board up to the shop floor was kind of mute that resulted to lack of innovation due to weak determine strategy.The change strategy of the company focuses on abandoning , because it was not targeted at natural MS customers obtaining Per Una from Davies for 123 million canceling more than 500 food products developing supply cha in and sourcing in order to reduce the overhang of the stock stopping waste and unnecessary administration costs improving different core services returning 2.3 billion to the shareholders moving to out-of-town retail centers restructuring and pleonasm changing the mentality of the employees and closing or upgrading the companys storesThe said strategies had been done by focusing on the internal communication process, as well as focusing on the needs and demands of the customers in terms of styles and qualities of their products, as well as the services that are being rendered by the employees towards the customers.Current StrategiesIn 2007, under the new management, MS had reported its strongest results since 1998, showing a profit of 29%. In addition, the company increased their greet beyond the middle-aged, middle-class housewives by offering younger brands such as The Limited Collection. The said strategy enables the company to focus on one particular segment of their customer s.The primary problem of the company is the pricing process this is due to the fact that MS primarily perched at the top end of the mass market by selling high-quality products that the customers were willing to pay a little more for. However, due to the changing preferences of the customers, together with the growing competition with other stores, primarily Tesco, that is offering the same type of products, the company decided to focus on lowering the price of the products that they are offering. Aside from that the company also focuses on their food division in terms of marketing, by showing to their customers the importance of the quality of their products (2008).