BARCLAY CARD

Critically Evaluating Barclays Card using the Key Frameworks of International Business

Students Name

Couse

Date

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Introduction:
Trade is defined as exchanging goods and services between two entities. Similarly,
international trade is the exchanging of goods and services between two people living in different
countries. In international trade, many theories have been proposed and practiced. With this
simple explanation of trade, environmentalists and economists have given numerous theories to
analyze the factors that affect the impact of trade. During the evolution of trade, they have
interpreted various trends responsible to explain the effect of trade.

International Trade Business Theories:

Here, I would analyze and go through the theory of international trade and also observe
the structure of international trade and business with respect to the policies applied by Barclays
Bank on account of Barclay Card.
Its important to understand how international trade took place historically (Friedman, 2005).
Version

Era

Globalization 1.0

1492-1800

Globalization 2.0

1800-2000

Globalization 3.0

2000-Present

In the era of version 1.0, nations dominated global expansion; in version 2.0
multinational companies inclined towards global development & in version 3.0, technology is
driving globalization. There exist two main categories of international trade, classical countrybased and modern-firm based.
The question that comes in mind that Barclays bank has followed which theory of
globalization. In reference with the case study, I came to know that Barclays bank was the first

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bank moved towards globalization 3.0 (Friedman, 2005). But the company started to get in the
era of information right in the era of 1980s-1990s. They were known as the first movers in
banking business in regard of Barclay card. This includes:

The issuance of first credit card in the country (UK)

They were the first in making possible to enable credit card payments thru internet

They were the first credit card holding bank who also had institutional access on the
internet

They initiated the first loyalty scheme (Mason, 1997) wrote that in the emerging trend of
trade, globalization has changed many aspects of human life. One concerning factor, that
globalization has changed is consumers concern. If we take the clock behind to 1800s,
we see that is history, the international trading prospects were different. People werent
concerned that how their trading will be impacting the environmental and social aspects.
But in the current era, businesses are concerned about social and economic factors. These
concerns have made the emergence of ethical markets possible. The ethical markets are
growing faster as compared to the regular markets

PESTLE Analysis:
There is another framework, (PESTLE Macro Environmental Analysis) which relates to
the social, political, economic and legal factors. We have chosen a framework called PESTLE
analysis. In this framework, we along with the coverage of the four factors we will also look
upon the environmental and technological factors as well.

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Environmental
Analysis

Political
Analysis

Social
Analysis

PESTLE
Analysis
Technological
Analysis

Economic
Analysis

Legal Analysis

Political Analysis:
With the launch of Barclay Card, we read about various impacts the launch brought.
When credit cards originated then customers used to pay full payment on monthly basis on the
required date, while Barclay Card was launched and it changes the whole idea. They made many
customers on account of cash back and nectar policies. Later on, ATMs came into being. The
bank charged extra if the card belonged to some other bank. Government imposed tax charges on
the bank and made a regulation on the fixed amount of credit card usage and also made trading
agreements with the bank.
Economic Analysis:
The success of the Barclay card opened new opportunities of employment and economic
growth was observed. Below an exhibit is shown, depicting amazing growth of transactions in
the UK card market from year 1991-2001.

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Social Analysis:
Barclay card catered all sorts of people. They also coved the European, Northern and
African states as well in order to make their consumer access vast on the global channel.
Technological Analysis:
Barclays made a good a step towards adopting technology. They were considered as the
first movers in the history of businesses. They adopted different technologies in order to make
their systems updated and also to incline their growth scale.
Legal Analysis:
During the usage of the cards, customers used to pay interest on it, the government felt
that the interest charges imposed upon the customers are little higher than expected rate. For
solving this issue, so-called Honesty-Tables were made to make the process of charging
interest more transparent.
Environmental Analysis:
The use of plastic cards has been made so extensively that the business does not realize
what harm this development is making towards the world. The process of making plastic cards is
harming nature. The waste is deposited into the oceans and rivers which is affecting the marine
life severely.

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FDI (Greenfield, JVs, Franchising)

(J. Peter Neary, 2007) researched on another frame work, known as Foreign Direct
Investment (FDI). Three modes of FDI shall be explained. Barclay card was a step towards
development and it was done when the bank decided to go for further market research, planning
strategies and market expansion. Thats where FDI was applied (Marios, 2011).
Greenfield: In the case study, Barclays Greenfield investments are also highlighted. Barclay
card was an initiation towards technology. The bank had technological and market concerns.
JVs: Barclaycard ventured with Natural Gas, Eastern Electricity & Cellnet when gold cards
emerged & it collected popularity in UK. This caused rapid growth of the customer base.
Franchising: Barclay Card began its franchising in year 1965 with the Bank of America with a
low investment franchise. Before year 200, the company franchised with VISA Network and the
franchise was exclusively enjoyed by Barclay Card.

Strategy:
For every business it is important to design and plan a strategy for making its business to
live long term. Here, we would analyze the strategies being applied by Barclay Card

Risk Management Framework:

Barclay card was launched when credits cards were already in the market. The company
is using framework to manage the risks linked with the trading business.

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Figure 1

The risk management features consists of certain factors:

Before implementation of a certain strategy or any process or investment identify

associated risks.

Assess the risk factors and share the assessments with the seniors.

Monitor the risk assessments

Control the risk environments through adjusting tools

Evaluate the effectiveness of the results

Learn & adapt the approaches for risk minimization

Organization Structure Framework:

(A Framework for Modeling Organizational Structure, 2013) is designed in order to achieve
better efficiency and effectiveness of processes. Looking at the Barclay Card, the company
decided to change its paper environment with IT infrastructure. That meant to fully
automate all processes in terms of computer based transactions. The IT infrastructure was
developed by Master Card and VISA.

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Porters Five Forces:

(Porter five forces analysis, 2014) is a framework which is planned to evaluate
level of competition within a business market and to develop business strategy accordingly
for inclining companys growth

a) Threat of New Entrants: Barclay Card has an edge in barriers to new entries because
they have excelled in maintaining a high market share. Their brand name, retaining of
customers, economies of scale, government policy has created edge for the Barclay Card
for restricting new entrants.
b) Threat of Substitute Products: There is always a room of substitute products being
launched by other bank. But, if some bank will launch a substitute card then the business
needs a lot of investment and research for taking a major jump.
c) Bargaining Power of Buyers: By looking at the strategies, Barclay Card took interest in
providing services to its customers. The inflation rate and customer switch to other
similar products forced them to launch different cards at particular rates & lowering their
prices. This helped the customer for choosing an appropriate card fitting its cost.
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d) Bargaining Power of Suppliers: Barclays purchased cards from business organizations

(Suppliers). This helped them going paperless. In order to avoid threats from suppliers,
Barclays gave purchase warranties and discounts to suppliers.
e) Competitive Rivalry: They had competitive advantage when ATMs were introduced.
The advantage that was added was the early entry technological advancements and
retaining as a market leader in many phases of card business

Michael Porters Value Chain Framework:

Porters value chain framework is a model that helps a business to evaluate and
analyze its business in such a way to create business value and a specific competitive
advantage (Porter M.E, 1980). The framework is as follows:

Figure 2
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It is divided in two processes; Support Process & Core Process.

Support process includes:

Firm Infrastructure: Barclay card made the firm infrastructure to go paperless. They
utilized the technology and managed the firm by authorization of computer based
systems.

Human Resource Management: By making the processes organized and managing the
human resources efficiently, Barclays was able to focus on other areas of interest.

Technology Development: This is a very important step which adds towards the
development in the card business. Barclays made sure to make of the technological
aspects because they knew that this is chief point where they can earn a unique
competitive advantage.

Procurement: This included the supplying of cards from the suppliers. Barclays made a
strategy for giving warranties and discounts on cards to suppliers in order to run the
procurement process smoothly.

Core process includes:

Inbound Logistics: The inbound logistics includes the storing of Barclay cards and
scheduling transportation of cards obtained by suppliers.

Operations: The operations include all the processes which are responsible in the
production to the usage of the Barclay Cards.

Outbound Logistics: These activities include the transportation of finished product to

the customer, transportation of cards, and the distribution of management processes.

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Marketing & Sales: Marketing is a process where Barclay Card invested a huge amount.
They have always tried to sustain a good market position and they have been investing
huge amounts on their promotional campaigns.

Service: They developed their customer base in terms of providing good customer
support services by giving organic growth & alliances. They established Nectar with
Debenhams, BP & Sainsbury serving as oil, clothes and food retailers respectively.

Ansoff Framework:
This framework helps the marketing advisers to develop business strategies in order to
achieve high growth opportunities for the company (Ansoff Matrix, 2014)
This includes four growth strategies:

Figure 3

Market Penetration: Barclays Card has quite efficiently penetrated in market. They
made their low price offerings and offered zero interest rate to new customers. They are
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trying to make their current offerings better in the existing market. Their market share
although lowered to 18% in 2001.

Market Development: The firm has also tried to enter in new markets. We can take the
example that Barclay Card was introduced in European, Northern &African countries.

Product Development: When Barclays launched their gold card this pushed to market
share of 30% (total of new cards issued) in accordance with case study.

Diversification: Barclay Cards have been with alliance with Debenhams, BP &
Sainsbury serving as oil, clothes and food retailers respectively to contribute with Nectar.

Conclusion
In Conclusion, growths in the 40 years that trailed the unveiling of credit cards in the UK
by Barclaycard were excelled by the continuation of improvement of business standards,
interoperating & interrelating processes, and meeting contracts of two technology stages for
payment methods (i.e. MasterCard & Visa). Barclaycards accomplishment over this time was
that it sustained a competitive advantage that was achieved by entering at early stage and be a
market leader in many phases of card trade industry. From the beginning, Barclaycard was the
largest credit card business in the country (UK), with an existence in Northern, European & in
some places of African countries.
Recommendations

The company has spent huge amount of money in their advertising campaign but the firm
should make an effort to incline towards market penetration further. They should
emphasize upon the card offerings

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Barclay Card has been successful for capturing customers minds and they have created
good brand recognition. The company should work at the pricing strategies of the
product. This would help them in making the market share wider among competitors.

Another recommendation for the company is to penetrate itself in more areas. They had
been serving in different countries but acquisitions and mergers would allow the bank to
penetrate deeper in the market. This would give rise to diversification as well which
would be helpful in creating a good image of the organization.

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References:
1. Friedman(2005) The World Is Flat (disambiguation), Farrar, Straus and Giroux, America
2005
2. (Mason, 1997) Challenges and Opportunities in International Business, Available from:
http://2012books.lardbucket.org/books/challenges-and-opportunities-in-internationalbusiness/s06-01-what-is-international-trade-th.html
3. PESTLE

Macro

Environmental

Analysis,

Available

from:

http://www.oxlearn.com/arg_Marketing-Resources-PESTLE---Macro-EnvironmentalAnalysis_11_31
4. Porter, M.E. (1980) Competitive Strategy, Free Press, New York, 1980.
5. A

Framework

for

Modeling

Organizational

Structure,

Available

from:

http://smallbusiness.chron.com/framework-modeling-organizational-structure12989.html
6. Porter

five

forces

analysis,

Available

from:

http://en.wikipedia.org/wiki/Porter_five_forces_analysis [23 November 2014]

7. (J. Peter Neary, 2007), World Economy FDI: The OLI Framework, Available from:
http://users.ox.ac.uk/~econ0211/papers/pdf/fdiprinceton.pdf
8. Marios I. Katsioloudes and Spyros Hadjidakis, International Business: A Global
Perspective, France, 2011
9. Figure

1,

Risk

Management

Framework,

Available

from:

http://www.sra.org.uk/uploadedImages/Solicitors_Regulation_Authority/Media/Images/S
RA/risk-management-process-overview.jpg

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10. Figure

2,

Michael

Porters

Value

Chain

Framework,

Available

from:

https://c1.staticflickr.com/3/2617/3716609920_8688a42fb8.jpg
11. Figure

3,

Ansoff

Matrix,

Available

from:

http://www.edrawsoft.com/images/circular/ansoff-matrix.png
12. Ansoff Matrix, Available from: http://en.wikipedia.org/wiki/Ansoff_Matrix

[27 June

2014]

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