Free Essay: Strategic Development History of Royal Bank Scot in the Past 25-year Period

Published: 2019-08-30
Free Essay: Strategic Development History of Royal Bank Scot in the Past 25-year Period
Type of paper:  Essay
Categories:  Strategy Business Banking
Pages: 7
Wordcount: 1696 words
15 min read

The Royal Bank Group is an international banking entity that delves existing and emerging markets to offer competitive financial services. Founded in the mid-18th century, the banks zeal to globalize and capitalize in financially potential markets was a long-term view. However, the course changed in the 1990s. The bank had failed in the quest to acquire Standard Chartered for the lack of public interest in its intentions. In turn, the uneventful business plan and its subsequent failure was a threat turned an opportunity in the following period. However, the firms plan did not cease with the challenge (Avgouleas and Cullen 2014, p. 28).

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Innovations and sustainability of financial economies

In the early 1990s, the Royal Bank of Scotland endeavoured in the development of services that would serve the majority needs of the customers in its markets. For instance, the management realized England and Scotland as economies whose consumer markets safeguarded or sought affiliation with firms depicting heritage. For that reason, the bank acquired legal approvals to the design and printing of commemorative banknotes. The innovative venture provided indirect marketing for the financial provider as citizens anticipated patriotism, loyalty, and the value of history.

The 1992-printout of 1 note commemorated the historical convention of UKs Presidency of the Council of the EU with the pictorial details engraved to show the Holyrood Palace, which was the Council of EUs venue for the convention. Despite the increase of competition in commemorative printouts, Royal Bank Scot dominated the market for the limited notes in the markets. Subsequently, the demand for its financial services escalated.

Further, the Royal Bank of Scotland ventured in the provision of financial insights and loans to multinational corporations with substantial interest rates coupled with mutual agreements to the repayment period. Under the strategic development of the product, the banks capital assets and security of revenue were revamped. The economic significance of the increased financial relations through advice and loans guaranteed commitment and clients loyalty. At the extent that the 1,000+ recipients of the financial services succeeded in the investments, more potential customers would emerge targeting the bank for similar benefits (Gianiodis et al. 2014, p. 68).

To that factor, the banks strategic development revamped its presence in the European markets. For the domestic and local enterprises, the Royal Bank introduced Visa Debit. The 2008 agreement enhanced the banks authority to legally develop services that would guarantee efficiency in the payment processes (Gianiodis et al. 2014, p. 74). The development led to the establishment of the PayPass contactless; an electronic payment system that provided European users with prompt success in multinational exchange and payment without pilferage of the participants confidential details.

Stakeholder relations

The bank pursues long-term development with sustainable and realistic objectives for mutual relations with the existing and emerging financial stakeholders. For the companys employees, the Royal Bank Scot refurbished its bureaucratic management and leadership system to accommodate low power and responsibility in the performances. With the presence of the banks services in thousands of branches at the international level, the company resolved to the reinvention of teamwork and informative discussions among employees within each branch. The strategic development of common meetings as a daily routine was incremental to change in the workforce relations as multicultural teams would learn the mission and vision; hence, eradicating differences for the sake of success in the set goals and objectives (Avgouleas and Cullen 2014, p. 29). Also, the firm introduced financial incentives and other similar benefits as rewards for the team and individual performances irrespective of socio-cultural or political differences.

RBS rebranding from Royal Bank of Scotland for multinational success

The Royal Bank Scot rebranded to RBS for successful integration in the global spectrum of monetary and capital markets. As a strategically placed entity and a leading financial services provider in 10 members of the global G20 economies, the firms strategic penetration in the US, Canadian, and European markets was a phenomenal change. In 1994, RBS provided loans for the industrial sector; thus, auto and equipment procured dominance in the American markets. The banking industry of the New York was in 1994 devolved to alternative solutions of managing the ABS and MBS firms. Besides, Conduits was added to the portfolio; making Royal Bank Scot a secondary trader of American top brands.

High yield and high earnings products in localized marketing criteria

The capital and investment criteria were a rewarding strategy as the benefits revamped the financial and retail products realized an 11-year period of innovative and diversified growth in the potentially chosen segments of the market. The investment grade and high yield products had influenced the UK upper-class society of investors; hence, similar engagements were evident in the European regional markets and the American environment. In 2006, the company recorded an increase of 16% in pre-tax profits. The forecasted growth in income grew by 10-Tiers, and the dividend per ordinary share grew to 25%. Evidently, the multinational bank realized that the forecasted revenue growth would be accrued through the increase of its client population in the Asia Pacific market. Therefore, the companys headquarters in Edinburgh and the Asian region managers embraced the forecasted revenue growth as critical towards the planned objectives and growth strategies.

RBS viewed the need of establishing a profound solution as inevitable in attracting growth in its Asian market segment. However, the issue of competition and poor infrastructure in a number of the countries threatened the implementation of its various alternatives. For example, the management perceived the introduction of credit card services as costly to the companys budget citing the cost of $450 as expensive to the developing and developed nations comprised in the 15-country market segment. It is apparent that RBS strategic development targeted the credit card alternative as crucial; hence, they acted on by introducing student, medical, media, and energy industries loans. With capital markets in every country of operation, the money market products revamped the companys asset base. Subsequently, the international financial integration of over 10 products, 5 global currencies, and secondary financial management of firms earned credibility for RBS from its stakeholders.

The multinational corporations strategic teams suggested the extension of RBS direct mailing, telephone banking, and other technology and high-quality service products as alternative long-term measures. According to the perceived alternatives of yielding the necessary population of domestic, economic, and investment groups; RBSs strategic layout resolved to the acquisition of numerous banks and 28 companies. The forecasted revenues and an extension of the banks telephone-banking services would serve to deliver the target objectives. Arguably, the electronic and telephone-banking services would influence the clientele to perceive the approach as a fast model of banking and exchange of monetary services. Further, the sustainability and growth alternative of using numerous banking solutions in the global markets would influence the middle and lower middle income-earning individuals to join the banks consumer and retail clienteles.

It is evident that the banks clientele comprised upper-class consumers; hence, competitors such as HSBC, Barclays, and Standard Chartered Group implemented reduced cost plans of operating banking accounts. On the contrary, the competitors were influencing the low income-earning clientele, and the outcome propelled revenue growth (Gianiodis et al. 2014, p. 78). Such credentials indicate the extension of the telephone banking service would influence the different types of banking clients to engage in the banks services over those of its competitors citing the fast and unprecedented security of the model. It is realistic that the alternative decision would enhance the corporations ability to influence banking clients within the market and outside the region to the extent that the company would diversify its service network (Acharya and Steffen 2013, p. 247).

Implementation of a long-term plan

The implementation of general and preferred products compels global investors and clients to perceive security and integrity in RBS. The managements approval for the research and development teams to conduct a research survey in the target markets. The banks approach gains necessary competitive advantages in the information of the consumer behaviour, competitors products, and the perceived market outcomes in the diverse environments. In the second step following the RBSs approval to engage the markets with a long-term strategy, the company realized the need to assess the marketing mix outcomes and the rate at which the consumer market segment would indicate growth. Lastly, the company reinforced its commitment to conduct a post-event analysis to assess the outcome of the strategy in the global market and the anticipated growth under the strategy.

RBS Company outlines the customers who may make a given purchase of the services previously owned by the acquired firms. At a given price with the innovative concept of pursuing the unexpected needs, it is certainly profitable for the RBS financial services and its investors. According to the innovation theories of entrepreneurship, RBSs application of the unexpected theory elevates the company towards achieving a competitive advantage in the acquisitions and innovation of services (Avkiran 2015, p. 149). The stabilized asset bases and capital of investments elevate the company to recover from restraining financial crisis such as that of 2008. RBSs design makes it the latest banking model for the strategic development of goal-oriented objectives.

Current strategic situation: STEEPLE environment

Social environment

History depicts that the globally renowned RBS entity, but currently a restrained financial firm led in the implementation of the viable and feasible financial services. Thus, with the 1990s strategic restructuring of the business, the upper-class population of the clientele was attracted to the new products. Since profits enable a company to expand, avoid chances of losing to competitors, create employments, maximize output, and enjoy the economies of scale, RBSs acquisition of National Westminster and Adam Company Group Plc. did not restrain the financial firms capital and investment banking product line. Hence, it remains a successful innovation towards its 2-decade market leadership with corporate and public understanding.

Research conducted by NASDAQ Incorporated concludes that the purchase of different banking and industrial mining entities was not a monopolistic engagement. The financial firms brands inclined RBS to assume the first position ahead of HSBC for its undisputed experience in the ICT and electronic banking services. The unexpected theory remains incremental towards the development of CSR and value-oriented products as seen in the general operations (Acharya and Steffen 2013, p. 248). For enhanced relations, the company provides scholarships and training sessions for career development. Such measures are incremental to its friendly relations lasting decades with multicultural...

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