CASE TEACHING NOTES
Bernardo Bátiz-Lazo and Nurdilek Hacialioglu with contributions by Jarunee Wonglimpiyarat and Douglas Wood
The case study is concerned with how a long-standing market leader tries to maintain market share and develop its business in an industry undergoing significant change. Students are challenged to formulate, evaluate and compare a range of strategic options and to choose the best way forward for Barclaycard
2. Position of the case
The Barclaycard case study lends itself to illustrate how to identify and evaluate possible courses of action. In particular, evaluate • • •
the development of direction for Barclaycard’s strategic alternatives (chapter 7 of Exploring Corporate Strategy), possible courses of action against the criteria of suitability, acceptability and feasibility (chapter 7 of Exploring Corporate Strategy), issues of synergy and parenting advantage (chapter 6 of Exploring Corporate Strategy).
3. Learning objectives
The Barclaycard case study develops students’ understanding of how to identify, evaluate and rank possibilities for growth. In particular, the case study will illustrate the issue of how, despite growth in the number of participants and claims of increased competition, credit cards remain a remarkably profitable component in a bank’s
This note was prepared by Bernardo Bátiz-Lazo (London South Bank University) and Nurdilek Hacialioglu (Open University) with contributions by Jarunee Wonglimpiyarat (The National Science and Development Agency of Thailand) and Douglas Wood (Manchester Business School). It is intended for class discussion rather than as an illustration of either good or bad management practice. The contribution by Professor Douglas Wood (1942–2003) was published posthumously. Bátiz-Lazo, Hacialioglu, Wonglimpiyarat and Wood (2004). Not to be reproduced or quoted without permission. 419
© Pearson Education Limited 2005
portfolio.1 Also, it provides students with insights to forces altering competitive stalemate when competitors use credit cards as loss leaders while incumbents try to run for profit. Specific goals include allowing students to: • •
develop a sensibility for the business environment of a sector with diminishing profitability margins; assess business strategy as a stretch (i.e. based on developing resources and capabilities) by identifying directions and methods to develop strategy (for example, by using exhibit 7.1 of Exploring Corporate Strategy); identify key success factors in retail financial services by ranking alternatives for growth against each other.
4. Teaching process
It is important that students are familiar with the case before class discussion. This will ensure that the debate about alternatives for growth is specifically related to the market position that Barclaycard had established at the turn of the millennium. It must be a debate specifically about Barclaycard and not about credit card issuers in general. A “straw poll” before starting to analyse the case should confirm that students understand that Barclaycard had both the technological and a business platform to maintain industry leadership. However, managers at Barclaycard effectively let their position of advantage slip. Damage has been done and Barclaycard’s managers’ immediate concern is how to stop continued loss of card market share rather than mount a comeback. The straw poll, therefore, can help put the whole student cohort in the same mind set and deal with students being bothered about little information on Barclaycard’s customer groups, channel management or the like (more below). Student preparation could be done individually (prior to the session) or in smaller groups prior to plenary discussion. It is also possible to ask some of the smaller groups to look at the success of Barclaycard’s competitors to gain market share in the UK at the expense of...