Business Strategy

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 Table of Contents
Introduction......................................................................................................................................3

Profile of the company (Legal and General Group plc)..............................................................3

LO1: (Task 1)..................................................................................................................................4

P1: Applying appropriate frameworks to analyse the impact and influence of the macro
environment on a given organization and its strategies...............................................................4

LO2 (TASK 2)...............................................................................................................................11

P2: Analyse the internal environment and capabilities of a given organization using
appropriate frameworks.............................................................................................................11

LO3: (Task 3)................................................................................................................................12

P3: Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organization..........................................................................................................12

LO4: (Task 4)................................................................................................................................16

P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organization.............................................................................................................16

Conclusion.....................................................................................................................................21

Reference.......................................................................................................................................22

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Introduction
Legal & General Group PLC is an investment management firm, British and multinational
organization dealing in finance, was founded in 1836 located in the UK. The products of this
investment management firm are managing of investment, mortgages which are a lifetime
(equity releasing form), life assurance, annuities, pensions, and insurance that are general. This
firm has an operation in the UK plus the US. Gulf, Europe and Asia are in investment
management business with Legal & General Group PLC. This company is on the London Stock
Exchange’s and FTSE 100 index’s list (Financial Times-Stock Exchange 100 Index) considers it
essential. L&G has named Legal and General Investment Management (LGIM) as an arm that
manages assets. In the world of AUM (Assets under management is the total market value of the
investments that a person or entity manages on behalf of clients), it holds the 10th position as the
largest investment management firm. In Europe, Black Rock has taken the first position, but it is
a firm that manages the investment for institutions and is standing at the second position in its
size of income and operation. The revenue of the company is over US $56 billion.

Profile of the company (Legal and General Group plc)

Figure 1 the logo: Legal and General Group PLC

Source (Legal and General Group PLC, 2018)

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As a multinational, the entire world takes various insurance services and products from Legal &
General Group Plc. It has its operation in numerous sections. First comes, Legal & General
Retirement (LGR), in this segment a client will keep getting allowances with 100% guarantee for
a particular period of time, it will be specified in a contract. It will also ensure lifetime mortgages
and insurance schemes which are lengthy in term for a pension of a company. Second, comes,
Legal & General Investment Management (LGIM). Legal & General Capital (LGC). Structuring
services, plus Investment strategy and implementation, and direct investment are offered by this
segment. The fourth segment’s name is Legal & General Insurance (LGI). Protection products
are the agenda of this segment, like critical illness and accident; health, disability, individual
term assurance; annuities; savings and death benefits. The fifth and the last is the General
Insurance (GI) segment. This segment provides sickness, household and accident, pet insurance
products, and unemployment. The aim of Legal & General is becoming a leader of a different
type of insurance, in affording digital access. The company had won the Insurance Times Claims
Technology Solution. The innovative project is what the company invests on, for example- tech
properties for future cities and puts money into environmental solutions like offshore wind farms
(Campbell and Craig 2005).

LO1: (Task 1)
P1: Applying appropriate frameworks to analyse the impact and influence of the
macro environment on a given organization and its strategies.
Strategic planning

Planning of strategy is an activity of management within a company. It helps fix priorities of

actions, concentrates on resources and energy, tightens operations, makes sure that workers and
the related people work with goals which are common, comes to an agreement regarding the type
of result, measure and fine tune the companies (Zulkifi 2013).

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Different Strategic techniques are:-

Vision Statement

Step number one is creating a brief declaration of the company’s values, purpose. The ambition
announcement must include the central ideologies of the organization, that the firm positions for,
how much the existence matters and why. What is the image of the company that it can visualize
for the future, including how it wants to achieve its goal, using its preferred methods?

Mission Statement

When it comes to the mission statement, the company needs to concentrate on eight important
aspects of the firm. These are chief goods and facilities; the geographical location of operation;
desired public image; main skills; promise to existence, development, and success; thinking;
target customers and markets; self-concept. The company’s promise to existence, development,
and success signifies the component of finance (Legal and General Group PLC, 2018).

Strategic and Financial performance objectives

We all know that Strategic and financial are closely linked. Every performance taking place
automatically impacts the other. An effective strategy is financial performance, but to get good
results, investment is important.

A comprehensive strategy for achieving the objectives

The effective strategies will be implemented by the company to achieve the objectives. The
strategies will help achieve the goals in an immensely effective way. The strategies are good and
very important.

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 Figure 2: Strategic Planning

Source: (Worthington et al., 2018)

Various planning of strategy

Below are the available types of planning of strategy:

 Strategic Plan

The mission should be in mind when making a strategic plan and the design should take the
entire image of the organization in the mind. The seniors of the organization will design a plan
and set goals, and find a way to achieve it, in the long term. The plan should be made,
visualizing the position of the company in the next 3 to 5 years. Here, the top management takes
decisions for all (Campbell and Craig 2005).

 Tactical plan

The tactical plan acts as a translator of the strategic plan in the organization. The tactical plan is
concerned with responsibility and functionally to fulfil the part strategic plan by the lower level
department (Campbell and Craig 2005)

 Operational plan

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Managers who are at the frontline or have a lower level in the management make the plans for
the operation. Plans of operation focus on particular processes and methods that occur in lower
level management in the organization. High levels of detail are used to plan the route tasks by
managers (Campbell and Craig 2005)

Figure 3 Stakeholders

Source: (Campbell and Craig 2005)

The company stakeholders are people having a keen interest in the business. Two types of
stakeholders are:

Inner stakeholders: These people are directly connected with the business, those working as
colleagues. Inner stakeholders are directors, employees, trade unions, shareholders, managers,
employee associations and owners.

Outside stakeholders: people from outside, the people who are interested in our business. They
are competitors, suppliers, associations, government, banks, customers, society and financers.

In the analysis of stakeholders, stakeholders who are corporate will be identified and evaluated.
It is usually done in a process which has three steps.

Identifying the stakeholders who are main (directly joined with the corporation and their say
matters) is the first step. It includes shareholders, suppliers, employees, customers and creditors.

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Identifying the stakeholders who are secondary (indirectly joined, but affected by its activities) is
the second step. It includes NGOs, governments, communities that are local, associations of
trade, competitors and activists. Estimating how much every stakeholder is affected because of a
certain decision which is strategic is step number three.

Stakeholder matrix

According to Worthington et al. (2018), projects can be managed with a tool called a matrix of
stakeholders. The matrix of stakeholders helps project stakeholders to take the required action to
line tidy up the project goals. Various types of matrices of stakeholders are available such as the
following:

 Matrix of interest of power

 Matrix for analysing stakeholders
 Matrix of assessment of engagement of the stakeholders

Shareholder Mapping

Mapping of stakeholders is a process of collaboration which includes debate, study and

discussion which are taken from various angles to decide on a list of main stakeholders within
the whole range.

Figure 4: Stakeholder Mapping

Source: (Jenatabadi, 2009).

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 PESTLE Analysis

Figure 5: Pestle Analysis of Legal and General PLC

Source: (Yepa, 2010)

Political:  In this point policy of tax, finances and tariffs of trades which can be levied by a
government throughout the financial year and can significantly put effects on the environment of
business. With this point, one can decide how a government can pressurize a particular business
sector or country’s economy. For instance, a new kind of tax may be introduced which may force
a structural change of a company (Tahir 2012).

Economic:   There are many factors related to economy such as rate of inflation, rates of
interest, rates of foreign exchanges, the pattern of growth of the economy, etc. Based on various
companies that are going through this analysis, it can also include FDI. The economy is
determined with these factors and puts a direct impact on a company’s various aspect. For
instance, depending on the rates of inflation a company may have to revise the price of its goods
and services. In addition, the buying strength of a consumer can also change.

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Social:  These factors look into the market environment of a society, and decide the factors that
determine it such as the trend in culture, analysis of population, demography, etc. For instance,
we can bring the buying trend of western countries like the US. In the US, people buy more
during the holidays.

Technological: These factors are related to improvements in various technological matters and

affect an organization tremendously. It may have to buy newer machines or employ newer
experts. This can often be very negative for a company. For example, automation, R&D, etc.
(Tahir 2012).

Legal: Changes in legal matters or laws can severely impact on a company’s operation within a
market sector. The mode of operations is often affected by these laws. For example, in
Bangladesh, the ride-sharing companies are having a problem including an SOS button in their
app as it is required by the government but the police agencies are not showing interest in this.

Environmental:  The business sectors such as farming, tourism, agriculture, chemical industries
can have a severe impact on their surrounding environment. Environment pollution is a very big
factor for these industries. If the people around these industries complain about their operation
then they may have to move the whole operation depending on the situation.

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LO2 (TASK 2)
P2: Analyse the internal environment and capabilities of a given organization using
appropriate frameworks
Questions related to the value

Will a certain resource give a company the ability to benefit from an opportunity given by a
particular environmental situation? Can a particular resource help the company defuse a threat to
the environment?

Questions related to the rarity

Is there a resource which is being monopolized by a group which is very small in size?

Question related to imitability

If a company wants to develop a particular resource, will it put this company at any disadvantage
in money?

Resources Value Rare Imitation Organization Competitive

Advantage
Challenges of Yes No Vision cannot NO Competitive
Leadership be imitated Advantage
vision will be there
Managing Yes No Imitation is Yes Important
Regulatory possible factor
Obligations
Tesco Jv Yes No Organization’ Very much Knowledge is
Corporate s strategy skilled good
Strategy line varies
up activities
Various innovative Competitors imitated details can be Provide s
Product will always competitors found in case competitive
Lines try exhibit advantage

Opportunities new revenue No Competitors utilized no potential

and streams will will imitate
requirement be creating
of new for help

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 resources
Supply Chain NO Yes Have nothing Nothing new business
Network to imitate running
Flexibility

The analysis of This question helps an organization like the Legal & General Group plc to create
a successful business strategy (Yepa, 2010).

LO3: (Task 3)
P3: Applying Porter’s Five Forces model evaluate the competitive forces of a given
market sector for an organization
Legal & General Group plc is a multinational business concerned with financial service. The
competitive forces of the company are assessed by Porter’s 5 Forces Analysis. Following is the
company, Legal & General Group Plc’s, Porter Five (5) Force Analysis for the Financial
Industry (Hin, 2013).

Porter’s 5 Force:

Porter's Five Force model was established in 1979. This was established as a diffident outline for
measuring and assessing the viable forte & place of company. As stated by Yeap, (2010), “the
idea behind the theory is 5 forces in the industry control the forte of competing in the market.”
(Yeap, 2010). Porter’s five forces support to identify where the power lies in a business state.
These forces help find the position of power within the state of a business. This helps to fathom
the force of an organization’s present situation and in a market where it intends to enter.

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 Figure 6: Porter's 5 Forces

Source: (Yepa, 2010)

Threats of Newer Contestant: New entrants in the Insurance transport innovation, new conducts
of performing an action and place compression on Legal & General Group Plc over the strategy
of the price which is lower, a cost which has been reduced, and offering plans of values which
are new to customers. This business is in the financial service industry, so they have to manage
these things as well. They have to manage all the challenge and form effective blockades to
protect their edge of competition.

In what way Legal & General Group Plc could challenge Threats of Newer Contestant

 With revolutionising of new service and goods. New things bring newer customers for a
company also provide the long-standing customer with a motive to buy the products of
Legal & General Group Plc again (Jenatabadi 2009).

 With structuring scale of the economy providing a lower price to the customer is
possible.

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  Forming capacities and spending cash for development and research. Newer entrants are
not expected to pass into a dynamic business where the recognized companies like Legal
& General Group Plc define the ideals often. It provocatively cuts space of rare proceeds
for newer entrants thus deject newer entries within the business sector.

Bargaining Power of Supplier: Suppliers are very important for all the companies and this
sector is also not different. Suppliers in the central position can reduce the margin that the
company can earn in the marketplace. Powerful suppliers in the financial sector use their power
of negotiation for extracting a high price from the companies in this field of financial service.

In what way Legal & General Group Plc can confront Bargain Power of the Supplier

 Forming an efficient supply chain network with numerous suppliers.

 Investigating with product design by using diverse materials so that if the price goes up
of one raw material then the corporation can move to one more.

 The evolving relationship with the supplier whose businesses depend on the firm. The
good example here would be Walmart. They also had issues and they overcame it with
much efficiency.

Bargaining Power of Buyer: Purchasers are frequently a challenging proportion. They want to
get the best thing with the lowest price. This puts pressures on the profitability of this company
in future. Smaller, more powerful base of the customer of the business has the higher the
bargaining power of the customers and they try taking advantage.

In what way Legal & General Group Plc can challenge the Bargaining Power of Buyer

 By forming a larger customer base.

 By quickly inventing new products.

 Customers will not run away to the newer entrants if newer products are offered

Threats of Substitute Service or Goods: If any new good and service meets an analogous client
requirement in varied ways, the productivity of industry has to suffer. The threats of the
substitute good and facility will be better with a better plan of value which is exceptionally
diverse from the present offering of the company (Jenatabadi 2009).

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In what way Legal & General Group Plc can challenge the threat from alternate product and
Service

 Focusing on service, instead of only the merchandise.

 Knowing the main customer requirements instead of what the buyer gets.

 By making an increase in the switching costs for the clients.

Competition amongst the Existing Players: According to Jenatabadi, (2009), competition

among the existing players in the same market will keep the price of a product in check and a
reduce the productivity of the business.

In what way Legal & General Group Plc could challenge the tug of war amongst the present
Players in the market

 Forming a differentiation that is sustainable

 By forming better-contesting scale.

 Collaborating with players to allow the growth of the market instead of fighting for every
small bite.

The implication of Porter’s 5 Force on Legal & General Group Plc

By evaluating the competitive forces Legal & General Group Plc tacticians can gain an
understanding of influences the productivity of the association in their business. Trends which
shift the game can be recognized by them earlier on and can rapidly retort to benefit from the
evolving chance.

Balanced Scorecard: A company’s strategy and mission can be interpreted into a group of
measures of performances which can give a strategy applying framework from the scorecard
which is balanced.

As nonfinancial and financial matter are balanced by this scorecard it is called balanced.

In the scorecard which is balanced, targets are developed in all the sectors by:

• Financial: How is our appearance to our shareholders?

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 • Customer: How are we being seen by the clients?

• Internal business perspective: Where should prove our excellence?

• Innovation and learning: Can we continue to improve and create value?

The company could use it very wisely. They have to make a framework for their profitability.
They can set the goals in the following ways

• Financial: they need to have a clear position in the marketplace and the returns on the
investment will be visible to the shareholders. This will attract shareholders.

• Customer: The customers already have a good vibe about this company and the position
has to be maintained.

• Internal business perspective: The Company needs more innovation.

• Innovation and learning: The Company has to extend the offering portfolio. And they
also have to observe the others’ action in the market and work accordingly.

LO4: (Task 4)
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organization.
The company, despite its good situation, faces many challenges in the market. So, the company
has to be many alerts about its strategy formation. The strategies have to be very well-thought so
that the company can remain in the leading position. Following is a discussion on this.

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 Figure 7: The Strategies Source: (Mohammad, 2012)

Cost and price leadership strategy

In the business strategy, the leadership of cost is considered to be a competitive advantage as this
provides the lower operational cost in the business. the Leadership of cost is frequently
motivated by the size, scales, scope, efficiency and also cumulative experiences. A cost
leadership approach intends to achieve scales of manufacturing, an attainable scope, offering
high standard goods by using the technology. This can be applied here as the service needs to be
given at a certain point of time. They can easily allocate the cost in other aspects. They can offer
a unique service but at the lower cost as they are having a higher margin. They can make a
strategy that will allow them to get a higher margin from one product and a lower margin from
another. This will make them cost leader in the market of that low-priced service. They have to
balance the cost and they can easily become the cost leader by giving the customers with better
price.

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 Figure 8: Source of Competitive Advantage

Source: (Akhtar, 2012)

Differentiation strategy

This is also an approach that can be used by the company. According to Ismail, (2009), “this
approach aims to progress the production of unique goods for diverse customer sections.”

Figure 9: Differentiation Strategy

Source: (Tahir, 2012)

This method is used where the company has explicit advantages over its competitors and is able
to sustain a very luxurious advertising campaign. Different type of strategies come under this.

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  Focus strategy
 Low-cost strategy
 Segmentation strategy

Figure 10: Strategies for Leadership

Source: (Worthington et al., 2018)

Focus strategy
this strategy pursues to recognize a specific section within the wider marketplace and to control
that section. A marketing strategy in which a corporation focuses on the existing resources for
entering into or growing within a very small market. This type of tactic can be used the
organization that knows its field of operation very well and owns goods which content the
requirements competitively.

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 Figure 11: Focus Strategy

Source: (Campbell and Craig 2005)

This image clearly shows that the company has to do something which will be in between the
cost leadership strategy and the differentiation strategy. Or else, there can be a combination of
these strategies. Following is the breakdown of these strategies (Jenatabadi 2009).

Bowman’s clock of strategy:

With the help of this clock, a company can find out its various positions which are fruitful
strategically – i.e. in what way merchandise must be put in the best position within the context of
its market. The company needs to know about the diverse strategies so that these can be used in
strategic planning.

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 Figure 12: Bowman’s Strategy Clock Source: (Zulkifi, 2013)

Hybrid strategy

In this strategy, the price will be lower. And then there will be unique products that will be
offered. This strategy will be effective as the company will have no pressure on minimizing the
price too much and they will also be able to get the margins properly.

Diversification

Diversification is one of the core strategies that prove to be very effective. The company can
achieve it by making their portfolio diverse. This will help them get more customers. Ultimately
the company will be in a gaining position (Mohammad 2012).

Overall Analysis:

As the company is operating in the financial service sector, they can easily get through to the
topmost position by using the strategies carefully. This will not cost them much but they will
definitely be in the gaining position (Ismail 2009).

Conclusion
Legal & General Group plc is a multinational business concerned with the financial service.
They are in a position where there are many competitors. They need to retain their position and
they also need to be tactical. Strategic planning has to be perfectly done. If the strategies are not
formed wisely, the company will fall in a bad situation. To have a better positioning in the future,
the company needs to apply a combination of the cost-leadership strategy and differentiation
strategy.

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