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Bnp Paribas: Analysis Of Strategies

1446 words - 6 pages

2) Analysis of Strategies:
BNP Paribas has four core values in which it instills in each aspect of its business. The first is Responsiveness, this signifies the speed in the assessment of new developments, identifying opportunities and risks and efficiency in decision making. The second is Creativity this encourages new initiatives and recognizes contributions. The third is Commitment to clients and shareholders with exemplary behavior. The fourth is Ambition, to aspire for leadership and challenges with the desire to obtain group success. BNP implements an integrated cost-leadership/differentiation business level strategy. They do not only offer the widest array of products but the most ...view middle of the document...

Although present in all investment banking markets, it is recognized as a global leader in derivatives trading, structured finance, and project finance. Investment solutions include Asset Management, custodial banking, and real estate services.

The firm has several resources and capabilities that serve as a source for their competitive advantage. Firstly, it is one on the world’s leading banks in terms of total assets, market share, size and global presence. “In October 2010, BNP Paribas was rank by Bloomberg and Forbes as the largest bank and largesat company in the world by assets with over $3.1 trillion.” Moreover, in 2011 it was named the words biggest bank measuring total assets of $2.670 trillion. This in turn enables the firm to be financially sturdy and able to thrive in global economic downturn and fraudulent activity. For example, “BNP Paribas escaped the 2007–09 credit crisis relatively unscathed reporting a €3bn net profit for the year of 2008, and €5.8 for 2009, both years boosted by profits from trading in its CIB (Corporate and Investment Banking) division.” Moreover the firm is able to capitalize on the benefits of its massive size, through economies of scale which enables the firm to reduce cost. Also, through economies of scope, this allows the firm to share industry best practices and knowledge across different regions.
In term s of the firm’s corporate-level cooperative strategy, BNP engages in a synergistic strategic alliance by becoming a member of the Global ATM Alliance, which is a joint venture of several major international banks that allow their customers to use their ATM cards or credit cards at any bank within the alliance while avoiding the standard surcharges. Moreover, In order to correct a lack of face-to-face interaction with loyal customers taking preference to web banking, BNP developed "James". This remote relationship manager service was created in order to provide the mass-affluent customers with”dedicated direct relationship managers located at a contact centre". This solves the time constraint they feel is caused by physically visiting their local branch.
BNP Paribas has a sound value chain. They do extremely well in product and service development, implementing good marketing vehicles to gain accurate market knowledge and best practices in each segment they operate. Back-end processing is also very cost efficient and allows for price flexibility and a competitive advantage. Their expertise in risk management (Credit controls, CRM expertise) enables the bank to charge higher premiums, while managing their NPLs. However, there is significant room for improvement in their distribution and technology sector. They need to enhance their online banking and cross-selling ability for expanding branch networks and distribution platforms. This will improve direct access to customer base.
In relation to their corporate governance, the firm has decided to separate the functions of Chairman and Chief...

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