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Faculty of Business, Environment and Society

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).


Globalization 1.0


Globalization 2.0


Globalization 3.0


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 country-based 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 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

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.






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.

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.
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.
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.

Figure 1

The risk management features consists of certain factors:

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

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

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.

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
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

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.
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 trying to make their
current offerings better in the existing market. Their market share although lowered to 18% in
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.

In summary, 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.

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:
4. Porter, M.E. (1980) Competitive Strategy, Free Press, New York, 1980.
5. A Framework for Modeling Organizational Structure, Available from:
6. Porter five forces analysis, Available from: [23 November 2014]
7. (J. Peter Neary, 2007), World Economy FDI: The OLI Framework, Available from:
8. Marios I. Katsioloudes and Spyros Hadjidakis, International Business: A Global Perspective,
France, 2011
9. Figure 1, Risk Management Framework, Available from:
10. Figure 2, Michael Porters Value Chain Framework, Available from:
11. Figure 3, Ansoff Matrix, Available from:
12. Ansoff Matrix, Available from: [27 June 2014]