15 - CIBC & Barclays

15 - CIBC & Barclays - Case 15 CIBC - Barclays...

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Case 15 – CIBC - Barclays RECOMMENDATION We have recommended that CIBC and Barclays should merge their operations. Merging operations would allow both banks to cover a range of products and over more markets. Since CIBC specializes in retail banking and Barclays in corporate and offshore banking, the merger would benefit both since the combination would be a specialization in all three areas of banking. The competitive strategy for both banks is similar, differentiation, and thus there would be a strategic ‘fit’. Since CIBC has strong brand image, excellent relationships with government and Barclays has strong client relationships with customers the merger would benefit both parties. Currently there is no obvious competitive advantage, a combination of their resources along with their improved differentiation strategy could put them at a competitive advantage. Lastly, with the combination of their human resources they would gain the most market share, and their financial resources indicate similar total assets, and a technology system (ICBS) that would be utilized to its full efficiencies, benefiting both CIBC and Barclays, since their current system is outdated. A merger would allow for firm-level economies of scale as well as the product innovation and scope that both banks are looking for. RATIONALE Objectives for both banks: improvement in customer service. Maximize cost effectiveness to improve market position against competition Barclays’ objectives: organic growth of corporate and retail presences, focus on increased share of
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15 - CIBC & Barclays - Case 15 CIBC - Barclays...

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