Term Paper on "CIBC-Barclays the Potential Synergies Obtainable"

Term Paper 4 pages (1035 words) Sources: 0

[EXCERPT] . . . .

CIBC-Barclays Case Study

The potential synergies obtainable through the merger of Canadian Imperial Bank of Commerce (CIBC) and Barclays include the customer service, Information Technologies (it), financial management, and locational coverage advantages each bring to both the western Caribbean and global markets. The potential merger is at a cross-road as the options of either of the two divesting regional operations, choosing to operate autonomously from one another and see if there are evolving economies of scale, or complete the merger quickly and merge together. The biggest challenge in the proposed merger is going to be bringing CIBC's innate ability to serve customers from a process standpoint into the much more advanced it-based processes and systems of CIBC. It can also be inferred from the case that the CIBC culture is moving more aggressively towards automating customer service functions, as they are viewed as a potential source of significant value in attracting new customers and keeping existing ones. From this wide variation in how each company's culture has adapted to it as a source or catalyst of competitive advantage Barclays must stop and consider the implications of this merger on their culture and CIBC needs to consider the challenges of integrating a company that has not yet evolved to the level of performance from both a process and it standpoint that is critical to excel in an increasingly competitive market.

SWOT Analysis

Strengths

CIBC is well capitalized and has successfully participated in an oligopoly through the years of the case study (1995-2001).

Barclays is considered a technological innovator with support for the BRAINS system Interlink connection for the ATM network, Gateways for MasterCard and VISA networks, BusinessMaster online access, and BarclayCall which provides access to information and customer service for retail customers located in the Bahamas and Barbados. Taken together these services significantly differentiate Barclays from its competitors.

Both businesses are well capitalized with CIBC having assets worth $4.6B and Barclays having $5.2B. The merger would create an organization with nearly $10B in total assets.

As the western Caribbean region has increasingly become concentrated into an oligopoly, the merger of both banks will create significant competitive advantage in the region and also globally.

Weaknesses

There is going to be significant fear on the part of CIBC employees about being fired as a result of the merger, as its clear that Barclays has a significantly greater level of efficiency and performance. There could be a major loss of talented personnel unless management works to create a change management program that attempts to keep key personnel in place.

There is no roadmap or overlaying of processes to show how CIBC can be made more effective through integration to the Barclay's systems. Major process and system integration will be required to make the two companies' systems, processes, and ultimately cultures compatible with one another.

CIBC has limited resources and expertise in sustaining their centralization initiatives, and as a result has struggled to close marginally performing branches.

Opportunities

Barclays can actually act as the market consolidator in this specific geography, purchasing smaller and less capitalized competitors and then quickly integrating them into… READ MORE

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