Alpen Bank Case Study

In: Business and Management

Submitted By nessalambert
Words 1831
Pages 8
DATE: Oct, 18th, 2013

CASE: ALPEN BANK

CLASS: MBA586

GROUP C:
CHIAWEN ‘TRACY’ CHANG
CHIENYU ‘SHAWN’ HSIAO
DANIEL GUTIERREZ
NING ‘NINA’ BAI
WENSHAN ‘NESSA’ XU

Intro: Having 15 branches in Romania, Alpen Bank, a premium banking service provider is trying to expand its business in Romania and launch its credit card system. Considering the low per-capita income level and low acceptance of credit cards in Romania, we evaluated the profitability of this plan carefully and suggest Alpen Bank to enter the Romanian credit card market and explore the middle class in long run. PEST Analysis: Political • Capital market in Romania is more stable through annex to the European Union and implementation of directives. • The European Legislation to protect investors, safeguard market integrity by establishing harmonized requirements governing the activities of authorized intermediaries and to promote fair, transparent, efficient and integrated financial markets. • Substantial ascending evolution of Romanian capital market since 2004 helped by the government opening it for competition. • No limit of foreign participation in commercial companies (up to 100% ownership in Romania), full repatriation of capital and profit, equal treatment of foreign and domestic investors. Economic • Macroeconomic indicators (GDP, inflation rate, unemployment rate, etc.) registered in the past have not reached a stable point comparing it with other E.U. countries (with a big difference). The process of leveling with them could potentially take a long period of time. • Dependence on foreign capital is growing. • Growing interest rate for credits. Depreciation of local currency directly affects budget of companies and households because debt is dominated by foreign currency. • Last year the main stock…...

Similar Documents

Alpen Bank Case Analysis

...Alpen Bank: Launching the Credit Card in Romania ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- Problem Brief ------------------------------------------------- As Alpen Bank’s country manager for Romania, Gregory Carle was contemplating a credit card launch in Romania market, which he would pursue if he could be confident that it would add 5 million euro in annual profit to the Consumer Bank Segment within two years. ------------------------------------------------- Alpen Bank had developed a reputation for excellence in serving affluent clientele. In addition to basic deposit, checking and personal loan services, customers had access to a wealth management program composed of financial planning and investment products. ------------------------------------------------- Some of the......

Words: 1176 - Pages: 5

Metro Bank Case Study

...Case Study Metro Bank Breaking the Mould but Breaking the Malaise? An assessment of whether Metro Bank, with its distinct model, can bring about a cultural revolution in the UK banking market Authors: Ben Robinson & Thomas Krommenacker As the first new entrant in the UK banking market for over 100 years, Metro Bank is generating plenty of headlines…. UK’s Metro Bank beats target on new accounts Metro Bank works magic on customers Does the first new British bank since the 1800s herald the start of new competition for your money? the established players, despite blotted copybooks, are deeply entrenched ... the barriers to entry are formidable Metro Bank a fascinating case study in what customers really want Metro Bank model backed by banking commission Metro bank opens on Sunday as battle for high street hots up Metro Bank Speeds Growth The UK’s newest bank must show a genuinely creative side beyond the promotional gimmicks dispensed at the opening of the first branch Banking revolution or the emperor’s new clothes? … a challenge to the tarnished incumbents is long overdue. But its American-style “fun” marketing may not be enough to win over jaded British account holders Metro: first bank for 100 years opens its doors. Metro Bank has promised to revolutionise the British banking experience. Temenos Case Study Contents 01 02 Executive Summary History and Background of the UK Banking Market • The Market Today • Consumer......

Words: 8376 - Pages: 34

Alpen Bank

...Date: February 13, 2013 To: Alpen Bank Subject:  Alpen Bank Case To whom it may concern: This is to address whether or not the Romanian market holds any opportunity for Alpen Bank and our credit card services. Based on our analysis, Romania holds opportunity for us to launch our credit card services with potential for growth year after year because of a growing middle class that looks for a better standard of living. Romania’s acceptance in the e European Union should strengthen its economy. Compared to other central and eastern European countries, Romania has the least financial cards per household at 1.2 cards. With the growth that we are expecting, Romania will follow in the footsteps of its neighbors and double the amount of financial cards per household. Alpen Bank should position itself by targeting all customers. Alpen bank has previously only targeted affluent customers as far as its banking sector. Alpen bank card services should be available to all customers with the right credentials in order to grow with the growing middle class. We predict that by targeting all customers, we provide ourselves with a larger target market. Though targeting affluent only customers seems like a better opportunity for the first two years, we are looking long term. Targeting all customers will allow us to hit our $5 million profit target with 142, 248 customers in year one and 146,788 customers in year two. These numbers can be achieved by combining direct mail, take...

Words: 256 - Pages: 2

Alpen Bank

...Carle, Alpen Bank's country manager of Romania, has one week to decide whether Alpen should launch a new credit card in the Romanian market. There are many factors to take into consideration and if it is decided to be launched, Carle also needs to decide how it should be positioned in the market. Situation Analysis Context: Alpen bank had balked at launching a credit card in Romania due to the low usage of credit cards. Transactions were based on cash, but after 2000, by the entry into European Union, the Romanian economy started to grow and disposable income increased dramatically. In 2006, total financial cards grew by 35% compare to prior year. Moreover, required infrastructure (ATMs, point-of-sale terminals) was developed significantly but still the market is underpenetrated. Customers: In Romania, there was a huge income inequality that the top 10% of households by income had almost 24% of the wealth. Credit cards are used mainly by affluent and middle class consumers. Affluent segment consists of career oriented professionals and they are not very price sensitive. On the other hand, there is a big middle class in Romania and it is growing economically. These people are a mix of young professionals and families and they are price sensitive. Also, this segment's card utilization is lower compared to affluent segment. Company: Alpen Bank has entered to Romania in 2000 and since then it is growing in the market and as of 2005 it had 15 branches in the country. The bank......

Words: 1291 - Pages: 6

Alpen Bank

...after the successful implementation of Alpen Bank in Romania in the years 2000, Gregory Carle the country manager is wondering whether Alpen Bank should consider launching a credit card in the market. In order for the launch to be profitable several points have to be clarified such as who would the company target, what would be the positioning of this new card and how should it be marketed. Situation Analysis Context: After a period of recession, the economy in Romania is on a rising trend. The total disposable income of the population has increased and the middle- and upper- middle class is developing as their income is increasing. Consumers: A consumer survey indicates a clear change in the Romanian’s behavior; they are getting more interested in luxury goods and in products coming from the EU. Also, a strong increase of total cards on the market of 35% indicated that consumers are getting more likely to use cards rather than cash. This trend is supported by the fast development of the infrastructure required for a payment system. Even though for now cards are mostly debit ones and used to withdraw cash, as the country economy is growing and the behavior of consumers changing it is very likely that credit cards have their place on the Romanian market. Another important data to consider is the income distribution in Romania which is very unequal as only 10% of the population holds 24% of the wealth. Competitors: The competitors of Alpen bank have already launched the......

Words: 1301 - Pages: 6

Wellfleet Bank Case Study

...Wellfleet Bank face? Wellfleet Bank faces a variety of risk in its daily operations. Risk faced by Wellfleet Bank associated with this case study includes market risk when there are changes in interest rates, exchange rates and other prices. This is especially true for Wellfleet Bank because they are considering a $1 billion loan to Gatwick Gold Corporation (GGC), a South African gold producer. Additionally, operational risk are linked through Wellfleet Bank's daily activities that include auditing, monitoring and support systems. An example of operational risk for Wellfleet Bank would be when the group head of client relationships and the deputy group chief risk officer disagreed over a proposal, then the Chief Credit Officer would take the ultimate decision. Credit risk will be directly and indirectly affected by exchange rates, interest rates and gold prices. Moreover, foreign exchange risk and country or sovereign risk would directly impact Wellfleet Bank's operations because it is an international organisation that has expanded operations to 78 countries (Lange, Saunders, Anderson, Thomson & Cornett 2007, pp. 96). Other risk faced by Wellfleet Bank includes interest rate risk when maturities of its assets and liabilities are mismatched. Off-balance-sheet risk as a result of their contingent assets and liabilities. Technology risk when there are technological investments. Liquidity risk when they are sudden surge in liability withdrawals. Insolvency risk when Wellfleet......

Words: 1250 - Pages: 5

Alpen Bank in Romania

...Alpen Bank In Romania Question 1 By taking a look at table A that is provided in the case study you can see that they created a Net revenue impact table. On it, it shows that the lowest income they are looking for in a household is €3,000, and that from €3,000-4,500 is listed as middle class. If we then look further down we see Exibit 5 witch lists the Annual income in Romania and we see that 18.2% of Romania’s population would fall into this middle class range. Now if we do the same for the group table A has listed as Affluent, €4,500-6,000, we find that 15% of the population falls into this category. And finally if we add up all the households that make over €6,000 a year, listed as most affluent, we find that 12.9% of the total population goes in this category. So it looks like only 46.1% of Romania’s total population has enough income to afford a credit card at Alpen Bank. Out of the 46.1% of the total population that can qualify for a credit card 39.5% is made up of the middle class (18.2/46.1=39.5%). Table A also lists the annual revenue that would be made from card holder in each class, and it shows that an individual in the middle class would make €60.63. So 39.5% of their credit card income would be €60.63. Using the same process we can find that the Affluent, (15/46.1=32.4%), would make up 32.4% of their income and produce €123.38 per card holder. And the most affluent would compose 28% (12.9/46.1=28%) and each card holder in this bracket would produce €209.75......

Words: 1523 - Pages: 7

Jyske Bank Case Study

...Case Study #1: People, Service, and Profit at Jyske Bank Michael Cox MBAC 633-01 September 4,2014 Michael Cox MBAC 633-01 09/04/2014 People, Service, and Profit at Jyske Bank 1. Jyske Bank’s core values are rooted in treating its "three groups of stakeholders-shareholders, customers, and employees-with equal respect.” Jyske bank does this through: Common Sense, Being Open and Honest, Being Different and Unpretentious, Displaying Genuine Interest and Equal Respect for People, and Being Efficient and Persevering. 2. “First, you tell people what’s expected. Second, you check on their behavior. If they are buying expensive wine, you ask, “Why?” You explain what makes sense, and why. You do it in a way that tells them you honestly want to help them improve. Third, if there are continued problems, this person may not be right for the bank.” This quote refers to the philosophy of empowering the bank. This means that employees not just managers should make decisions if they are comfortable with them. The quote above refers to meal and entertainment expenses incurred on travel or with clients. Letting employees decide what is appropriate to expense allows them to feel in control. If the employee does not understand what is appropriate they may not be the type of employee for Jyske Bank. 3. Jyske Bank’s new “positioning” or competitive differentiation strategy is considered “Jyske Differences”. This is a focus moving from traditional product selling to......

Words: 1022 - Pages: 5

Alpen Bank

...ALPEN BANK CASE By 11/06/2014 TO: Gregory Carlyle FROM: XYZ RE: Alpen Bank: Recommendations for new Credit card Business in Romania DATE: 11/06/2014 Mr. Gregory Purpose: The purpose of this memo is to report my observations after careful analysis of economic opportunity of credit card business for Alpen Bank in Romania Recommendation: After thoughtful research, I would recommend you that starting a credit card business for affluent and most affluent will be more profitable. The break-even point, return of investment and profits after breaking even are all favorable for Affluent classes alone. Analysis: I have started with my analysis of customer acquisition. Keeping in mind the importance of publicity for a successful launch of credit cards from our bank, I went ahead using all the modes of publicity. After careful calculations (Seen in Exhibit 1 and 2) of customer acquisition, I came up with the cost per customer value. To begin with, the cost per customer for affluent population alone is less compared to all customers. Having decided to check the feasibility of starting the credit card business for both middle class and affluent or just for the affluent class, I calculated the weighted revenue of these classes. (Exhibits 3 and 4). It is clear that the revenue from affluent class alone is about 40 Euros higher. Then I proceeded in calculating the Net profit for a customer size of 50000, 100000 and 150000 individually for two cases.(Exhibits 5 and 6)......

Words: 402 - Pages: 2

Case Study: Ethical Banks

...Cason Keith ALED 424 3/10/15 Boyd Case Study 2: Ethical Banks Moral objectivism is the view that what is morally right or wrong depends on what someone thinks. Jay McGuane had put together a very diverse board of people with many different backgrounds and beliefs. This led to each of them having very different moral values. Some of them saw no problem with giving the loan the gun manufacturer, while others were extremely opposed. They each saw it differently because of their own personal beliefs. So moral objectivism was very apparent on the bank’s board of directors. In “Good to Great” Jim Collins talks about getting the right people on the bus before going anywhere. The right people are what is going to make it all work. Jay McGuane didn’t get the right people on the bus first and didn’t have an established direction so it made things very difficult. His board of directors were all way too different in their beliefs and they would never be able to agree on much of anything and there weren’t any clear guidelines to direct their way of thinking. Jay needs to go back to the beginning and get the right people on board so he can get where he wants to be. There really aren’t many defined values of Rocky Mountain Green Bank. They want to promote environmentally friendly and green companies, projects, and corporations but doing business with just those companies is not profitable. Other than that, there is no real business direction because Jay McGuane never laid......

Words: 440 - Pages: 2

Alpen Bank Case

...AIMILIA FOTIADI Launching the Credit Card in Romania. My first write up case . 1-) Romanian Credit Card Market Until 2006 any kind of discussion about launching a credit card in Romania market seemed uninteresting and a risky distraction . That because the per – capita income level was low almost , 1.700 euro , here was not infrastructure of point – sale terminals , and there was minimal experience with consumer credit .The middle class was growing but it was very small and less than 50 % of the population was urban . After the 2006 and the country’s entry into the European Union the macroeconomic trends in Romania were encouraging. * Middle and upper – middle class had importantly increased its total disposable income . Exhibit 5. (11.9% + 18.8% +18.2% ) of population has annual income from 1.500 to 4.500 Euro. * Increase of the households percentage ( over one – third of Romanian households ) that were interesting in purchasing branded imports from EU and in the big cities like Bucharest a strong tendence toward luxury goods. * Increase rate of people that were interested in using cards instead of cash ( in 2006 a growth of 35 % over the 2005 ) and about 9.5 million cards that circulated in Romania . * The development of the infrastructure that was required for a payment system ...

Words: 1070 - Pages: 5

Case Analysis for Alpen Bank

...Case Analysis: Alpen Bank The main issue that Alpen bank is facing is whether or not they should launch the credit card business in the Romania market and which group of target audience they should select while applying the launching strategy. Moreover, specifically to Carle, he needs to come up with a program from which, Alpen bank can generate at least €5 million in profit within 2 years. Moreover, clarified positioning strategy and customer segmentation is also needed to secure the success of the program. In the case, it seemed that Alpen had the opportunity to act since economic environment in Romania had changed from 2006 after its entering into the EU: the economy there was developing; a growing trends of luxury purchasing emerged; there was also an increasing likeliness of using card instead of cash; other competitors had already taken similar strategies in the market; Alpen’s traditional banking business had a great penetration throughout the country, etc. However, such a growth was not enough compared with other countries of the region. Besides, to launch the credit card business in Romania might be risky and do harm to the customer base. Then what should Alpen do? According to the charts 4 & 5 in the appendix, regardless the target audience, launching credit card business in Romania is profitable with the premise that if the customer base is big enough. (All the calculations in the charts were based on revenue potential and acquisition costs.) Comparing......

Words: 2151 - Pages: 9

Maquire Bank Case Study

...Macquarie Bank Case Study Macquarie bank case study is the study related to the dynamic change occurs in the organization. It focuses on the changing interventions, business strategy and change in the HR Practices to be followed. Macquarie is the bank present in the Australia. And what changes occurs strategically in this relatively small banking organization. This case study deals with the various aspects of the organization and complexities and transition occurs in relation to other departments and economic factors. Business strategy, Change strategy and human resources practices are knitted together in an organization and have a great impact in overall structuring and functionalities of an organization. Not only will this approach of change being run in organization have a powerful impact on the appropriateness of HR interventions and practices in particular divisions or strategic business units. So understanding an organization’s change strategy is as critical to study as its human resource practices and its business strategy. Q1. Discuss the overall structure of the organization and then changes it felt after deregulation? Macquarie Bank is a relatively small organization in an Australian Market. Stating about the structure its function based on the collegial partnership system. It has some kind of units that can take autonomous decisions. It does not have a well developed Human Resource in an organization. Each of the units is well structures and inter-linked with......

Words: 322 - Pages: 2

Alpen Bank

...growing trend in purchasing luxury goods and increasing likeliness of using card. Although Romanian banks has already been marketing in the business, other competing banks are bullish the market (Exhibit 4) and it is hardly for them to take the same strategy in the near future. With the premise that top 10% of households by income have nearly 24% of the wealth (Exhibit 5), launching credit card business is profitable in the long term. Affluent are less price-sensitive to annual fees and are more likely to use cards with great frequency. Revenues generated by annual fees and interchange are sustainable, for affluent customers in emerging market are more sticker than in developed market. (Alpen bank should position its credit card as a high end premium product as its existing customers belong to the affluent class and it would be easier to establish itself in this segment. Furthermore this class represents the top 10 % of population which has about 24% of wealth. They are less price sensitive andmore conscious of their image so positioning the card on high end would be beneficial for the bank. This segment includes professionals who would like to purchase products and services through credit card considering it a status symbol. Moreover, for countries like Romania, it is seen that credit cards are somewhat stickier as compared to the developed countries. This shows that if Alpen positions its card as a high end product, it will gain a share of market which would stick to its......

Words: 540 - Pages: 3

Case Study: Bank of America

...Case Study: Bank Of America  How it learned that what customers really want is to Keep the Change  THE PROBLEM  Innovation in services is rare. In financial services, the last big breakthrough was online banking, nearly a decade ago. In October, 2005, Bank of America (BAC ) brought out a radically different product that broke the paradigm. It's called Keep the Change.The cocept solves a critical banking problem -- how to get consumers to open new accounts. The product works like this: Every time you buy something with a BofA Visa debit card, the bank rounds up your purchase to the nearest dollar and transfers the difference from your checking into your savings account. It also matches 100% of transfers for the first three months, and 5% of the annual total, up to $250 a year. Since the launch, 2.5 million customers have signed up for Keep the Change. Over 700,000 have opened new checking accounts and 1 million have signed on for new savings accounts. THE RESEARCH  How did Bank of America create Keep the Change? In the spring of 2004, it hired an innovation and design research firm in Palo Alto, Calif., to help conceive of and conduct ethnographic research on boomer-age women with children. The goal was to discover how to get this consumer segment to open new checking and savings accounts. For the next two months, a team of five BofA researchers and four researchers from a West Coast consulting firm visited Atlanta, Baltimore, and San Francisco. They observed a......

Words: 812 - Pages: 4