Problem Solution Usa World Bank
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Problem Solution: USA World Bank
Over the last few years the banking industry has experienced intense pressure to identify and launch campaigns for new products both in the United States and around the world. This paper will discuss the problems and solutions of USA World Bank (UWB) whom is a major bank with both an international and domestic presence. UWB has branch locations nationwide and enjoys a large consumer and small business base, and has been successful in several worldwide ventures. However, like all international organizations, UWB feels the need to develop profitable new products that will continue to expand its market share. Though new products rollouts have been successful overall, they have been primarily defined within the United States. (University of Phoenix, 2007)
Situation Analysis
Issue and Opportunity Identification
The issues and opportunity identifications facing UWB are described as follows:
The primary issue facing UWB is the company launches a new product yearly and this year a decision must be made about which product should be implemented. Mary Monroe, Vice President of New Product Development is responsible for deciding which new product to present to the Board. Banks are upping the ante when it comes to rewards programs. By 2010, reward expenditures are expected to reach $18.4 billion, a 15 percent compound annual growth rate from the 2006 level of $10.3 billion, according to research from Aite Group, a Boston-based research and consulting firm serving the financial services industry.
While credit card rewards programs will continue to get the lions share of expenditures, debit card rewards programs are expected to rise from $.4 billion in 2006 to $.9 billion in 2010. Non-card rewards programs are also expected to grow, jumping from $.4 billion in 2006 to $.9 billion in 2010. (Swann, 2007). The competition is fierce in the banking industry; therefore finding unique and profitable products is very difficult.
This year Mary is proposing a credit car that will work like a frequent flier program, where customers can earn rewards as a result of their purchases with the card. The card will be called Instant Rewards.(University of Phoenix, 2007) Mary had Best Market Research conduct some feasibility studies for the Instant Rewards Consumer Credit Card product. According to Best, the Instant Rewards Consumer Credit Card will be successful. Their research indicates that the card could actually move people to switch from their current bank. (University of Phoenix, 2007)
On the other hand, Jim Wilson, Vice President of Marketing Development has increased UWBs small business segment by 40 percent through successful relationship building with small-business organizations and owners. Jim believes he is in accord with this business segment because he connects well with relationship managers like Aaron Anderson, Beth Brown, and Charlie Cousins who have a direct link to the customers. (University of Phoenix, 2007)
Jim wants to implement a Small Business Rewards Credit Card for small business owners. The basis for the Small Business Rewards Credit Card is primarily based on feedback his relationship managers have been receiving from their accounts. Aaron has been told by his accounts that they are considering other banks that have quicker access to capital. He is afraid he may lose 40% of his customers. Beth believes that 30% of her businesses owners have been eagerly awaiting form something that will enable them to easily busy small capital products. (University of Phoenix, 2007)
Jim believes the Small Business Rewards Credit Card is just what the small business owners are waiting for and without it they will leave UWB for banks that are offering what they need – a high-limit card that can be used to purchase capital items. (University of Phoenix, 2007)
Presently there is too much competition within the UWB (specifically between Mary Monroe and Jim Wilson). Currently, Mary is responsible with the approval of Brian Allen, President of New Product Development, to submit a new product. Therefore, Jim must get approval from Mary before his project can be implemented. (University of Phoenix, 2007)
This structure presents a major problem because Mary and Jim are working against one another instead of working together toward the same goal, which is to ensure that UWB continues to be the leader in their industry. Based on the aforementioned, UWB must revamp their corporate structure to dispel the unnecessary competition and enable all the department heads to work as a team toward a single goal.
Banks are upping the ante when it comes to rewards programs. By 2010, reward expenditures are expected to reach $18.4 billion, a 15 percent compound annual growth rate from the 2006 level of $10.3 billion, according to research from Aite Group, a Boston-based research and consulting firm serving the financial services industry.
While credit card rewards programs will continue to get the lions share of expenditures, debit card rewards programs are expected to rise from $.4 billion in 2006 to $.9 billion in 2010. Non-card rewards programs are also expected to grow, jumping from $.4 billion in 2006 to $.9 billion in 2010.
Although the reward strategies has already been decided upon as the current accepted direction for UWB, the steps taken to get a clear perception of the needs of the consumer or the small business need to be revisited. Survey results are vague and have been wrongly collected for the needs of the company initiative. Results from these surveys are skewed and do not give a clear picture into which new rewards program the company should pursue.
Stakeholder Perspectives/Ethical Dilemmas
There are several key stakeholders that will be affected by the decision as to which new and profitable products will be implemented to continue to expand the market share of UWB.
The main stakeholders are the marketing and new product development teams employed at UWB. Their continued employment and the profitability of UWB hinges on the success of these two new business ventures. Brian, President of New Product Development, has had some winning products on the market, but not recently. In fact, his past several initiatives have been only marginally successful, and this year, hes feeling pressure to show some results. Mary Monroe and Jim Wilson do not always see eye to eye on the choices for each years new business product, but need to work together in order for the projects to be successful.
Another key stakeholder is the consumer at UWB. This year, UWB is proposing a credit card that will work like a frequent flier program,