BLUE OCEAN STRATEGY CHAPTER 5: REACH BEYOND EXISTING DEMAND Team 5

advertisement
BLUE OCEAN STRATEGY CHAPTER 5: REACH
BEYOND EXISTING DEMAND
Team 5
Micah Decuire, Kendra Kimberlin, Dylan Blase,
Skylar Bogle and Daniel Uribe
Whole Foods’ Strategy for Luring Millennials: Be a
“Super Cool Hang”
•
Reaching into untapped markets by appealing to their interests
•
Tattoo shops, “hipster-y florists”, vegan restaurants, pet shops,
barbershops, etc.
•
Offering products within their feasibility range
•
Staying true to their values and standards
•
Create an atmosphere where people want to stay and spend time
•
Offer more variety in products and services
Three Non-Customer Tiers
First Tier:
“Soon-to-Be”
Customers closest to
your market
Second Tier:
“Refusing” Non
Customer who
consciously
choose against
your market
Third Tier:
“Unexplored” NonCustomer Furthest
away from market
First Tier Non-Customers
Pret A Manager fast casual
• Buy products out of necessity
• Will leave industry if given alternative
• One cause of stagnation within a
market
• Noticed professionals were opting to
not eat in restaurant
• Speed, price, and quality matter
Second Tier Non-Customers
JCDecaux sports retailer
• Refuse to use current market offerings
• Adapted outdoor advertising
• Offerings are unacceptable
• Was able to attract customers from
• Offerings are outside of customers
means
transit/central areas
Third Tier Non-Customers
US Defense Aerospace
• Never considered industry offerings
• Unexplored customers
• May not be targeted
• Gathered commonalities to create a
plane that catered to every need
• Considered most important
characteristics of a plane
• Found a way to build one plane to take
care of all needs
GENERAL BANKING SERVICES & PERKS
• Types of accounts: Savings, Checking, Money market, & Certificate of Deposit
Accounts
• Types of lending: Mortgage, Auto, Business, Student, & Personal Loans
• Additional Perks can include: Credit cards, ATM, Online banking, International
banking, account opening incentives, rewards for referrals, notary services,
credit score monitoring & identity theft notification
•
There are several strengths that set Wells Fargo apart from their competitors:
• Cross-Selling
• Low Funding costs
• Strong Net Interest margins
•
Then there are things that Wells Fargo needs to work on…
• Technology
• International Banking
• Containing Risks
• Human Resources
•
http://marketrealist.com/2014/10/why-low-funding-cost-an-advantage-for-wells-fargo/
CROSS-SELLING
•
Wells Fargo is the bank that’s most successful at cross-selling. None of its competitors—JP
Morgan (JPM), Bank of America (BAC), or Citibank (C)—even come close to it.
•
In order for Wells Fargo to do this they sit down and figure out exactly what the customer
needs and potentially could want in the future. This allows customers to see the benefits of
other products and increases loyalty which translates to personal marketers for Wells Fargo.
•
Cross selling is important for three main reasons:
• It’s cheaper than new customer acquisition: It costs a bank much more to acquire
customers than to sell to an existing customer.
• It improves customer retention: Cross-selling means a customer gets a number of
services from you. This leads to a longer and deeper customer relationship.
• It increases revenue per customer: More cross-selling means more revenue from the
same customer.
LOW FUNDING COSTS
•
The cost of deposits is an important cost for the bank. If a bank is able to keep its cost of
deposits low, it will have a competitive advantage.
STRONG NET INTEREST MARGINS
•
The net interest margin is the difference between interest income generated by loans and interest paid
on deposits divided by their total assets.
•
A high net interest margin is very important for banks. It’s important for two main reasons.
•
High net interest margins indicate that a bank is able to earn more profits on the loan it gives.
•
High net interest margins help a bank have a higher level of cushion on a loan. If the economic
cycle turns decreases and insolvency increases in the future, higher net interest helps banks
absorb a higher degree of shocks
Top 3 Competitors: JPMorgan Chase & Co., Bank of America Corp, Citigroup Inc.
J.P Morgan Chase
Strengths:
• Strong brand name
• Global presence that employs over 250,000 people
• Good brand visibility in the Business-2-Business segments
• Largest bank in the US in terms sales, market value, assets and profits
Weaknesses:
• Stiff competition from other financial institutions
Attracting Non-Customers
• Offering Global banking with services such as: Foreign exchange, Multinational banking,
Global Trade
• Offering different types of accounts targets to 13-24 year olds
• Advancements in banks services: EMV Card and partner with Apple & Google Wallet
Bank of America
Strengths
●
●
●
●
Strong Brand Name
Largest Financial holding based company in all of the United States.
Good financial position
Bank of America serves clients in more than 150 countries and has a relationship with 99% of the
U.S fortune 500 companies
Weaknesses
● Net interest is declining
● Asset quality declining
● Stock is declining
Attracting Non-Customers
● Paired with Apple Pay
● Strong Brand name attracts customers
Citigroup Inc
Strengths:
•
Employs 265,000+ employees
•
4th largest world bank with $906B in total deposits and $1.73T in total assets
•
200 million customers in 140 countries
•
Citi Branded Cards is one of the world’s largest credit card issuers
•
Systemically important financial institution (Too Big To Fail business model)
•
Serves ~85% of the world’s fortune 500 companies for Treasury and Trade Solutions (TTS)
Weaknesses:
•
Involved in numerous scandals, not trusted by the public
Attracting Non-Customers
•
One of the largest providers of consumer and commercial credit card products, services, and retail
solutions
•
Treasury and Trade Solutions (TTS) dept provides cash management, trade and securities services to
companies, governments, and other institutions.
Download