Alpen Bank Case Study Essay

3. What are the consequences of Capital One’s IT strategy for expansion into different segments of the credit card industry, and into other industry’s?

10. Visit the website for a large bank or credit card company, and learn about a type of credit card being offered by the company. Describe at least four features of the card and where you got this information. (3-6 sentences. 2.0 points)

This will not only retain the existing customers but will also attract new ones to increase the customer base to optimal level.

With the upward flow of money, the quality of life improves because of the result of it. New houses, new market centers, new schools, and new products are all part of a country that has a surge of mass consumption. (From Town Center to Shopping Center)

* Capital One can address a much wider group of potential credit card customers, offering credit facilities to individuals who traditional card companies regard as high risk

Richard Fairbank and Nigel Morris, both diligent entrepreneurs, started laying the bricks for their eventual successful company, Capital One, in the late 1980’s. They both worked in the Virginia-based “Signet Bank”. Fairbank started noticing trends in the financial industry that he felt Signet was missing out on. These opportunities were in the credit card industry. He, as well as all of Signet Bank knew that the credit card industry was very risky, but Fairbank was ready to take a chance in this, what can be, highly profitable field.

Income inequality in the United States has been increasing gradually as from the 20th century where there was economic stability. It is estimated that around a quarter of the American worker population receives not more than $10 in an hour. Through this condition, it creates an income that is below what the federal poverty level demands. Those who receive low income include the fast food employees, cashiers, nurse's aides and many more. Other individuals get good payments which are above $10 per hour. Wealth inequality in America is quite common as there are those who are the major economic block and those who can’t afford even the three meals in a day. The social issues that income and wealth inequality might cause in the United States include poverty, household debts becoming high, high crime rates, no health insurance for the low-income families, high mobility rates, high crime rates and school dropouts.

Attitudes about spending changed drastically. At this point, more people had access to credit cards because credit card companies stopped limiting their customer base to the wealthy, and began issuing cards to people with moderate to low incomes (Garon, 2012, CNN World). This gave Americans a way to purchase goods and services immediately, even if they didn’t have the cash on hand. The seven to eight percent savings rate maintained in the United States from the 1960s to the 1980s plummeted to less than two percent, and remained so until the first decade of the 21st century (Melicher & Norton, 2014, p. 168).

What are the consequences of an information-based strategy for expansion into different segments of the credit card industry and into other industries?

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

The sector offers a considerable barrier to new entrants due to the high capital required to establish a new bank. As banking is professional services type required high creditability, strong brand presence is the key obstacle for newcomers.

American Express has plans to establish some more companies in other parts of the world which compares with the recommendations offered for the next three years, since it is recommended that the organization should establish other branches in different areas with an aim of attracting a large market share. The recommendation of advertising also compare with that of American Express since they have a plan to identify online services to attract many customers. American Express also considers partnership with other organizations which will

Bank credit cards have short-term benefits to consumers. They are a convenient way for consumers to be able to purchase items, pay bills, go on vacations, etc., without having the necessary funding for those things at the time of the transactions. The credit cards also benefit the banks that profit form the interest and late fees that consumers have to pay. In the long-term, consumers often find themselves in sever debt due to unmanageable spending habits. Thus, creating situations where very few banks and consumers profit from the use of the credit cards. So for some it has long-term benefits but for many others there is not.

Citibank should launch the card product in Asia for several reasons. Firstly, Citibank can ride on the rapid economic development in the region via credit card products. Secondly, it is also an excellent way to overcome distribution limitations imposed on foreign banks in the region. Thirdly, it allows Citibank to expand its customer base from the upper income segment to include the rapidly growing middle-income households, which is consistent with its global growth strategy and mission in Asia Pacific. Fourthly, by introducing credit cards, Citibank will be able to cross-sell other product lines such as Auto Loans and Ready Credit

In 1996, Citibank was an emergent banking institution attempting to increase its market share in the competitive Los Angeles area. In order to do so, the bank’s strategy was to focus slightly less on their financial growth, and much more on providing “a high level of service to its customers”. Management viewed this paradigm shift as “critical to the long term success of the franchise”.