Case Report Banque Accord

Table of contents

1. Banque Accord...............................................................................................................3
2. Problem Definition.........................................................................................................3
3. Analysis..........................................................................................................................4
3.1 Extend services.............................................................................................................4
3.2 Expand markets............................................................................................................5
3.3 Engage customers.........................................................................................................6
4. Conclusion .....................................................................................................................7
5. Appendices.....................................................................................................................8
6. References......................................................................................................................9

1. Banque Accord
Banque Accord is a fully-owned subsidiary of the Auchen mass retailer group. Being a bank with backing from a huge retailer has given Banque Accord unique opportunities to tap on such as the ability to better communicate with consumers and retail partners through Auchan and given the Banque an innovative mindset. Though the bank has distinguished itself from other competitors, it still emphasizes on being strongly customer-oriented and has positioned itself to be the “bank for consumers”. With the onset of new developments in the financial industry, Banque Accord is looking to be the innovative leader in the industry as it leverages on these developments for increase profitability and growth. Concurrently, as changes are made to Banque Accord’s business model, the company has to continuously whether it can differentiate itself and resonate with its customers at the same time.

2. Problem Definition
A few key issues are impeding Banque Accord from reaching its desired state of increased profitability, growth and being customer-oriented. Firstly, the development of new financial tools like mobile telephone payments and e-business could potentially erode the profitability of one of Banque Accord’s current core products, payment cards. The increased convenience that mobile payments provide could see customers switching to away from payment cards to the former. Secondly, the Europe-wide shift to direct interoperability of financial transactions puts Banque Accord’s growth at risk. Reason being the removal of this barrier to entry would give foreign competitors more opportunities to encroach into Banque Accord’s current customer base. Thirdly, as innovations in the financial industry are easily copied, Banque Accord must assess how it can carve a niche in the minds of customers and remain customer oriented.
In order to give recommendations to the threats and opportunities Banque Accord is facing, the paper focuses on the following problem statement: How should Banque Accord sustain its competitive advantage, taking into account the developments of the financial sector and the changing needs of customers?

3. Recommendations
Banque Accord needs to take strategic steps to develop relevant financial products to increases profitability, compete effectively in appropriate financial markets for greater growth and find ways to be customer oriented and maximise its value offering to customers. To achieve this, we propose to use a three pronged strategy three “E” that will allow Banque Accord to overcome the issues it is currently facing.
Extend Services: By extending its service line in the direction of new developments that meet customers’ needs, Banque Accord can addresses the problem of new developments taking away its customers and this also aids in increasing profitability. In particular Banque Accord should extend into mobile financial services and e-business through strategic partnerships.
Expand Markets: Expanding into markets that have long-term potential would allow Banque Accord to address the problem of competition entering its current markets and increases its market share as it actively reaches out to more customers. In particular, Banque Accord should expand by entering the developing market of China through co-branding.
Engage Customers: Engaging the customer and fulfilling their needs would address the problem of competition taking away Banque Accord’s differentiating edge as being market-driven would allow Banque Accord to create resonance with its customers. This would be done through upgrading human resource to build lasting relationships with customers.

4. Analysis
In the following section, the three recommendations will be analyzed in more depth by focusing on three aspects of the value chain: value definition, value creation, and value delivery. It is imperative that any recommendation Banque Accord uses is executable in every part of the chain and coincides with the company’s resources managerially and operationally.

4.1 Extend Services
Value definition: Market research (Digi Press Release, 14/03/2010) indicates that consumer's preference for payment convenience especially in online and mobile activities increases substantially. In order to sustain its competitive advantage, Bank Accord should response to those shifts in preferences by expanding its offering towards online and mobile financial services. The recommendation to follow this trend is based upon Banque Accord's outstanding resources in pioneering technology related bank services. Therefore, the expansion is consistent with Banque Accord´s strategy and allows Banque Accord to sustain its loyalty of "friends" and increase its percentage in the overall market (see RLM matrix, Kasper et al, 2006).
Value creation: In order for Banque Accord to expand its offering towards online and mobile financial services, it is beneficial to engage in strategic partnerships within the mobile phone industry and the e-business. This would increase its reach reduce its entry barriers and risks (Bartlett et al, 2008). The mobile phone operator Vodafone is preferred as its network has expansed into other European markets. Orange would be an alternative, as it is a major player in France; however it is less dominant than Vodafone in other European markets. Regarding e-business it would be beneficial for Banque Accord to cooperate with various online retailer across like Amazon, Dell, and Argos (Appendix 1). Moreover, Banque Accord should increase its capabilities in the field of online business to ensure a reliable and high quality service (Kasper et al, 2006)
Value delivery: By expanding its offering towards online and mobile financial services Bank Accord needs to take care of adequately communicate and support the new offerings along its service profit chain (Kasper et al. 2006). Sales forces need to be trained extensively and help tools, like FAQ´s and call canters should be established, to ensure service quality (Kasper et al, 2006). Moreover, the new services should be complemented by loyalty and reward programs similar to the ones of the stationary retailers.

4.2 Expand Market
Value definition: By examining the different buying behaviours of customers in different markets there is an especially strong strategic fit between customers in certain markets who prefer to use bank cards and a large amount of credit with Banque Accord’s own resource of issuing payment cards and offering consumer credit as this is what its current business model has developed exceptionally.
Value creation: The market that stands out is China where “the number of credit cards in circulation in China is anticipated to reach 100 million” in 2007 and average outstanding credit is 4460 € (Appendix 2). Banque Accord should co-brand credit cards with the Shenzhen Development Bank which has a wider credit card user base. With this partnership, the company can create value for Chinese customers by allowing these credit card owners to have discounts at its 17 Auchen outlets in China which looks set to increase (Reuters 2007). Despite the EWS, the European market is less favoured to China because developed markets which Banque Accord is not in like Britain have stiff competition and less developed markets like Hungary have less growth potential as compared to China.
Value delivery: As mentioned, customer proximity is one of Banque Accord’s core elements. By having a physical presence through Auchen outlets in China, Banque Accord can better build customer relationships through this added communication channel of personal interaction by setting up booths in retail outlets.

4.3 Engage Customers
Value definition: According to the service logic discussed by Grönroos, C., (2006) there is an increasing number of interactions between customer and marketers in the marketplace. Therefore it is important for the company to facilitate these encounters and satisfy the customer to influence their perception about the company positively. The recommendation for Banque Accord to evolve in an even more customer oriented company is derived from this shift from good logic to service logic (Vargo & Lusch, 2004). This goal can be accomplished by adopting a focus strategy, which relates to "the ability to chose a clear group of customers and narrow their focus to (a combination of low cost, high quality and strong focus) to dominate the market" (Kasper et al., 2006).
Value creation: To be able to enhance a consumer-oriented approach Banque Accord has to treat its slogan ‘the bank for consumers’ as a mantra and communicate this message to the consumer throughout the whole service profit chain (Kaper et al., 2006). First, should implement a focus strategy by clearly defining its target customer. Secondly, Banque Accord should use their of market sensing and develop dynamic capabilities (Hooley, 2008) to take track of changes in preferences of their target customers. Third, Banque Accord should try to exceed customers’ expectations of services, which leads to customer satisfaction and further to customer loyalty (Kasper et al, 2006).
Value delivery: Important interaction points are Banque Accords’ channels of recruitment and customer service which are in-store at retailers of the Auchan group, call centers and the Internet. By offering valuable products and providing excellent service Banque Accord should establish a relationship with its customers in order to understand them and make them repeat-customers. Moreover, to interact with consumers at high quality levels Banque Accord should focus on its human resources which play a major role in training employees that are skilled to represent Banque Accord at customer interaction points.

5. Conclusion
The major problems identified that impose threats and opportunities on Banque Accords current business model can be best negated and exploited by extending its services, expanding into new markets and engaging its customers. Coupling external strengths with external opportunities should lead to a competitive advantage, which allows Banque Accord to gain non financial and financial profits (Kasper et al., 2006).

6. Appendices
APPENDIX 1

APPENDIX 2

7. References * http://www.retail-index.com/HomeSearch/RetailersinEuropedatabaseEnglish/
Top10InternetRetailersinEurope.aspx
* http://www.banktech.com/blog/archives/2007/06/mobile_payments.html * http://www.myhphone.com/news/digi-teams-up-with-paypal-ipay88-for-online-payment-convenience/ * http://www.mercatoradvisorygroup.com/index.php?doc=International&action=view_item&id=213&catid=14 * http://www.reuters.com/article/idUSPEK2623820070709 * Kasper, Hans, Helsdingen, Piet van, and Mark Gabbott, Services Marketing Management, a Strategic Perspective, John Wiley & Sons, Chichester, 2006, 2nd edition * Bartlett, C., S. Ghoshal and P. Beamish (2008). Transnational Management in Cross-Border Management, Fifth Edition * Christian Grönroos (2006), “Adopting a Service Logic for Marketing”, Marketing Theory, 6 (3), 317-333 * Hooley, Graham, Piercy, Nigel F., and Brigitte Nicoulaud, Marketing Strategy and Competitive Positioning, Prentice Hall, Harlow, 2008, 4th edition * Stephen L. Vargo and Robert F. Lusch (2004), “Evolving to a New Dominant Logic for Marketing”, Journal of Marketing, 68 (January), 1-17