Alpen Bank: Launching the Credit Card in Romania
Alpen Bank: Launching the Credit Card in Romania
Written Analysis of Case
Presented to: Miss Tania Hassan
Presented by: *
Case Overview:
Alpen bank has to make a crucial decision whether or not they should launch the credit card business in Romania. The bank had to come up with a market strategy that can generate at least €5 million in profit within 2 years. Prior to introduction of the credit card in the market the Bank has to analyze whether an opportunity exists for the launch of the credit card. It has to further decide how to position the card in the market, what should be the target audience for the service. The bank has currently established a premium image by targeting the affluent class.
Core Problem: Whether to launch credit card if it adds € 5million profit to consumer bank segment within 2 years.
The Alpen Bank seems hesitant to launch the credit card due to the existence of following problems: * Low per-capita income levels. * The population seemed inexperience with the usage of credit card. Consumer spending was cash based and merchant acceptance of card payments was low.
Analysis:
Opportunity: Considering the economic and market conditions as explained in the case, Alpen Bank should launch a credit card. It seems that Alpen Bank has an opportunity as economic environment in Romania had changed from 2006 after it joined European Union. The economy there was developing; a growing trends of luxury purchasing emerged, there was also an increasing likeliness of using card instead of cash and lastly other competitors had already taken similar strategies in the market.
The credit and debit card market of Romania is also seen to grow at a good pace of 35% in 2006 and about 9.5million cards were being used in the market. Apart from certain positives there are certain problems in credit card market too. People use cards generally for
Written Analysis of Case
Presented to: Miss Tania Hassan
Presented by: *
Case Overview:
Alpen bank has to make a crucial decision whether or not they should launch the credit card business in Romania. The bank had to come up with a market strategy that can generate at least €5 million in profit within 2 years. Prior to introduction of the credit card in the market the Bank has to analyze whether an opportunity exists for the launch of the credit card. It has to further decide how to position the card in the market, what should be the target audience for the service. The bank has currently established a premium image by targeting the affluent class.
Core Problem: Whether to launch credit card if it adds € 5million profit to consumer bank segment within 2 years.
The Alpen Bank seems hesitant to launch the credit card due to the existence of following problems: * Low per-capita income levels. * The population seemed inexperience with the usage of credit card. Consumer spending was cash based and merchant acceptance of card payments was low.
Analysis:
Opportunity: Considering the economic and market conditions as explained in the case, Alpen Bank should launch a credit card. It seems that Alpen Bank has an opportunity as economic environment in Romania had changed from 2006 after it joined European Union. The economy there was developing; a growing trends of luxury purchasing emerged, there was also an increasing likeliness of using card instead of cash and lastly other competitors had already taken similar strategies in the market.
The credit and debit card market of Romania is also seen to grow at a good pace of 35% in 2006 and about 9.5million cards were being used in the market. Apart from certain positives there are certain problems in credit card market too. People use cards generally for