Capitec
Principles of Strategic Management – Capitec Case Analysis
1) Capitec had the capability to identify a potential gap in the market for unbanked lower income individuals at a time when competitors were not acting on this. Capitec identified flaws in the current banking industry, with the customer’s perception of banks being that of high fees, poor customer service and lengthy procedures (Pitman, 2011). The cornerstone of Capitec’s success lies in their awareness of the importance of knowing their customers. They were able to differentiate their products from competitors by using this knowledge. By knowing what their customers wanted from a bank and knowing the banking characteristics of their customers they were able to offer customers what they were looking for in a bank. They focused their strategy on Affordability, Accessibility, Simplicity and Personal Service.
A resource that aided in Capitec’s success was the owners finance and banking knowledge. All founding members of the company had previous experience in banks and were able to bring different insight to Capitec from their different companies. There was also capital invested into the company that enabled it to develop the infrastructure to become a full functioning bank. Another resource Capitec had was their secure banking facilities and knowledgeable staff. This attracted microlending customers as they saw the bank as being less risky compared to the loan sharks who customers would usually go to for short term loans with many dangerous consequences if the money wasn’t paid on time. Capitec also developed strong alliances with other companies such as Pick n Pay where clients were able to draw money therefore less ATMs were needed.
Capitec also became successful as it was able to stay ahead of competition with new technology that enabled it to go paper-less, therefore requiring less administrative and office space. The bank also operated for longer hours than competitors which was appealing to
1) Capitec had the capability to identify a potential gap in the market for unbanked lower income individuals at a time when competitors were not acting on this. Capitec identified flaws in the current banking industry, with the customer’s perception of banks being that of high fees, poor customer service and lengthy procedures (Pitman, 2011). The cornerstone of Capitec’s success lies in their awareness of the importance of knowing their customers. They were able to differentiate their products from competitors by using this knowledge. By knowing what their customers wanted from a bank and knowing the banking characteristics of their customers they were able to offer customers what they were looking for in a bank. They focused their strategy on Affordability, Accessibility, Simplicity and Personal Service.
A resource that aided in Capitec’s success was the owners finance and banking knowledge. All founding members of the company had previous experience in banks and were able to bring different insight to Capitec from their different companies. There was also capital invested into the company that enabled it to develop the infrastructure to become a full functioning bank. Another resource Capitec had was their secure banking facilities and knowledgeable staff. This attracted microlending customers as they saw the bank as being less risky compared to the loan sharks who customers would usually go to for short term loans with many dangerous consequences if the money wasn’t paid on time. Capitec also developed strong alliances with other companies such as Pick n Pay where clients were able to draw money therefore less ATMs were needed.
Capitec also became successful as it was able to stay ahead of competition with new technology that enabled it to go paper-less, therefore requiring less administrative and office space. The bank also operated for longer hours than competitors which was appealing to
References: Dixon, P. (2012). Mobile Payments - Future Of Banking And Shopping, Retail, Telecom Retrieved 16 July, 2013, from http://www.globalchange.com/future-of-mobile-banking-and-mobile-payments.htm Hough, J., Thompson, A., Strickland, A., & Gamble, J. (2008). Crafting and executing strategy: south african edition: Berkshire: McGraw-Hill Education. Lehobye, N. M. (2012). Perspective on entrepreneurial development through banking industry: Strategic management on inflation rate currently affecting South African Reserve Bank (SARB). African Journal of Biotechnology, 6(25), 7593-7600. Moody 's Investors Service. (2013). Credit Opinion: Capitec Bank Limited. Stellenbosch: Moody 's Investors Service. Pitman, J. (2011). Capitec: Riaan Stassen Retrieved 14 July, 2013, from http://www.entrepreneurmag.co.za/advice/success-stories/entrepreneur-profiles/capitec-riaan-stassen/ Williams, J. (2011). Near field comms: How are mobile payments changing traditional banking? Retrieved 17 July, 2013, from http://www.computerweekly.com/feature/Near-field-comms-How-are-mobile-payments-changing-traditional-banking