Santander Consumer Finance Case Study Solution
Descriptions of Sensitivity, Risks, Successes, Failures, Contingencies and Strategies
Santander has established itself as a strong financial leading company in the financing sector of Spain and is striving towards the overall growth in getting recognized globally. Globalization by Santander has been a grand success when compared to other financial businesses. It has grown roots in various lifestyles, demographics, and economic sectors. Due to this extreme diversity within the business, Santander has faced several obstacles in their process of decision making. It’s extremely difficult to understand economic and financial sector of different countries. Every country has their own rules and regulations on the financial and banking system. This led to high market entry costs and complicated things. The cost of credit also varied in different countries, and the customers rather felt comfortable with their national institutes, with which they shared the same language and culture. This resulted in lesser trust in Santander policies. Along with this, there are some other uncontrollable factors that couldn’t be managed by the company. They faced cultural risk, since each country has its own way of dealing with things. There is a strong need for research development in order to assess components of each country. The decision of expanding the venture into the new financial market will be made accordingly, by developing the right operational strategy to penetrate the country. For instance different strategies have to be developed for UK, Germany and Italy, since they have totally different concepts when it comes to using credit cards.
Conclusions and Recommendations
Several options are available in terms of choosing the investment market and the new products company must look into. Santander must keep its competitive edge by making new investments and maintaining a stronghold in consumer finance market. Investment in new products such as offering personalized credit, or banking options like savings would be risky. Still diversification in investments is necessary in order to the spread out the different market risks, which pose different reactions to global market happenings.
I would recommend that since the emerging economies like Russia, Brazil, India have shown steady increase in the spending power, the company should consider expanding in these. These can be considered as potential markets for Santander, and banking services, automotive insurance and personalized credit can be offered to them. When spending power increases, people look forward to make an investment somewhere such as purchasing property or vehicles by taking loan on constant rate, this could be an advantage to Santander.
Due to large population, China also provides a large market. If the company can penetrate the automotive insurance in china, it would be a significant achievement. China has car ownership of estimated 200 million, even if Santander manages to acquire 5% of the market, this would mean that in china alone 10 million vehicles would be sold on credit.
Salarich should pursue entrance in these new emerging markets. Introducing new products as per the consumer needs while keeping in view their spending powers. This can strengthen the company. Along with this the company should induct local managers who are competent and experienced, since they know the market well, and are aware of how consumers may react to different products. This would bring significant benefit to the company since the consumer needs will be properly dealt...............
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