1.1 The question requires an assessment of whether or not new digital banks pose a
threat to existing banks. To answer this, discuss the threat posed by new
entrants as well as the barriers to their entry
Threats by new entrants
New digital banks also offer services that banks offer including banking
services, deposits, Cards, withdrawals, transfers, POS.
New digital banks are proving to be more technologically advanced than
incumbent banks and provide quick and efficient solutions
New digital banks also have potential to grow and compete head on with
incumbent banks.
Barriers to entry
Economies of scale enjoyed by incumbent banks
Brand loyalty to incumbent banks
Big market share enjoyed by incumbent banks
High switching costs for customers
Low product differentiation in the banking industry
1.2 Steps taken so far
Presenting plans to board
Announcing new strategy
Management restructuring
Aligning strategy to structure
1.3 Steps that I would take.
Use John Kotter’s 8 steps of strategy implementation
Step 1: Establishing a Sense of Urgency
Step 2: Creating the Guiding Coalition
1
, Step 3: Developing a Change Vision
Step 4: Communicating the Vision for Buy-in
Step 5: Empowering Broad-Based Action
Step 6: Generating short-term wins
Step 7: Never letting up
Step 8: Incorporating changes into the culture
1.4 Barclays did not do well as a corporate parent because they led to unnecessary
bureaucracy which led to stunted growth on Absa. They also promoted rigidity
and stifled innovation. Barclays should have given Absa the required autonomy
and monitor from a distance so that the bank would grow. They were not
supposed to interfere with managerial processes and decisions.
SECTION B
QUESTION 2
This question requires an analysis of the resources and capabilities of the two firms
in question and see how they will assist the firms to thrive in their newly strategic
intents. The student should also assess the entry requirements of the two industries
being targeted by the two firms to see which one is easier to enter
Discovery
Its greatest strength is its Vitality business model which makes it high competitive. It
also has brand loyalty and a wide customer base. The firm also has the financial
muscle to pull through. They however lack interms of banking experience and the
technologies required. The banking industry already has big players enjoying
economies of scale. The capital requirements and legal formalities are very high in
the industry
FNB
2
,The bank has advanced technology and is highly innovative. It has a good customer
base and financial status. To back that up, the requirements for entering the
insurance industry are not as many as those of the banking industry.
With that in mind, FND is most likely to succeed in its strategic intent that Discovery
QUESTION 3 (Study Unit 4)
1. Empathise – listen to and understand customer needs. This typically requires
qualitative field research, such as talking to end-users or observing them. For
example, in ICT companies anthropological research to observe users as they
interact with technology in their natural settings is a big growth area. The purpose of
this phase is to develop a deep understanding of the end-user’s problem.
2. Define – combine all the insights collected at the time of listening and observing
people, define the root problem clearly and correctly. The purpose of this step is to
identify the root cause of the problem using the data gathered in step 1.
3. Ideate – search for methods to solve the problem by generating as many ideas as
possible, and selecting the best idea(s).
4. Prototype – use methods such as sketching, diagrams or rapid prototyping to
create rough drafts of possible solutions.
5. Test – test the prototype solution with end-users to get feedback on whether the
solution would work for them or not, and what needs to change. Repeat this step
until the design solves the problem in the best way possible.
QUESTION 4
Elon Mask’s characteristics that make him a strategic leader
Visionary: thinking beyond what seems viable
Making people believe in his vision
Sharing ideas openly
Exemplary
Results oriented
Creativity
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