Thesis (MBA)--Stellenbosch University, 2000. / ENGLISH ABSTRACT:The financial services industry in South Africa, and indeed internationally, is
facing enormous challenges in terms of defining and implementing effective
business models to compete in the new economy. Dated paradigms, such as
market share being the main driver of profitability and product-push sales
models, are increasingly being challenged by a shifting balance of power towards
the consumer. The consumer's purchasing power is being strengthened by the
increasing commoditisation of financial products and the proliferation of channels
through which products can be purchased. Competitive differentiation purely on
the basis of price, product, place and promotion is thus becoming more difficult.
Financial services companies have to reinvent their business models to account
for the fast changing consumer landscape. The ownership and management of
customer relationships and the lifetime value of customers are key factors
influencing the revision of business strategies. This study serves as a case study
of the strategies that Old Mutual has put in place and is now implementing to rise
to the challenges of the new market. The requirement for market segmentation
and value chain re-engineering is investigated in detail. These strategies are
critically evaluated against the modern thinking of international business
strategists. The specific subordinate focus points for the study comprise the
following:
i. Industry and competitive conditions
ii. Key success factors for organisational transformation and customercentricity
iii. Market segmentation and value chain re-engineering
iv. Customer relationship management (CRM) and the role of technology
v. Product and channel dynamics
vi. Organisational implications for Old Mutual
It becomes evident from the case study that financial institutions such as Old
Mutual must continue and even accelerate their transformation from
product-centric to customer-centric enterprises. This transformation will enable
them to address effectively the issues they face today: decreasing customer
satisfaction, increased competition, and multiplying customer management costs.
A valid approach to initiating customer-centricity is through the segmentation of
the market - identifying customer segments that are distinct in terms of
demographics, attitudes and behaviours. New value propositions can then be
developed that fit the needs and wants of the segments. These propositions
should encompass the total value delivery chain - brand, product, channel and
service in such a manner that it makes economic sense. Companies need to
assess existing propositions and marketing initiatives in the light of the
segmentation exercise to determine whether there any opportunities to fill gaps,
create new businesses or to terminate value destruction.
The development of segment specific propositions must be underpinned by
business processes and complimentary structures, controls and systems. This
requires a fundamental alignment of the organisation to deliver customer focused
value propositions. Entrenched interests in existing structures and an inward
focus as opposed to an outward (market) focus are major obstacles in this
alignment process. Intervention and leadership is required to affect the
necessary transformation. Alignment is needed throughout the organisation for
this type of transformation to succeed. Old Mutual is acutely aware of these
obstacles and has committed to the new strategy at executive level.
Many institutions are tempted to spend time and effort building CRM capabilities
in the belief that these alone will deliver success. However, without a clear,
compelling value proposition, the power of marketing is limited. Instead
institutions must develop value propositions that give them an edge over product
focused rivals. They can then use CRM tools to extract maximum value from their competitive advantage. An emphasis on relationships can indeed become
part of their strategy, but first they must make sure that enough customers value
the proposition sufficiently to make it profitable, and that they can deliver on that
promise.
Technology investments alone will therefore not allow a company to transform to
a customer-centric enterprise. These investments must be coupled with
commensurate investments in organizational restructuring, process
improvements and definition of enterprise-wide metrics for establishing the
present and potential value of each customer. It is for these reasons that Old
Mutual is implementing CRM incrementally.
With the development of a segmented approach to the market and the advance
of technology, new and superfluous distribution channels are equally likely to
appear. Institutions such as Old Mutual will have to manage the conflicts that
arise with care. There is great risk in alienating or cannibalising existing channels
prematurely. The issue is to decide when and how to creatively destroy a
distribution model that is no longer appropriate. The alignment of channels and
service to the market is as important, if not more so, than products in delivering
the brand promise.
It is critical that there is total alignment of brand, marketing, product, channel and
service. Consumers are really purchasing branded solutions, not products. Old
Mutual has superior brand recognition, but needs to focus the brand in particular
segments and ensure delivery of the brand promise through every customer
interaction. In the final analysis Old Mutual, like its peers, has recognised the
imperative for total value chain re-engineering and organisational re-alignment
along market segments where the brand has appeal. These institutional
transformations will remain work-in-progress for some time and constant
adaptability to market forces will become the modus operandi. / AFRIKAANSE OPSOMMING: Die finansiële dienste bedryf in Suid-Afrika en inderdaad, wereldwyd, staar groot
uitdagings in die gesig in terme van die definisie en implementering van
effektiewe besigheidsmodelle om in die nuwe ekonomie te kompeteer.
Uitgedateerde paradigmas soos markaandeel as aanduider van winsgewindheid
en produkgerigte verkoopsmodelle word al hoe meer bevraagteken deurdat
verbruikers al hoe meer die hef in die hand het. Verbruikers se koopkrag word
versterk deurdat finansiële produkte toenemend kommoditeite word en deur die
toevloei van kanale waardeur die produkte gekoop kan word. Dit word spoedig
moeiliker om op grond van prys, produk, plek en promosie te kompeteer.
Finansiële dienste firmas moet hul besigheidsmodelle hersien om tred te hou met
die snel veranderende verbruikersmark. Die besit en bestuur van
kliënteverhoudings en die leeftydwaarde van kliënte is kernfaktore in die
herformulering van sakestrategië. Hierdie gevallestudie ondersoek die strategië
wat Ou Mutual in plek gesit het en tans implementeer ten einde die nuwe
markuitdagings die hoof te bied. Die vereistes vir marksegmentasie en die
hernuwing van die waardeketting word in diepte ondersoek. Hierdie strategië
word krities ge-evalueer teenoor hedendaagse internationale sakestrateë. Die
spesifieke fokuspunte van die gevallestudie behels die volgende:
i. Bedryfs- en kompeterende toestande
ii. Sleutelfaktore vir die sukses van organisasie-transformasie en
kliëntgerigtheid
iii. Marksegmentasie en waardekettinghernuwing
iv. Kliënte-verhoudingsbestuur (CRM) en die rol van tegnologie
v. Produk- en kanaaldinamika
vi. Organisatoriese implikasies vir Ou Mutual
Die gevallestudie dui aan dat finansiële instansies soos Ou Mutual moet
voortgaan en selfs versnel met hul transformasie van produkgesentreerdheid tot kliëntgesentreerdheid. Hierdie transformasie sal hulle in staat stelom effektief
aandag te verleen aan die hedendaagse uitdagings van afnemende kliënttevredenheid,
toenemde kompetisie en snelgroeiende kliënte-bestuurskostes.
'n Geldige benadering tot die aanvang van kliëntgerigtheid is om die mark te
segmenteer op grond van demografie en die benadering en optrede van kliënte.
Nuwe waardeproposisies wat die behoeftes van die mark aanspreek kan op
grond hiervan ontwikkel word. Hierdie proposisies behoort die hele waardeketting
aan te spreek - bemarking/handelsmerk, produk, kanaal en diens op so 'n
manier dat dit ekonomies sin maak. Firmas is genoop om bestaande proposisies
en bemarkingsinitiatiewe te evalueer in die lig van segmentasie ten einde uit te
vind of daar geleenthede is om leemtes te vul, nuwe besighede te skep of
waardevernietiging te staak.
Die ontwikkeling van segmentgerigte proposisies moet ondersteun word deur
besigheidsprosesse en aanvullende strukture, beheer en stelsels. Dit vereis 'n
fundamentele belyning van die organisasie ten einde kliëntgerigte proposisies te
lewer. Gevestigde belange in bestaande strukture en 'n interne fokus in plaas
van 'n markgerigte fokus, is groot struikelblokke vir die proses van belyning.
Intervensie en leierskap is nodig om die nodige transformasie te bewerkstellig.
Die hele organisasie moet belyn wees ten einde hierdie tipe transformasie te laat
slaag. Ou Mutual is deeglik bewus van hierdie struikelblokke en is op uitvoerende
bestuursvlak verbind tot die proses.
Vele instansies staar die versoeking in die gesig om tyd en moeite spandeer ten
einde kliënteverhoudingbestuurs-vermoëns (CRM) te ontwikkel met die vertroue
dat dit genoegsaam is vir sukses. Sonder 'n duidelike en aangrypende
waardeproposisie is die krag van bemarking egter beperk, ondanks al die
voorafgenoemde ontwikkelings. Daarom moet instansies fokus op proposisies
wat hulle sal bevoordeel relatief tot die kompetisie. Dan alleen kan
kliënteverhoudingsbestuur (CRM) benut word om maksimum waarde uit die kompeterende voordeel te trek. 'n Fokus as verhoudingsbestuur kan inderdaad
deel word van die strategie sodra daar genoeg winsgewende kliënte bestaan wat
die proposisie aantreklik vind en hul verseker is dat hulle die belofte van die
proposisie kan vervul.
Investering in tegnologie alleenlik is dus nie genoeg om 'n firma te transformeer
tot 'n kliëntgerigte organisasie nie. Sulke beleggings moet gekoppel wees aan
soortgelyke beleggings in organisasievernuwing en prosesverbeterings en die
definiëering van maatstawe vir die bepaling van huidige en potensiële
kliëntwaarde. Dit is daarom dat Ou Mutual kliënteverhoudingsbestuur
inkrementeel implimenteer.
Met die ontwikkeling van 'n gesegmenteerde benadering tot die mark en die
voortuitgang van tegnologie, is dit waarskynlik dat verskeie distribusiekanale
oorbodig sal word. Instansies soos Ou Mutual sal die konflik wat ontstaan met
sorg moet hanteer. Die risiko is groot om bestaande kanale te vroeg te vervreem
of te kannibaliseer. Die uitdaging is om te besluit wanneer en hoe om oorbodige
distribusiekanale kreatief te vernietig. Om verkoopskanale en diens markgerig te
kry is net so belangrik, indien nie meer belangrik nie, as om produkte te ontwikkel
wat die handelsmerk uitdra.
Dit is krities dat daar deeglike belyning is van die handelsmerk en bemarking,
produkte, kanale en diens. Kliënte koop handelsmerk-oplossings en nie produkte
van handelsmerke nie. Ou Mutual het 'n uitstekende handelsmerk, maar moet dit
fokus op spesifieke segmente en moet verseker dat die handelsmerk se belofte
gestand gedoen word met elke interaksie met die kliënt. Op die keper beskou,
erken Ou Mutual, soos sy eweknieë, die imperatief om die waardeketting en die
organisasie te hernu ooreenkomstig die marksegmente waarin die handelsmerk
hom beroep. Hierdie transformasies sal lank duur en die vermoë om aan te pas
by markkragte sal die modus operandi word.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/49677 |
| Date | 12 1900 |
| Creators | Potgieter, Christopher |
| Contributors | Burger, J. H., Stellenbosch University. Faculty of Economic & Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | 180 p. : ill. |
| Rights | Stellenbosch University |
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