Akbank: Credit Card Division

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02.03.2020
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Introduction

Akbank is a Turkish financial institution that has been providing credit cards for the Turkish market. Until recently, this market was considerably competitive as the Turkish economy struggled under political instability. Foreign investors were uncertain about the market conditions, and thus they opted to remain uninvolved in the given process. However, the situation has changed, and Turkey is politically stable despite numerous upheavals. Many investors believe that the Turkish market will flourish, and the foreign businesses are now flooding the markets. Consequently, Akbank has to deal with more competition from the international credit card companies that have stronger brand names, an international presence and business partnerships with some of the leading international online stores such as Amazon and E-Bay among others. Therefore, the bank has to provide a marketing strategy that will enable the company to remain sustainable even in fierce competition. The following are the directives for the marketing and communications department, HR Department, Technology Department, the COO and the Board of Trustees, necessary for the company to handle the new market environment, within which they have to operate.

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Akbank Directive to The Director of Marketing and Communications

An External Public Response Addressing the Situation

The public needs to understand that Akbank is not threatened by the entry of international banks into the Turkish market mainly because they possess sufficient tools to compete fairly. Therefore, anything that the company will share with the stakeholders must exude confidence in the bank’s position within the market. Therefore, the only public response that the Akbank should provide is gratitude and optimism following the political stability that the nation will enjoy within the next few years. It is necessary to consider the benefits of the new stability to the customers, including the fact that the economy is more likely to grow, with or without foreign investments. A politically stable market has many advantages, including the possibility of a higher GDP as more businesses, become successful and the people upgrade their living standards.

A Short and Long Term Marketing Strategy

As the economy grows, one may anticipate the corresponding rise of Turkey’s middle class due to the increased foreign direct investment and general economic development in the country. Therefore, the respective market approach should be segmentation on an income basis. Initially, the regime that the bank used to issue credit cards was stringent, and only a limited number of people could merit as most applicants had a weak credit-worthiness (Crossan & Apaydin, 2008). One expects a radical change of the dynamics under new promising economic conditions in Turkey. There will be more people in the middle-income bracket, most of whom will be running their businesses. According to the short term marketing strategy, the company must be able to accommodate the fluctuating incomes of the small and medium entrepreneurs in the market. Therefore, a flexible product that will enable the customers to choose their terms of engagement may be a better way to comply with this new market. The current marketing strategy should focus on encouraging even the low-income brackets in order to apply for the credit cards considering the fact that they control their limits and interest rates as well as how they fund their accounts to repay the debts. The logic behind this process is the fact that a stable political environment will offer many opportunities for economic growth in the country. Moreover, the company must prepare to benefit from this growth by attracting more customers who are still neglected due to their income level (Gerer & Derin-Gere, 2016). The dynamic nature of the market has created the possibility for financial improvement, and this will assist a majority of the people in the country.

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In the long term, a more important focus is customer satisfaction and loyalty. The foreign companies are likely to enter the market with many projects aimed at awareness creation within the related sphere, and they will capitalize on their international brands to build the brand identity. Consequently, the company must ensure that the customers are happy and satisfied with the services that they receive from the organization. Therefore, it is prudent for the company to improve the functioning of customer relations management while also improving their working relationship with new and old customers. The bank needs to work towards consolidating a position and identity in the market. In addition, relationships are the main focus in the case of marketing, where the old clients are crucial but the company should not exclude any new customers for the related purpose.

A Directive to The Director of Human Resources on Recruitment Retention and Employee Motivation

The company intends to compete fiercely for a growing market in Turkey within the next few years. Thus, the bank needs to introduce some changes regarding the Human Resources aspect. First, the recruitment process will target more talent than academic credentials. The education system in the country has caused neglect of many potential candidates, but there is a need to appreciate the people who have dependable talent, especially in the sales and marketing sphere. In this case, the company will have to assess other features apart from the academic papers, when seeking the people who can sell the product, especially to the new low-income markets that are anticipated to grow significantly with the new economic opportunities in the country. The college students are the particularly high target employees when recruiting a sales team for the grassroots. They have networks and social skills to reach the people and obtain corresponding results. However, it is important to get the respective guidance on whom to target and whom to ignore within their selected markets.

Once the company recruits, trains and sends these employees to the respective field, it is important that they are retained to avoid cases of absenteeism or high turnover since the recruitment process is rather expensive. The given prospects are beneficial to Turkey as well as the country’s rate of economic impressive. Sound economic growth will generate many employment opportunities in the private sector. Similarly, employees could be exposed to alternative employment. Akbank must design a competitive working environment to attract a talented and productive workforce that will cooperate collegiately. Moreover, the company will have to ensure that its employees have possibilities of career growth, well-compensated and integrated into decision making. In addition to the reasonable compensation practices, the organization needs to ensure effective training of its workforce and its engagement in the working process within the high-pressure environment that the financial services industry in Turkey will become. It is necessary to introduce the systems, such as Knowledge Management, Decision-support, and customer relations management, as a way to stimulate efficiency and make the work easier for these employees without compromising on quality. Performance appraisals will also have to be fair and accommodating while enabling personal and career development.

Employee motivation is the core aspect of their retention, and without effective motivation practices, retention would be impossible. Turkey is a diverse country, in which people have different views and preferences. However, it is important to note that there are various common aspects that the company can use to motivate its workers. For example, in the first few months, the bank should be able to rely on monetary compensation to motivate the employees. However, this practice will not be effective with time. It is important that the HR department seeks motivational factors, to which the company’s employees will respond. These could be good working relationships, effective communication policies, favorable terms of employment, or creating an innovative corporate culture that will give these people more space and authority over their work among other things. The main task will be to enable the employees to enjoy and appreciate their work.

Data-Driven Questions for The Chief Operating Officer

Questions

i. How many credit cards do you have?

ii. How often do you use your credit card?

iii. Have you ever reached your credit limit on any of your credit cards?

iv. Do you use your credit cards to shop online?

v. How often do you shop online?

Why this Information is Necessary?

The information obtained due to these questions will be used to determine the next line of focus for the company’s marketing activities. International credit card organizations often have a working arrangement with the international online stores, where people like to shop. If it is evident that a majority of customers are shopping online, the company will have to work with the international stores and ensure that the customers can use their credit cards. In addition, the customers will be more appreciative if they do not need to have multiple credit cards unless they request it. If the customers have to apply for locally available international credit cards for convenience, it is likely that they will stop using Akbank’s credit cards. The main aim, in this case, is to establish the reasons for using these credit cards in order to ensure that they meet all of the consumer’s needs.

After obtaining the results, the company may expect that the marketing team will have enough information to decide how to improve the product in order to meet the changing needs of the market. Learning how often the customers use their credit cards should provide insight into the value of the card to the consumer. In a highly competitive market, the value-based pricing has proven to be effective, especially when another competitor is overcharging the customer. The goal, in this case, is to ensure that the company can compete fairly with the other businesses in the market, both with foreign or local. Most foreign companies will be able to manipulate their pricing strategies aiming to suit their international contexts. However, the local businesses will be more limited by the national circumstances, especially those related to inflation and other economic issues in the country. The foreign enterprises, in this case, will have a competitive advantage in their international presence, which will be effective for Akbank to match this advantage within the relevant contexts. International sites, such as Amazon and E-bay, could be useful in keeping the credit card brand relevant for the customers who use it to purchase the products abroad. This company is relatively safe with regards to the local businesses and their partnerships with the local online merchants who are willing to receive the payment using the card.

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A Directive to The Chief Technology Officer

Considering the fact that the market for credit card stiffens, technology will be a vital tool to make the company a formidable contender in the national credit card market. Nowadays, the greatest technology concern is that the Akbank may not be able to cater for the anticipated growth in the customer numbers effectively. As the economy grows, the company expects to attract more clients and provide higher credit limits. Thus, there will be a need to improve the company’s capacity in dealing with the consumers effectively. For example, the organization will need to improve the Customer Relations Management platform so that it can handle a larger number of clients. CRM is effective for collecting feedback and responding to customer complaints while collecting data on customer preferences. In this case, this system is the company’s main tool for understanding the clients, and thus, its current limitations in capacity will significantly impede the success of the bank in the future.

It is also important to consider other aspects of the company’s Information Systems. The fact that they will be competing with international credit cards in online business transactions means that the Akbank should ensure the safety of their cards. Online business transactions open customers to possible cases of identity theft. The clients are often cautioned against using their credit cards on random shopping sites, but they still become victims in one way or another. A major interest of the company, in this case, will ensure sufficient protection to the customers in the event of identity theft. How fast can the credit card be canceled and replaced upon the owner’s request? How effective is the verification method before funds are transferred from the card’s account? More importantly, how much of the client’s personal information does the credit card provide?

Another concern is how to make employees’ work easier by means of technology. The company expects to have more sales and marketing agents across the country to comply with the growing size of the potential market. Consequently, not all the employees will be able to spend much time in the office, and they are likely to have limited access to meetings and briefings depending on their location. To avoid missing critical information updates, these employees will be expected to access the company’s database on a regular basis. This database should provide all the necessary communications not only between the employees but also with the customers and the management. Thus, when creating this database, it is important to consider if it is easy for the employees to access it, even when they are in remote locations with limited bandwidths. In addition, these programs can be tough to access without adequate Internet coverage, and this will make the work difficult for some of the employees who will be making sales in the distanced parts of the country.

To compete with international organizations, it is prudent for the company to be enabled with regards to Big Data. Currently, many enterprises in the West are using the Internet of Things to generate useful data that they can use to target the right customers across the various industries and sectors. The technology team needs to work towards providing the same kind of advantage to Akbank. Big Data, in this case, can be used to determine trends in the local as well as international markets without having to spend a high amount of money seeking information directly from the consumers through the market research (Buchel, 2015). It is worth noting that there is information, which can be readily accessed through the Internet, but there are also many aspects of a company that could be only established through Big Data. The technology, in this case, will enable the business to appreciate the performance of the competitors, thus possibly finding the ways of improvement.

A Statement to The Board of Trustees

As the market grows, the company’s ethical and social responsibilities remain the same. The fact that many companies competing in the same product category will not imply that Akbank can become unethical or socially irresponsible. To begin with, the ethical responsibility of this organization remains to provide transparent credit systems that will enable the consumers to meet their needs on a regular basis without having to incur much in expenses from the borrowing. Even in the need to stay afloat in a rather competitive market, the company is not willing or able to raise the interest rates or use any other mechanism to transfer the high costs of operations to the consumers. Moreover, while there may be a risk related to the activity of this company within the next few months, these risks are likely to pay off as the customers start appreciating the company’s steadfast practices in loyalty and transparency. As other organizations try to benefit from the consumers, Akbank will be working to ensure that these consumers are effectively served and empowered to continue growing financially due to the stabilized economy.

Moreover, Akbank will seek to improve their relations through the employment and training of customer relations executives. In addition to the CRM tool, the company will have a social media platform, where the consumers can interact with the corresponding publicly, which emphasizes the professionalism of the company in treating the customers. It is important to note and appreciate that this company is working towards a stable economy for the Turkish people. In this case, providing a line of credit is more of a means to an end. The end, in this case, is to enable the individual Turkish citizen to care about themselves, even when they have limited funding, provided that they put much effort to obtain the funding. The company will work towards providing a line of credit, which the consumers can use to settle their grocery, health and utility bills, while also paying for transport when they continue implementing their activities. Elimination of these cards would thus not be an option unless there is enough proof to show that the customer in question is unable to pay their accumulating debts.

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From the social point of view, it is a decision of the company to provide a safe environment, while ensuring that they do not use unfairly their employees. Thus, in addition to corporate social responsibility, the bank will also be providing a sustainable clean operation, especially as related to the environment. One of the greater concerns is the company’s policy of using the paper. Most of the work in this organization involves exchanging data without the use of paper, and this is considered important to the establishment of the responsibility towards the environment (U?ak, 2011). Akbank is socially responsible because, as a company, they care about the future of the planet. Moreover, while it may be impossible for the organization to eliminate the use of paper and the combustion of fossil fuels, the bank operates according to the philosophy that each effort counts. This explains the reason for which there are many initiatives aimed at improving the environment by planting trees and not using paper unless it is completely unavoidable.

Other aspects of Akbank’s social responsibility include gender equality albeit in a rather subtle context. The company may not be able to provide fair employment opportunities for men and women, owing to the educational limitations of the women in Turkey. However, they encourage socially young women to start their careers that they will be proud of as they develop their personality and professionalism. The bank supports female entrepreneurs, and the company will continue to follow this strategy in the long term. The credit cards, for example, are open for purchase by both male and female customers. The company is providing an option for financial freedom to both men and women expecting that these customers will use the card as an opportunity to obtain easily their finances. Turkish women are relatively marginalized concerning career possibilities and the potential of running a successful business. Akbank is trying to make necessary changes considering that the bank has a line of credit cards that the female customer can use as they succeed in their education and become financially independent. As the economy grows, the bank is working to help the citizens of Turkey improve indiscriminately.

Conclusion

The credit division at Akbank can implement a raft of measures to navigate successfully the highly competitive market that is awash with international credit card companies. First, the foreign credit card businesses in Turkey do not have a pre-existing relationship with the customers, and this provides Akbank with some leverage, which they use to consolidate their position in the market. The company needs to use technology and the local workforce. This will help them to market effectively both the existing and new products that will appeal to a population that is anticipating a high level of economic empowerment, based on the new political stability that they are currently experiencing. Being a local company has many disadvantages especially in a country, such as Turkey, where the culture is unique and difficult to predict for an outsider.

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