In this report, a complete study about the Emirates NBD online banking is performed in which we evaluate the success of the e-business model and e-business strategy implemented by Emirates NBD .The study includes a brief description about the Emirate NBD website along with a company description, findings about the online banking and its effects on business, current segmentation, targeting and positioning of the company. Also, it includes an analysis of promotion which is one of the marketing mix strategies of the website, E-CRM of the bank and the methods of sustaining competitive advantage over other traditional and online banks. The report concludes with a few pragmatic suggestions that if implemented, will improve the business prospects of Emirates NBD in the e-business market in order to achieve a tremendous success of the company and increase of profits .
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All civilizations in the history started on the banks of a river, whether it was the Indus valley or Egyptian (Nile) or Mesopotamia, the river is the common denominator. The most modern civilizations of e-Commerce that have spread around the globe today are also developed around the name of a river, Amazon! Amazon.com was one of the pioneers in the e-Business and they led dotcom companies which revolutionized the business world of today. In the last decade of the 20th century, the world saw the spurt of a new way of doing business. Till then the basic infrastructures for the business were built of “brick and mortar”, but for this new generation business world the digital network plays the role of basic infrastructure, and that world is just a “click’ away from you. Everything nowadays can be performed online starting from shopping to paying your bills in a click .And this basically urged the fact the e-business market should be improved in every possible way in order to become more convenient considering it plays a vital role in reducing time and money, heightening customer service and overcoming locations and availability restrictions, which opens up a brand new marketplace to businesses of different kinds.
Online banking today constitutes of pros and cons where each has its own effects on the e-business market in general. Nowadays , there is no bank that does not have an internet strategy that aids their success in different investments .However , the web does not guarantee success and requires a lot of planning in order to keep the online services convenient .In particular ,online banking business should be studied in details in order to provide customers with fast, more responsive, reliable and inexpensive options that would ease their banking operations .Online banking opens the way for customers to have more control of the banking systems by maintaining and monitoring their own accounts .So the e-business should always be concerned with customers’ needs and satisfaction, and in this context the technologies and the business strategy compliment with e-business to provide the best experience to customers .
Banking industry is very competitive in nature. And e-business is a perfect platform that opens the way to maximize the customer’s attraction to a particular bank since it reduces time, heightens customer service and overcomes locations and availability restrictions.
Emirates NBD is one of the biggest banking group in the Middle East in terms of assets as it was formed on 16th of October 2007 when the shares of Emirates NBD were officially listed on the Dubai Financial Market (DFM). The merger brought together the UAE’s second and fourth largest banks (Emirates Bank and National Bank of Dubai) by assets and created a banking champion with the largest asset base in the Middle East summing up to more than AED 282 billion as by the end of the year 2008. The Group has operations in the UAE, the Kingdom of Saudi Arabia, Qatar, the United Kingdom and Jersey (Channel Islands), and representative offices in India, Iran and Singapore.
Emirates NBD is a market leader across core business lines. It is the leading retail banking franchise in the UAE, with over 129 combined branches and over 650 ATMs/ Cash Deposit Machines spread across the UAE. The group is also a major player in the corporate banking arena, with a combined market share of almost one fifth of corporate loans. With a fast growing Islamic banking affiliated entities, strong investment and private banking services and a leadership in the field of asset management products, Emirates NBD is well-positioned to grow and deliver outstanding values to its shareholders, customers, and employees.
Emirates NBD received many prominent awards such as Mohammed bin Rashid Al Maktoum Business Award for Finance, Best Bank in the UAE by Global Finance 2009, Best Retail Bank in UAE by The Banker Magazine and Outstanding Private Bank in the Middle East by VRL Financial News.
Emirates NBD’s choice for online banking service which offers powerful and relevant functionalities plays a vital role in their marketing strategy .Their superior web design allows the customers to access their banking accounts easily and with complete trust .
Segmentation, Targeting and Positioning
Segmentation, targeting, and positioning are marketing tools used by a company to expand the competitive advantage in the market. They help the company to differentiate its product-offering from that of its competitors and ensure that the same reaches the exact market profile for which it is intended. Market segmentation is the process of dividing the market into similar groups according to the characteristics addressed for the product at hand. Targeting is the process of selecting the most lucrative market segments for marketing the product. Positioning involves the formulation of a definite marketing strategy around which the product at hand would be finally marketed amongst the target audience.
Banking segmentation in Emirates NBD is done according to account type, resident and non-residents sectors, and business/corporate accounts. However, the segmentation can be widened to include government sectors, employees sectors and educational sectors. Government sector accounts would enhance the banking security and ease the use of these accounts by providing already set packages for government sectors that protect their privacy and facilitates. The reason is that different companies have business accounts from which they distribute the wages. So, an automatic transfer would be performed from the parent account (business account) to the child account which is the employees. Last but not least, educational accounts include local and foreign students that should be separated since foreign students may use different currencies to receive or save their money. Different proposed subscriptions segmentations can be performed by using the e-banking techniques which will target each customer to his/her own options that fit their needs.
Emirates NBD e-business model is merchant since retailers directly sell goods to buyers and it is considered to adopt a standard business to consumer approach . The E-Business Strategy of Emirates NBD is to provide consumers the availability of bank services wherever they are in which is demonstrated by the number of ATM ( 650 ATM ) , and the number of branches (129 branches) that are connected together with complete privacy . In addition, Emirates NBD provides a website which includes all the services that different types of customers would need according to their subscription. For example, business account holders can manage their investments online such that economists, researchers, analysts and investment specialists provide best solutions that meet their business goals.
Promotion is an important part when offering the service; it is a necessary function in E-Business. This is one of the key facets in acquiring and keeping customers. Acquiring and keeping customers is important, but more attention and money needs to be spent on the place factors, such as warehousing and distribution functions (Foster, 1999). In this case, Emirates NBD facilities that are provided in the branches, for example computers by which the customer can check his or her account and have all the options that he/she could have if accessing it from their homes.
However, E-commerce companies usually find some difficulties in advertising their website so that each customer is aware of their webpage and this could halt profit growth by keeping the number of customers constant. So, the website should be well advertised in order to reach the maximum size of customers (new and old customers) and non-customers (who could be possible customers). The current technology of search engines, such as Yahoo and Excite, is very broad in nature (Mardesich, 1999). When looking for a specific company search engines will bring up a vast variety of topics and it takes a while to narrow down the possible entries to find the needed company (Mardesich, 1999). So, reducing the time spent looking for a web site can increase the satisfaction of the customers. If they must spend twenty minutes looking for a particular site, they would most probably stop before finding it. A company can use promotion to combat these problems.
The Emirates NBD group provides more special promotional discounts like educational loan to the students and housing loans to government employees and corporate companies’ special discount on their interest. Furthermore, there are many promotion tools that can be used in order to increase the number of online customers. For example, press releases, traffic exchanges, and social networking advertisement links. Usually, the main factor that affects which way to use in order to advertise the company services is bounded by the budget and the time available to do market research to discover who is the target customers and how to target it.
E-Customer Relationship Management
Dr. Andreas Muther describes Customer Relationship Management (CRM) as a development of new services and deployment of information technology in the supplier-customer relationship in the form of Electronic Customer Care (ECC).
E-CRM is an approach to build and retain long term business with customers using customer service, emails, newsletters, mobile marketing, chatting service and other latest technologies. The Emirates NBD regularly sends mails regarding any special new services, rewards update, monthly financial statement, and transfer update. However, it lacks mobile marketing, chatting services and other advertisement on its website.
The purpose of E-CRM is to create personalized relationship with the customers, to value them and to offer them the right services according to their real needs. Even though Emirates NBD uses some of these methods to retain good relations with the customers, it still lacks some of the other features which were earlier mentioned that would satisfy the customers’ needs.
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Methods of Sustaining Competitive Advantage
Creating an e-business aims at using the Internet so as to successfully maintain the competitive advantage of that business and to be able to achieve this competitive advantage, there should be a distinctive plan, a wide range of customers, and new creative products and services among other ways. However, Resources alone are not a basis for competitive advantage, nor are the advantages sustainable over time. In some cases, a resource or capability may help a firm increase its revenue or lower its costs, but the firm derives an advantage only temporarily because competitors quickly imitate or substitute it. Therefore, for a resource to provide a firm with the potential for a sustainable competitive advantage, it should have the following attributes:
The resource must be Valuable.
Organizational resources can be a source of competitive advantage only when they are valuable and resources are valuable only when they enable a firm to formulate and implement strategies that improve its efficiency or effectiveness.
The resource must be Rare.
If competitors also possess the same valuable resource, it is not a source of competitive advantage since all the firms would then have the capability to exploit the resource in the same way. Common strategies based on such a resource would not give a specific company a competitive advantage. For a resource to provide competitive advantages, it must be uncommon; that is, rare relative to other competitors. Therefore, even a valuable resource may not be a source of competitive advantage if it not rare relative to competitors.
The resource must be difficult to imitate.
Difficulty in imitating a resource is a key to value creation because it constrains competition. If a resource is inimitable then any profits generated are more likely to be sustainable. Having a resource that competitors can easily copy generates merely a temporary value. Managers often fail to apply this test and tend to base long-term strategies on resources that are imitable. It is important to note that an advantage based on inimitability will not last forever. Competitors will eventually discover a way to copy most valuable resources.
Emirates NBD is trying to apply this competitive advantage by making its services and resources valuable and rare. Valuable in a way that it would provides every service that the customer may need which ranges from paying bills online, making online transfers , to online account management and etc . It is rare in a way that not all banks have all of these features that are found at Emirates NBD and if they have some of them, the pricing of the packages differs. Emirates NBD’s strategy constitutes of changing the prices regularly, providing different offers in variable times of the year, and offering rewards linked to customers’ spending. Competitors find it hard to imitate what Emirates NBD is offering due to the amount of profit and market research invested and the valuable efforts of technology developers who work in the bank.
As the study has shown, Emirates NBD is lacking some of the e-business strategy essentials that could increase their profit by satisfying existing customers and attracting more customers to their bank. The promotion budget should be increased in order to be able to advertise the features that are available on the website, on television and bulletin boards in addition to including advertisement in social networking websites like Facebook and Myspace. With respect to the website itself, live chat should be included which enables customers to directly chat with a representative as this will help the customers with their technical problems.
The Emirates NBD should increase their range of banking services by providing more personalized services to certain customers that are eligible according to selected criteria. Indeed, at the moment, the company is using this website as an extension to their existing services, which does not enable them to offer real advantages on their website. Promoting the website by personalizing some services to online accounts and online ordering of services could help establish the required advantage of the services provided. Added to that, for customers’ convenience and satisfaction, online surveys could be performed on the bank website in order to test the satisfaction of customers about the services provided. Having a blog in which customers could express their experience and recommendation of different services is also a good idea that would make customers feel more comfortable.
It is true that the company is not facing any serious problems and is actually increasing its profits year after year yet, in order to maintain sustainability and decrease the expenses of overloading the branches and the customer services employees, e-Business is a good way that enables to increase the profitability, decrease expenses and maintain current customers.
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