Mba 540

Problem Solution: USA World Bank

University of Phoenix

Problem Solution: USA World Bank

USA World Bank is a successful full service bank with locations in both international and domestic markets. Banking is a tough business so to stay ahead of the competition the bank tries to develop new product innovations that will allow them to sustain their growth. Most of their new products have been limited to the domestic market. Their new products have had some success in the past; however they appear to have lost ground to some of their competitors. According to Brian Allen, President of New Product Development “You know our new products have pretty much tanked in the past couple of years. We’re under a lot of pressure to deliver something that will be profitable and increase market share,” (University of Phoenix 2007). To be competitive in the banking business, USA World Bank must use statistical analysis to assist them with their new product selection. Currently the company utilizes a third party Best Market Research to assist them with feasibility studies for the selection of their new products. Brian Allen, President of New Product Development for USA World Bank has the final say on what products that are selected for recommendation to the board of directors. The last few products have been marginally successful and he is feeling the pressure to show some results. The past decisions have been based on recommendations from his Vice President of New Product Development Mary Monroe. Her weakness “is that she is not always thorough in her assessment of the research that is given by the third party firms that she hires,” (University of Phoenix, 2007) Finally the Board of Directors will make the final decision on which products are selected for the initiative.

Situation Analysis

Issue and Opportunity Identification

There are two groups that are competing for this year’s product recommendation to the Board of Directors. The first group is headed by the Marketing Development group headed by Jim Wilson. Jim’s team has selected a card for small business owners that will allow them to purchase capital items. A line of credit up to $200,000 will be given and will offer rewards for its use. The team also will utilize focus groups to gather data to support their recommendation. The second group headed up by Mary Monroe, Vice President of New Product Development will also propose a credit card with a reward component as well. The consulting firm Best Market Research will perform a feasibility study to support her team’s recommendation. Ultimately Mary’s team won and the decision was made to present the consumer credit card to the board with Jim vehemently objecting. At the board meeting that was held on April 1st, a new board member was introduced, Dr. Bea Hansen a professor of statistics. As the meeting progressed and the statistics were rolled out, Bea questioned the statistical analysis primarily the use of the online survey that was used to gather the data. She felt the gender percentages were wrong since men are more likely to respond to online surveys than are women. She believes a truly random sample would be more representative. The meeting was quickly adjourned and the direction was given to take another look at the data for a week. The challenge to reassess the data gives the group the opportunity to correct Mary’s weakness in trusting the data collected by Best Research. Has the firm given their due diligence in the data collection? Could they expand their new product offerings to include Jim’s idea? It was great that Bea was able to quickly catch the disparity of the data before the decision was made. Perhaps that is why their new product initiatives have been less than stellar.

Stakeholder Perspectives/Ethical Dilemmas

There are a diversified group of stakeholders in this scenario that include the Board of Directors, Consumers, and Small Business, the New Product and Market Development groups. Each has their own aspects and interest on which direction the company should head. As notated in the case the Marketing Development Group is responsible for growing relationships between small-business organizations and owners. This group headed by Jim Wilson has increased the business by “40 percent”, (University of Phoenix, 2007) The New Product Group is responsible for “launching new products that will have a significant impact on earnings,” (University of Phoenix, 2007). There is a tremendous amount of pressure on this group since they have not had very much success in the last few years. “The board of directors generally sets broad corporate policy rather than participating in day-to-day managerial decisions, although selection of the chief executive officer is the board's responsibility. Members are elected by the firm's stockholders and may or may not be stockholders themselves,” (Wall Street Words, 2003). The board must ultimately ensure that the correct product is selected for ultimate shareholder value. The dilemma for small business as a stakeholder is to be driven away if the management team concentrates on a consumer solution instead of a solution that will encompass both interests as Jim mentioned to Brian. The company must come up with a win-win solution for all to succeed. The question is how to do it? The company must flush through the data that has been provided and ensure that it is accurate and a correct reflection of the market that they wish to penetrate

Problem Statement

As mentioned in the scenario the board meeting quickly adjourned due to the inconsistencies that were found with the data provided by Best Research. USA World Bank needs to address a long term solution to ensure that the data being presented is correct and true. The Bank must also ensure that decisions made in one market segment will not affect the other (consumer versus small business). Ideally the bank must cater to both entities for maximum revenue opportunity. The bank must do a better job in their new product selection otherwise they will continue to lose market share and eventually the companies existence will be in jeopardy.

End-State Vision

The end-state vision for USA World Bank is to be the leader in both international and domestic banking by developing profitable