Scenario One Problem Definition: Usa World Bank

Scenario One Problem Definition: USA World Bank

Over the last few years the banking industry has experienced intense pressure to identify and launch campaigns for new products both in the United States and around the world. Today's competition has made it extremely difficult to select a successful product which in previous years was not as difficult. Therefore, finding a unique and profitable product has become very challenging. USA World Bank is a global organization that needs to create products that will improve profitability and increase its market share. This paper will discuss the challenges, opportunities and the ethical dilemmas that USA World Bank is experiencing during their quest to determine the most profitable product to launch.

Scenario One Background

The President of New Product Development for USA World Bank needs to present a product to the Board of Directors that will positively impact the bottom line. A decision has to be made if it will be more beneficial to focus on the consumer or the small business market. There are two alternative products to choose from. The first alternative is the instant reward consumer credit card which works like a frequent flier program which will be partnered with an airline, hotels and retailers. The second alternative is the small business credit card that has a $200,000 credit limit for capital purchases, discounted interest rates and it offers a reward incentive. Mary Monroe, the Vice President of New Product Development is responsible for deciding which new product to present to the board. According to Mary, the Best Market Research analysis shows that the Instant Rewards credit card will be successful through strong incentives; the card could motivate people to switch from their current banks. Jim Wilson, Vice President of Marketing Development asked Mary if he could submit the analysis for a card for small business owners that will allow them to purchase capital items. Jim advised Mary that his analysis used focus groups with clients and small business-owners in addition to statistical information. Mary advised Jim that she would review the analysis but she had already had an independent marketing firm perform a statistical analysis on the Instant Rewards consumer credit card which her department was planning to recommend. Mary later advised Brian Allen, Vice President of Product Development that in the meeting that she held with the executives, they agreed with Best Market and they wanted to move forward with the Instant Rewards consumer credit card. Jim Wilson, Vice President of Marketing Development met with Brian to discuss the credit card for small businesses. Jim affirmed that the results of the focus group were conclusive and that there was a definite need for the small business credit card otherwise small business owners may move their business to other banks. Brian advised that Mary was not completely on board with this proposal and that she ultimately was the one responsible for the submission of the new product with his approval. Mary later sent an email to Jim advising that a decision was made to recommend the Instant Rewards consumer credit card. Brian was concerned that this decision would the risk losing small business owners. Mary mentioned to Brian that they did not see the small business group as a priority.

Issue Identification

The first issue of USA World Bank is to increase profitability and market share. The competition is fierce in the banking industry; therefore finding unique and profitable products is very difficult. The second issue is the president of New Product Development has to determine which product to recommend to the board of directors that will be the most profitable. A decision has to be made if to launch the consumer Instant Rewards credit card or the small business credit card or both products. The third issue is that the board of directors had questions regarding the marketing analysis provided by Best Market Research for Instant Reward consumer credit cards. The Board of Directors had descriptive statistical questions regarding the sample size, the timeframes data was collected, and how the data was collected for the board of directors that the Brian needed to answer. The fourth issue is that the Vice President of Product Development does not view the small business credit card as a priority therefore; as indicated by the marketing development executives, USA World Bank may lose 30 - 40% of its small business customers. These small business customers may move their business to other banks if USA World Bank does not offer credit cards for them to make capital purchases.

Opportunity Identification

The first opportunity is to increase market share and profitability through the introduction of both the instant rewards program and the small business card. The small business owners expressed interest in both the small business card and the consumer rewards card. The second opportunity is to create teams to improve effective decision-making through teamwork. Good teamwork leverages the knowledge of key stakeholders, making it possible for them to support and embrace leadership and direction. The third opportunity is to implement a good decision-making methodology and to use research instruments and techniques to facilitate the decision- making process. A good decision-making process with helps the bank evaluate the alternatives; provide consistency to lessen the differences between the senior executives, provide assurance in the product selection process and to create less anxiety for all. To make informed decisions, one will need to be able to: "Determine whether the existing information if adequate or additional information is required...summarize the information in a useful and informative manner... analyze the available information ... draw conclusions and make inferences while assessing the risk of an incorrect conclusion" (Lind, 2004, p.4). Tools and techniques determine how to assemble which data is the most significant to use and that which should not be used, aids in deciding how best to use that