|
|
C/w
|
Exam
|
Overall
|
|
Mean
|
52.9
|
48.7
|
47.4
|
|
Std
deviation
|
10.469
|
11.03
|
13.015
|
|
|
|
|
|
|
|
|
|
|
|
Exam
<35
|
|
9%
|
|
|
Fail
grades
|
|
11%
|
14%
|
|
Third
|
|
27%
|
31%
|
|
Lower
second
|
|
38%
|
41%
|
|
Upper
second
|
|
15%
|
14%
|
|
First
|
|
1%
|
1%
|
|
|
|
100%
|
100%
|
These are “crude” grades. The proportion of fails is smaller than that shown after special circumstances are taken into account.
1.How
might First Direct's culture and architecture need to change if it was
decided to make the Internet, rather than the telephone, the main means
of contact with the customer? What internal obstacles would the company
be likely to encounter in implementing such changes?(30
marks)
This question
was disappointingly answered. Far too few students thought to do what should,
by this stage in your education, be second nature – to analyse what First
Direct’s culture and architecture are now.
Of those that did, most people used the Goffee-Jones framework, and far
too many just stated
that First Direct’s culture was communal, or mercenary, or whatever, without
saying why
they had reached this conclusion. Unfortunately, hardly anyone used the
cultural web, which would have yielded more detail as to what precisely
might need to change in First Direct’s culture. Analysis of the architecture
was also rather unspecific in places.
The second
stage in the answer was to establish how the culture and architecture and
culture might need to change as the firm moved from person-to-person contact
to the rather more impersonal interface with customers through the web.
Most people concluded that the culture and architecture would need to become
more formalised and IT driven, but it did not matter what you thought needed
to happen as long as you could demonstrate a degree of logic. No-one, unfortunately,
referred to the material on culture and architecture in e-business from
the final lecture. A number of people blew the answer at this point by
telling us why the move to the web was a bad strategic idea. You weren’t
asked to do this – you were asked to look at the changes needed and the
difficulties that might be encountered.
Finally,
you were asked to look at where the obstacles to change might arise. What
we were looking for here was an analysis of internal
stakeholders (not
customers – read the question again!), their ability to block change, the
likelihood that they might object and their power to do so. A reasonable
analysis of at least a couple of stakeholder groups was essential for a
2.1 grade on the question.
2.To
what extent was First Direct’s success due to a favourable business environment,
rather than astute strategic decisions?(35
marks)
Answers to this question were extremely disappointing, given that the theory involved should have been familiar to every student.
The question clearly calls for an appreciation of both the impact of the environment on First Direct’s success and their decisions on competitive stance, the value chain and architecture enabled them to profit from, or overcome, that environment. We were looking for evidence that you can make a few key, valid points about both environmental analysis and internal analysis, and weigh up their relative importance.
Far too many students gave us nothing much more than a PEST analysis and received a fail grade for this answer, since PEST does not by itself give a full picture of the business environment. If you added a five forces analysis to the PEST, then you would have scraped an third.
The majority of students did complement their points about the impact of the business environment with some analysis of the strategies followed by First Direct, but this analysis typically lacked both depth and precision, amounting to little more that a description of the company’s competitive stance. Very few people analysed the firm’s strategic resources or value chain, even though you had been told on several occasions that an appreciation of these factors is expected for a 2.1.
We were also disappointed in the quality of students’ discussion of whether environment or strategy was more important.
3.It
is early 1997 and you are advising the board of First Direct. The directors,
after long discussion have identified the following alternatives for building
on the firm's initial success:
a)Open
a subsidiary in France, offering similar services to those in the UK, with
a view to expanding this into other EU countries if this is a success (Note:
HSBC is not yet a significant force in European retail banking outside
the UK)
b)Open
a training and consultancy unit to assist client firms, in financial services
and elsewhere, in serving customers effectively over the telephone
c)Open
a catalogue sales operation offering selected merchandise (such as wine,
fashion and leather goods) that First Direct's customers are likely to
find attractive, and using First Direct's database as a source of likely
customers.
HSBC
has indicated that it will only release funds for one of these options,
which have approximately the same cost. Which of the three would you recommend,
and why? (Please make sure that you consider the disadvantages as well
as the advantages of each option)(35
marks)
Each option
had something to be said in its favour and something against, for example:
a)There
is a large potential market and state of the art resources. However, it
is clear from the exhibits in the case that there is some entrenched competition
in France (far too few students mentioned this) and First Direct might
not be able to benefit from the parent’s resources as it did when it launched
in the UK. Could they train French Banking Representatives to deliver the
service that British ones do?
b)They
have the training capabilities, and they might well get the clients – they
are already attracting visitors anxious to learn what they do. But would
the market opportunity outweigh the risk of giving away the secrets of
their customer service.
c)They
have skills in cross-selling, and a valuable database of upmarket customers.
But would the customers appreciate the implied breach of banking confidentiality?
And do they want yet another source of junk mail? Do First Direct need
the distraction, or the risk to the bank’s reputation if the mail-order
people foul up?
I don’t think
I could have made it much clearer, when wording the question, that we were
looking for a structured evaluation of the advantages and disadvantages
of each of the three options. Anyone who only analysed one option
would have received no more than one-third of the marks for this question.
You did not have to use RACES, but a clear
statement of why one option had been accepted and others rejected was required.
A surprising number of students thought options b) and c) would be replace the core banking business, whereas in fact they would be add-ons to it.