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Customer Management at Magellan Savings Bank of Philippine   Case Solution & Answer

Customer Management at Magellan Savings Bank of Philippine Case Solution

1.SWOT Analysis

a.What are weaknesses and threats presenting the company? (Weaknesses and threats are not the same)

Weaknesses

Magellan Savings Bank of Philippine; the country’s largest bank has several weaknesses. Its’ branch network is outdated and the amount of service is inefficient. Its customers are overwhelmingly older, and the service is not good in rural areas. The branch network is based in a small town, with a small number of branches. The company hasn’t adapted to the changing demographics and needs of consumers.

Its’ distribution network is based on a strong network. This enables it to reach a wide variety of market segments. It has a dedicated customer relationship management department alongside a good brand equity. The bank needs improvement in order to maintain a competitive edge and to build on its strengths. Therefore, it would be beneficial to remove the weaknesses of Magellan Savings Bank so it could remain competitive.

The weaknesses should be internal. These areas include low customer satisfaction, low staff morale, high loan rates, and poor brand recognition. By identifying these weaknesses, the bank can make improvements in those areas and achieve its goals. This helps the bank stand out among its competitors. This strategy will ensure that it stays competitive for a long time.

Besides its low customer satisfaction, Magellan Savings Bank also has a limited number of customers. Having a limited number of branches limits the company’s potential to expand. Its distribution network, however, gives it the flexibility to grow its reach, but it lacks brand recognition. The bank’s low brand equity and high loan rates are its weaknesses. Although it has strong internal resources, the bank also has a large number of problems.

The bank’s internal resources have limited scope. Moreover, the bank’s customer base is relatively small and largely untapped. The branch network, however, is its greatest strength. The branch network allows the bank to expand its reach to a wider market. The customer satisfaction index is a key indicator of a bank’s profitability. A low level of staff turnover also indicates to the bank’s internal resources being inadequate.

The bank’s internal resources can be seen as a major weakness. For instance, a bank’s staff morale is low and its customer satisfaction is low. Its product line is not diverse enough and its loan rates are high. Its product portfolio does not cater to its client’s needs. Furthermore, the bank’s online presence is not as efficient as it could be.

Threats

The banking industry is increasingly susceptible to threats, which includes the COVID-19 health crisis, which has dramatically changed the way consumer’s bank. (Aldasoro, 2020).These health outbreaks have forced many banks to reinvent themselves and invest in new technologies. (Rabbani, 2021). Meanwhile, consumer preferences and digital capabilities are rapidly evolving. For these reasons, a new generation of digital banking solutions is needed. These solutions help banks adapt and innovate to stay ahead of the curve.

The country’s economy is characterized by high unemployment and a deteriorating economy. While the Philippines is a member of many international organizations, the Philippines’ economy is highly diversified and highly regulated. This has resulted in an uneven distribution of investments. While some industries have a lower rate of growth than others, other sectors are more exposed to these risks. As a result, foreign investors are increasingly hesitant to invest in the Philippines. (CAMBA, A. L. 2020)

In order to stay ahead of the competition, a bank must have an effective risk management system in place. There are many risks to a bank’s operations. One threat is the failure of a critical system. An aging population and a rapidly-aging population are two key threats. In addition, an upcoming economic downturn will also pose a significant threat to the institution’s operations. A strong financial system will help protect the interests of both the banks and their customers.

While the Philippines’ investments in the global economy have increased in recent years, and the country still has a high rate of poverty. (Mendoza Jr, 2019). This translates into an increasing number of cases of malnutrition and pulmonary infections. However, it is important to note that a healthy diet is essential for a healthy life. While the NPCC has set standards for automobile emissions, it has lagged in regulating the effects of industrial air pollution on the environment. In 2000, over 77.5 million metric tons of carbon dioxide were released in the country.

Despite these problems, there is still a high rate of consumer spending in the Philippines. (Rivera, 2020).Inflation is a major cause of these problems. While the Philippine economy continues to grow, the average wage is low. The government’s policies are designed to help local businesses succeed. While the Philippines has many opportunities, it is important to protect these companies from these threats. With the proper policies and procedures in place, the economy can flourish in the long run.

Inflation in the Philippines is a concern for the government. Its inflation rate is high compared to the rest of the world. The Philippines also suffers from power shortages in the 1990s. Almost four hours of power outages are reported each day in the capital, with the exception of the capital city. Despite these challenges, the country is currently experiencing real economic growth and the economy is expanding in other areas.

b.What are the main root causes of the problem?

Causes of Problems

A number of factors led to the customer management problems at Magellan. Among them, the bank failed to communicate with its customers, which resulted in a poor reputation. In addition to the lack of communication, the employees were unable to communicate with customers and were not treated respectfully. As a result, the borrowers’ reputation was negatively affected. Moreover, the bank’s pricing policy was not compliant with the consumer protection laws.

The customer management problems at Magellan may be the result of several reasons. The bank has been forced to hire a new employee, despite the bank’s incomplete policy. In addition to the employee-management issues, the non-compete agreement prohibited the employees from soliciting customers. These clauses are excessive and not enforceable and could lead to a lack of competition. Further, they are unable to enforce these terms of their agreements with customers.

The causes of the customer management problems at Magellaan Savings Bank were found to be unfounded. The court found that the lease was incompatible with the public interest and was inconsistent with the law. However, the district court noted that the restrictions on the bank’s operations were reasonable and not in violation of the law. The District Court ruled in favor of the banks and concluded that their lease was not unlawful but incompatible with public policy.

The reasons for the customer management problems at Magellan Saving is based on the company’s non-competition with other institutions. The bank’s employees and customers are likely to see a difference between the two. A common example of this is its pricing policies. The banks can be accused of being less transparent, but it is possible to find a way to comply with regulations.

Another cause of the customer management problems at Magellan was the bank’s lease. The bank was in breach of its lease and had no legal authority to protect its employees and customers from competing companies. The court determined that the covenants protected customers from fraud, and were not unreasonable. The court cited two other factors in favor of the bank’s lease: it did not have a clear mission and the fact that it was not an online-only bank.

 c.What are the strengths and opportunities presenting the company? (Strengths and opportunities are not the same)

 Strengths

The government-owned Bank of the Philippine Islands (BSP) is the largest financial institution in the country. It is the oldest and largest bank in the country. It has more than a thousand branches and more than 2,000 ATMs across the Philippines. It employs about 19,952 people and offers a variety of financial services. Founded in 1851, BSP has a long history of providing excellent customer service.

The Philippine National Bank, a state-owned corporation, was established during the American occupied period. In 2007, it became a 100% private company. It is one of the largest banks in the country that offers comprehensive banking products and services. It has a long history in the country and collaborates with the government, local governments, and government-owned corporations. The bank has 716 branches and more than 1,700 automated teller machines across the country, including over 70 overseas. It has more than 9,000 employees.

The Bank has more than a century of experience in the Philippines. It was founded in 1968, and has been a leading financial institution for over 50 years. It has 1,774 ATMs and 706 branches, including 32 foreign branches and representative offices in Hong Kong and Singapore. Its network is vast, and it has a wide variety of banking products and services. With more than three hundred ATMs, it has more than 390 ATMs in the Philippines. It has also expanded its reach overseas, opening offices in Taiwan, and Guam……………………..

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