Alpen Bank
International Business Case Analysis 1
Alpen Bank: Launching the credit card in Romania
Name: Xiao Zheng #701369253
Subject: Alpen Bank: Launching the credit card in Romania
Course Number: IB207
Instructor: James Neelankavil, PH.D.
Date: 09/25/2011
Problem Definition
In 2006, the country manager for Alpen Bank in Romania, Gregory Carle, considers whether to recommend the launch of a credit card business and add 5 million of annual profit to the Consumer Bank segment within two years. The firm rejected the idea several years earlier because of poor economic conditions in Romania. However, Romania is experiencing a period of economic growth after joining the European Union and Carle believes it is time to reconsider the opportunity despite continued skepticism within the company. Carle faces several important decisions before he can present his plan to the head of International Consumer Businesses. He must decide whether to launch a credit card business in Romania, how to position the credit card, and how to acquire new customers most effectively.
Historically, Alpen management had balked at launching a card business due to low per-capita income levels, a poorly developed infrastructure of point-of –sale terminals, and the population’s inexperience with consumer credit. The country’s imminent entry into the European Union had led to a reassessment of this decision. Hence it is critical to consider whether Alpen Bank should approve the proposal of Carle’s, which is whether to launch the credit card business in Romania market. Meanwhile, Carle should consider the case rest on the analysis of the economic opportunity and demonstrate the generating 5 million in profit within two years was a realistic objective. Beyond this, we should also identify why Alpen bank would raise this consideration. And the statements are as follows.
Firstly, after a tough three-year recession, macroeconomic trends during the first half of the decade were encouraging. Rapid
Alpen Bank: Launching the credit card in Romania
Name: Xiao Zheng #701369253
Subject: Alpen Bank: Launching the credit card in Romania
Course Number: IB207
Instructor: James Neelankavil, PH.D.
Date: 09/25/2011
Problem Definition
In 2006, the country manager for Alpen Bank in Romania, Gregory Carle, considers whether to recommend the launch of a credit card business and add 5 million of annual profit to the Consumer Bank segment within two years. The firm rejected the idea several years earlier because of poor economic conditions in Romania. However, Romania is experiencing a period of economic growth after joining the European Union and Carle believes it is time to reconsider the opportunity despite continued skepticism within the company. Carle faces several important decisions before he can present his plan to the head of International Consumer Businesses. He must decide whether to launch a credit card business in Romania, how to position the credit card, and how to acquire new customers most effectively.
Historically, Alpen management had balked at launching a card business due to low per-capita income levels, a poorly developed infrastructure of point-of –sale terminals, and the population’s inexperience with consumer credit. The country’s imminent entry into the European Union had led to a reassessment of this decision. Hence it is critical to consider whether Alpen Bank should approve the proposal of Carle’s, which is whether to launch the credit card business in Romania market. Meanwhile, Carle should consider the case rest on the analysis of the economic opportunity and demonstrate the generating 5 million in profit within two years was a realistic objective. Beyond this, we should also identify why Alpen bank would raise this consideration. And the statements are as follows.
Firstly, after a tough three-year recession, macroeconomic trends during the first half of the decade were encouraging. Rapid