Resource Based View Of Strategy Commerce Essay

This study is based on a elaborate instance survey analysis the acquisition of Abbey done by Santander in UK fiscal sector. During the analysis, the pupil will utilize tools such as PESTEL, Porter Five Forces, Generic Strategy, Ansoff Matrix to analyze and measure if Santander ‘s move to get Abbey ‘s bank was a successful attack. However, the pupil will suggest strategic orientations and options so that Santander resolves around the issues identified from an interior out perspective every bit good as from the consumer orientated perceptual experience.


When analyzing the pupil starts by specifying the footings of scheme used by different writers from the place school, from an interior out position and from an exterior in position to place a standing point of how are the different and contradictory schemes applicable to Santander instance survey. Second, the definitions of scheme will assist the pupil usher himself towards acknowledging Santander ‘s market place and kineticss. Hence, applicable schemes point of views are mentioned below.

1.1-Deliberate vs. Emergent Decisions

Harmonizing to H. Mintzberg and J. A. Waters ( 1994 ) , the construct of scheme comes from 2 procedures the planned scheme procedure and the emergent scheme procedure. In the planned scheme, marks are really clear, straightforward and so converted into actions. In the emergent scheme, judgements appear from negociating, chance and positive feedback. Mintzberg says that a scheme emerges overtime and an organisation might get down with a point of view and amount that it calls for a certain place, which is to be accomplished by manner of a carefully constructed program. In add-on, alternatively of stating that one scheme is better than the other, the writers claim that what is best depends on the nature of the organisation. [ 4 ] [ The rise and autumn of strategic planning, 1994 ]

This construct is clearly justified within the instance survey. Under the direction of the CEO Francisco Gomez Roldan, Santander planned to revolutionise the company by implementing a three twelvemonth program which consisted in implementing a new operational theoretical account, reconstructing Abbey ‘s gross revenues competencies, and the development of an independent commercial bank. Later, an emergent scheme was so applied by the new CEO Antonio Horta Osorio who emphasized the construct of Five Subjects: efficiency, service quality, client trueness and teamwork meritocracy.

1.2-Resource Based Position of Strategy

The Resource Based View model attack says that a company resource is its chief beginning of sustainable competitory advantage in the market which competes every bit good as the strategic pick made by direction. RBV scheme aim is to develop its internal resources to run into the demands of the market ( wrong-side-out scheme ) . Barney ( 1986 ) claims that “ developing a lucifer between the houses resources and the success factors in the industry, is a demanding undertaking and the success of the lucifer is a map of the truth of managerial outlooks about the value of scheme ” . [ 3 ] [ David J. Teece, Strategic Management Journal ]

When warranting the statement above, the pupil found that the resource based position scheme is applicable to Santander instance survey because, one of the chief schemes of Abbey was to diversify into new markets, reconstruct its internal dynamic capablenesss, and concentrate on efficiency by presenting a new IT Platform which could be assumed to be a rare resource within its market, every bit good as to cut down costs and cut down its internal procedures in order to drive the company frontward. Besides, the complexness of the overall direction function is such that good quality, top direction, in itself is a possible beginning of competitory advantage ( Castanians and Helfat, 1991 ) . [ 3 ] [ David J. Teece, Strategic Management Journal ]

2-Industries and Markets

In order to place the industries and the markets where Santander competes, the pupil must explicate the nucleus operation of Abbey before and after Santander acquisition.

Previously, Abbey ‘s three chief concern divisions consisted of the Personal Finance Services division which included Banking and Savings ( mortgages, nest eggs histories, current histories and unbarred loans ) , Investment and Protection ( life and wellness protection, investing and pensions merchandises ) , and General Insurance. The Treasury Service division was accountable for the liquidness and capital direction activities of Abbey, while the Portfolio Business Unit trades with concerns considered for divestiture. [ 6 ] [ Santander ( D ) Transformation and Growth in the UK ]

In the hereafter, its retail division consists of gross revenues productiveness, client and nest eggs keeping, cross gross revenues and the development of new growing chances. The Insurance and Asset Management division comprised the bequest insurance concern of Abbey and the plus direction concern. The 3rd division Abbey Financial Market covered activities in derived functions and construction merchandises every bit good as short term markets. . [ 6 ] [ Santander ( D ) Transformation and Growth in the UK ]

As described above, the pupil is now able to advert that Santander is viing in the fiscal services industry sector along with its rivals which are Barclays, HSBC, HBOS, and LTSB, Insurance Companies and retail supermarkets such as Tesco. Its gross revenues come from the direction of people ‘s money and other concerns. Santander is a retail and commercial private bank with legion subdivisions in the UK, Europe, and South America.

With the acquisition of Abbey ‘s Bank, Santander found itself a major participant in mortgages, nest eggs and protection. These represent the solid market place where Santander competes.

3-Overview market analysis

Harmonizing to Santander ( D ) Transformation and Growth in the UK, Santander is soon one of the largest Bankss in the UK market, and has one of the lowest rates of the market. With the acquisition of Abbey ‘s bank and with the execution of the three twelvemonth program, Santander has grown dramatically in footings of size and value. This strategic move was really of import in order to derive market portion and acquire entree to new client sections. In order to calculate gross growing Santander started to offer a full graduated table commercial bank divided into three classs: nucleus concern, under presented markets and new chances. In the nucleus concern Santander aimed for imparting market portion transcending 10 % from 2006 for the mortgages section. In the under-represented markets Abbey boost it gross revenues to win 10 % portion of new bank histories due to the aggressive runs to win higher client value in cross gross revenues enterprises and the development of a premium bank service. The entry into a new market to work new chances in recognition cards, consumer finance and corporate banking represented an tremendous income pool but it had major competition with the large 5 seen in Exhibit 3, 4, 5 and 6 from the [ Santander ( D ) Transformation and Growth in the UK ] . [ 6 ]

3.1-Structure and Dynamicss

Porter ‘s five forces is a theoretical account that helps place the attraction of five competitory forces: the menace of entry, the menace of replacements, the power of purchasers, the power of providers and the extent of competition between rivals. These five forces together constitute an industry construction and an analysis of its market kineticss. The pupil is utilizing this theoretical account to place issues in a wider range. Some issues mentioned in the theoretical account are non merely relevant for the service oriented concerns but besides for the banking sector. Within the clip frame of the Santander analysis instance survey, a changeless rating is required in order to avoid being myopic within the consequences presented. Harmonizing to Michael Porter ( 1980 ) , a concern has to acknowledge the kineticss of its industries and markets in order to vie successfully in the market. [ 9 ] [ Competitive Strategy: Techniques for analyzing industries and rivals ]

3.1.1-Causes of provider power

In the instance of the bargaining provider ‘s power, information engineering plays a major function in the operation of the bank. Santander had stopped wholly pending IT undertakings of Abbey ‘s bank in order to incorporate a full complete System of the Partenon ( it is a platform that allows the incorporation of a planetary information Centre which could be moved across any market, besides allows the launch of new merchandises with minimum lead clip ) . From 2006 to 2007 the axial rotation out of Partenon reconfigured the all Abbey ‘s substructure including a new communicating subdivision web. Partenon was a necessary investing that reduced monolithic costs in the first two old ages. [ 6 ] [ Santander ( D ) Transformation and Growth in the UK ]

The pupil assumes that a major provider is IBM as the database that hold the client ‘s information runs on IBM middleware and so the bargaining power is present as all systems must be runing at all times. Therefore IBM can dicker, because it is being realized an optimum service in maintaining the system on. Santander trust on a individual IT system does non supply hazards as the acquisition of other Bankss in different concern procedures and markets.

3.1.2-Factors of purchaser power

The bargaining power of clients is really high, due to clients holding many options in taking which bank they should travel to. Furthermore, the merchandises provided by Santander are really of import for their clients but non necessary important as there are similar merchandises being offered within their rivals.

3.1.3-Threats of new entrants

The menaces of new entrants in the fiscal UK industry sector are really low, since big Bankss ( Barclays, HSBC, and HBOS ) have strong market place and many old ages of experience. Therefore, the cost of entryway in this sector is really high as new entrants will hold to derive client ‘s assurance and trueness in order to set up themselves. Besides, the distribution channels are controlled by bing participants as the authorities ‘s ordinances are terrible to O.K. new entrants.

3.1.4-Threats of replacements

There is a high degree of replacements supplying different merchandises and low monetary values as compared to the major participants in this industry, some Bankss have improved public presentation restraints for the same merchandises provided by Santander. Futhermore, it is difficult to derive new clients because trade name image and its trueness are really of import in the UK market ( e.g. the cyberspace is utility ) . However, Santander ‘s scheme in respects to its monetary values to suppress new client sections utilizing different gross revenues schemes is really effectual and Santander is a taking organisation with this alone gross revenues capablenesss and efficiency.

3.1.5-Rivalry among Existing houses

Harmonizing to the diagrams provided in the Santander ( D ) Transformation and Growth in the UK instance survey, competition is intense in this peculiar industry because Bankss have similar offering in footings of the value for the money, borders and cost-effectiveness in the long term for different concerns. Barclays, HSBC, RBOS, LTSB, Insurance Companies, Retail Supermarkets such as Tesco are Santander ‘s chief rivals and these companies have similar schemes every bit good as few distinction between the merchandises offered from each bank, accordingly there is more competition in footings of monetary value than anything else.

On the other manus, the fiscal service industry sector is really sensitive to the economic rhythms. At the clip when Santander instance survey was written, Bank of Santander was an industry frontrunner due to its cognition and fiscal strengths. As an industry leader, it is debatable for other retail Bankss to vie against, which lessens concerns and hazard investing. With the acquisition of Abbey, Santander gained solid place in one of the most moneymaking investing market places in the universe. As the bank expands quickly, it minimizes the menace of consecutive competition and increases the net income of Santander.

In add-on, the pupil finds it necessary to associate the analysis and ratings conducted on the construction and kineticss of the viing markets utilizing the five forces theoretical account by Porter ( 1980 ) with the critical success factors for wining in the fiscal markets.

4-Crucial success factors

The thought of critical success factors as a beginning for make up one’s minding the information of leaders was proposed by RH Daniel as an attack that had possible to be used in the pattern of measuring info units which was spread by F Rockart ( 1979 ) . Basically, if a concern possessed critical factors which would in the sense be associated with the factors of an organisation, so the concern would neglect catastrophically. Furthermore, Critical Success Factor ( CSFs ) is determined by the satisfactory consequences obtained within the different SBU ‘s ( e.g. Santander ‘s ) . It ensures the successful competitory public presentation of a concern. [ 2 ] [ David Aaker, Strategic Marketing Management ]

So, the pupil has identified critical success factors that are cardinal of import for the success of Santander in the fiscal industry sector, they are:

The managerial place of both CEO ‘s was and still is a critical success factor for Santander concern because Antonio Horta Osorio a top director who was with Santander for over a decennary and had rich experience in planetary banking, in fact his influence to the Santander ‘s planetary banking scheme was a vision that generated growing by implementing the Five Subjects ( efficiency, service quality, client trueness, teamwork and meritocracy ) . So, his duty and the place that he has had in the Santander commercial banking is a critical success factor.

Santander ‘s resources and capablenesss in the sense of where the company has positioned itself in the market place in order to derive market portions is a critical success factor.

The different schemes implemented to cut costs, to hike gross revenues throughout the different channels ( subdivision web, telephones and mediators ) .The full execution of Partenon IT substructure to cut down costs is besides another critical success factor with major influence in the fiscal industry sector.

The environmental alterations such as Economic, regulative, political and demographic besides influence the critical success factors for concern to vie in this market. [ 2 ] [ David Aaker, Strategic Marketing Management ]


Santander has a consumer oriented concern theoretical account which provides higher degrees of returns in its net incomes and despite the hard economic state of affairs faced by Bankss recently, Santander ‘s control and hazard direction rules is a different attack used by this organisation to distinguish itself from its rivals. Besides, Santander ‘s repute in footings of what they have achieved along the old ages it is different. For case, in 2004 when Santander bought Abbey ‘s bank, the investing and the turnaround or the alteration provided in the concern was enormously efficient and surprisingly effectual. Possibly, Santander is one of the most efficient Bankss in the universe with a high cost to income ratio. However, its civilization and corporate construction in the retail and commercial bank sector is different in the sense that, all the subdivisions portion a common policy model. As a whole, Santander offers bank services in a pick of currencies to its planetary clients. Likewise, it provides mortgages in different currencies excessively.

A farther internal analysis was conducted and the pupil as found of import facets to advert as Santander internal resources, competencies and capablenesss ( see Appendix 2 ) plays a major function within the distinction of the company itself.


Harmonizing to the Strategic Management Journal ( Wiley Blackwell ) , resources is defined as “ houses specific assets that are hard if non impossible to copy ” , for illustration the specialized production installations possessed by Santander. [ 3 ] [ Strategic Management Journal ( Wiley Blackwell ) ]

Santander UK and other subdivisions operate as a geographic subordinate. They operate independently in each market, working efficaciously as a separate entity. Furthermore, each unit manages its ain capital liquidness, with its ain support beginnings. Broadly the whole Santander Group applies controls for all its subordinate units which mean that they portion a common policy model in countries such as hazard direction, internal audit and fiscal direction. Each unit portions pattern and experiences in merchandise development every bit good as the IT operational model and a common trade name. [ 8 ] [ Santander Supplementary Evidence, 2011 ]

Harmonizing to Santander Structure Evidence, the pupil draws upon the fact that in order to hold a construction theoretical account that best fits the environment of retail and commercial Bankss, Santander must prosecute or work along its clients in order to supply solutions for the improvement of the client. [ 8 ] [ Santander Supplementary Evidence, 2011 ]

The fact that the organisation construction is portion of their alone resource, Santander besides possesses other agencies such as touchable and intangible resources ( see Appendix 2 ) . Possibly, the IT platform Partenon is an built-in resource that embodies their capablenesss and competencies overall.


Strategic Management Journal ( Wiley Blackwell ) states that organisation modus operandis and nucleus competencies define the house ‘s ultimate concern as a nucleus. Primary proficiencies must be consequent of seeing across the scope of a house ‘s ( and its rivals ) merchandises and services. Specifically Santander ‘s primary competencies reside in the enhanced operations efficiency in order to increase grosss and cut down costs, every bit good as, the ability to spread out to other markets and to better relationship direction with other Bankss, insurance companies and edifice societies. Santander is extremely known for its selling power and for the competency to present good value and advanced merchandises for retail clients. [ 3 ] [ Strategic Management Journal ( Wiley Blackwell ) ]


Furthermore Leonard-Barton 1992, states that the capablenesss of a steadfast reside on the ability to incorporate, construct, and reconfigure internal and external competencies to turn to quickly altering environments. [ 3 ] [ Strategic Management Journal ( Wiley Blackwell ) ]

Basically, Santander ‘s chief capableness exist in presenting strong public presentation direction by enhance keeping, addition inducements for cross gross revenues. Control and hazard direction is another capableness that Santander possesses in order to support its market portion regardless of the prevalent conditions.

Another Santander ‘ capableness resides in the bringing of increased gross revenues throughout the gross revenues channels ( the subdivision web, telephones and mediators ) . In fact with the acquisition of Abbey, Santander had forecasted that with their gross revenues capabilities the staff would be able to increase productiveness by 40 % and an even higher figure, viz. 60 % was targeted in telephone based gross revenues. [ 6 ] [ Santander ( D ) Transformation and Growth in the UK ]

After the designation of its internal capablenesss, the pupils have identified beginnings that constitute an advantage for viing in the fiscal industry sector.

6-Sources of Competitive Advantage

M. Porter 1980, states that competitory advantage is achieved by offering purchasers better value for merchandise either by agencies of lower monetary values or by giving better merchandises and services which validates higher monetary values. Porter suggests the usage of four generic concern schemes which is a tool used to place beginnings of competitory advantage. [ 9 ] [ Competitive Strategy: Techniques for analysing industries and rivals ]

Using the generic concern scheme by Porter, the pupil has drawn below the scheme approaches that represent the beginnings of competitory advantage used by Santander.

Cleavage Focus

Differentiation Leadership

Cost LeadershipNarrow Scope

Broad Scope

Uniqueness Low Cost

In the figure above, you can clearly place that Santander has more than one beginning of competitory advantage in the short term and long term positions.

Differentiation Leadership- with this scheme, Santander is aiming a big market with purposes to accomplish competitory advantage across the whole fiscal industry. Basically, this scheme is on a regular basis related by agencies of bear downing a premium monetary value for the merchandise. [ 9 ] [ Competitive Strategy: Techniques for analysing industries and rivals ]

Cost Leadership- this scheme is to go the lowest cost manufacturer in the fiscal industry by cut downing costs and basking the best net incomes. By making so, Santander has cost advantage over the competition and can significantly derive market portion. [ 9 ] [ Competitive Strategy: Techniques for analysing industries and rivals ]

For case, Santander has the most advanced banking engineerings ( Partenon ) and operations platforms in the finance industry, which permits it to turn cost nest eggs efficiency into superior value for the client. Santander is one of the extreme efficient Bankss in the universe, with a high cost to income ratio. In add-on, Santander uses client focused direction which allows closer connexions and consumer keeping through better quality service.

However, it is necessary to place strategic selling issues that could perchance act upon Santander in the hereafter.

7-Macro/Micro Environmental

The PESTEL model tool was used to measure and place the major macro/micro environmental issues that are impacting the concern schemes of Santander every bit good as to mensurate in what manner the environmental facets may good act upon concern public presentation at present and in the extroverted hereafter.


Political Intervention in Capital Markets ( menace ) ) ( high precedence )

The economic system controls and imposes a lifting sum of ordinances, the authorities selected regulators who can put to death monetary value controls in most of the chief public-service corporations. There are all kinds of deductions sing the political intercessions such as financial policy used to modify the degree of demand for different merchandises and besides the form of demand within the economic system. Possibly, over the last few old ages denationalization in the UK economic system has given to a new tendency of nationalisation consisting certain Bankss. So, Santander is on at hand force per unit area from this political power which could hold a immense impact on the hereafter of Santander in the UK.


Eurozone Credit Crisis. ( menace ) ) ( high precedence )

Housing market is worsening. ( menace ) ( low precedence )

Eurozone recognition crisis and the planetary recession threaten to destabilize Santander ‘s place in fiscal market industry as clients are extremely concerned about the debts that Bankss face. These uncertainnesss are a high precedence to be resolved in the hereafter as consumers can non foretell what will go on to the bank and their economy. So, it is necessary to guarantee clients that the bank is safe from the planetary recession and Eurozone crisis.

The lodging market is downgrading in the current old ages as consumers have immense debts and low recognition bound that they can non afford to pay off their mortgages, hence there is less people desiring mortgages which means that Santander will confront a challenge to get the better of this issue. In add-on, this menace is to be resolved with low precedence in the long term, the pupil assumes.


Growth in Emerging Markets ( Opportunity ) ( low precedence )

Social impact of the alteration of trade name from Abbey to Santander ( menace ) ( high precedence )

Harmonizing to Santander ( D ) Transformation and Growth in the UK instance survey, Santander saw an chance to do net incomes from the corporate banking market. The ground is that Abbey lacked concern loans and fee net incomes merchandises that restrained a corresponding growing in net incomes. In the long tally, Santander would profit from constructing peculiar merchandise countries on standalone footing both organically and by little acquisitions.

With the acquisition of Abbey, Santander extremist alteration of its trade name could hold an tremendous impact on the civilization of the organisation every bit good as on its clients. The ground is that a sudden alteration on an iconic image that Abbey had to the new logo of Santander causes confounding among the clients as it is a menace for the organisation itself to lose clients for other Bankss. In world, this sudden alteration of the trade name is a selling offense the pupil thinks, as fundamentally Santander is seeking wipe out the yesteryear of Abbey and implement its new manner of concern. This is an of import issue that must be resolved with high precedence as Santander can lose baffled and unsated clients to its rivals. Besides, it is a must to decide this issue with an influence to convey in new individuality and civilization so that the staff does non become ill-defined of their place in the organisation.


Online banking ( Opportunity ) ( high precedence )

Credit card enlargement ( Opportunity ) ( high precedence )

Harmonizing to Santander ( D ) Transformation and Growth in the UK instance survey, Santander Bank has gone through several integratings in the latest old ages, with the acquisition of Abbey ‘s bank and the enlargement to other markets in South America. Online bank is within the highest precedences as to maintain clients loyal to Santander and to maintain clients satisfied and safe as on-line banking is an investing to supply greater value merchandise service.

Santander had a immense chance to do tremendous net incomes in the Credit Card market in a short period of clip. Santander in 2006 launched a program to undertake its current client ‘s base and guard in the UK with solid advanced merchandise offerings. [ 6 ] [ Santander ( D ) Transformation and Growth in the UK ]


Money Washing. ( menace ) ( high precedence )

Money Laundering is an issue faced by all major fiscal services as the UK authorities must guarantee that all clients are safe and to contend against fiscal offense. In add-on, Santander must be at all times ( present and future ) aware of this menace which if found guilty of washing money, its repute will be demolished and the consumers will non swear the bank to set their economy in Santander ‘s bank. In add-on, Santander is regulated by the United Kingdom ‘s Financial Services Authority ( the “ FSA ” ) under the Financial Services and Markets Act 2000 ( “ the Act ” ) as Santander must follow with UK ‘s money laundering and countering terrorist funding government to forestall this issue from go oning. [ 1 ] [ Anti money laundering and antagonistic terrorist funding ]

After a PESTEL analysis conducted on the strategic selling issues confronting Santander, the pupil developed two strategic options that could be implemented in order to undertake some of the issues identified in the PEST analysis.

8-Strategic Options Developed

There are several concern scheme options that are normally used and that have led to the success and endurance of many organisations in long period of clip from which some cognition and perceptual experience are accessible. So, the pupil draws upon some strategic options that are considered for ongoing investing, confidence and programmatic direction overtime, every bit good as the civilization and the values that the organisation demand to back up the strategic options chosen. The strategic options are: being planetary and client relationship direction.

8.1-Being Global

The planetary scheme is largely established by organisations that find it indispensable to vie successfully with other houses over an international perceptual experience in which the interrelatednesss between state markets are drawn on to organize coactions, economic systems of graduated table, strategic flexibleness and chances to act upon penetrations, programmes and production economic systems. For case, a merchandise or service established in one market place could be used in another, or a monetary value advantage can be an consequence from economic systems of graduated table created by the planetary market. In add-on, runing in legion states can take to better flexibleness every bit good as important sustainable competitory advantage. [ 2 ] [ David Aaker, Strategic Market Management ]

For case, HSBC is a planetary fiscal corporation, IKEA is a planetary retail company, and Luis Vuitton is a planetary manner trade name which means that being planetary provides purposeful benefits in a manner that the clients can entree the services of HSBC or purchase Louis Vuitton goods everyplace. So, being planetary would finally supply repute and reassurance that the house has the concern abilities to vie efficaciously internationally. [ 2 ] [ David Aaker, Strategic Market Management ]

8.2-Customer Relationship Management

The chief thought of client relationship is that cost-effectiveness could be appreciated if enduring and valuable relationships are formed among companies and their consumers, whereas trueness as ever been the forepart of industry rational, two tendencies have been the nucleus of implementing this scheme. Fred Reicheld, Don Pepers and Martha Rogers ( 1980 ) stimulated the position that costs can be reduced and net incomes maximised if clients are marketed straight every bit good as the IT infrastructures such as database direction, information excavation and web based services could be tools that help with the interactivity with mass customization. [ 2 ] [ David Aaker, Strategic Market Management ]

For case, Manchester City football Club is universe renowned for the support they receive from their fans. Man metropolis faced jobs with increasing wages and reassign fees as they needed to maximize their gross. So, that nine tackle these issues by pull offing its client relationships in a more sophisticated manner to run into its fiscal challenges. The nine implemented a smartcard system where fans could book tickets over the phone and on the cyberspace every bit good as to buy the nine goods utilizing the smartcard. This system justifies how the direction of client relationships is a strength influenced by engineering and how utile it is to undertake most issues within organisations utilizing client relationship direction. [ 2 ] [ David Aaker, Strategic Market Management ]

In add-on, a farther analysis was conducted on Santander ‘s selling scheme every bit good as strategic orientations proposed to be implemented in the long term and short term facets.

8.3-Marketing Strategy

Harmonizing to Market Orientation Article, “ a house which is characterized as market oriented could hold: developed an grasp that understands present and possible client demands is cardinal to supplying superior client value ; encouraged the systematic assemblage and sharing of information sing nowadays and possible clients and rivals every bit good as other related constituencies ; organisation broad precedence to react to altering client demands and rival activities in order to work chances and circumvent menaces ” ( Hunt and Morgan,1995 ; Kohli and Jaworki,1990 ; Narver and Slater,1990 ) . [ 7 ] [ Market orientation and dimensions of strategic orientation ]

To warrant the definition above, Santander is really much market oriented company, as most of their scheme is to develop merchandises that cater to the demands of their clients. Initially Santander bought Abbey for a clear ground that they had a sum of 18 million clients and a strong trade name. For case, Santander expertness in gross revenues brought a convincing gross revenues scheme to reconstruct Abbey ‘s gross revenues capablenesss by implementing new gross revenues channels which generated concern and increased productiveness by 40 % . Furthermore, to hike gross growing Santander segmented the merchandise scope in order to be adaptable in the progressively competitory clime. Within the deployment of its new merchandise scope, the company used the gross revenues channels to publicize the merchandises as points that clients already wanted. Therefore, market orientation is really present within the Santander scheme. [ 7 ] [ Market orientation and dimensions of strategic orientation ]

However, from the pupil ‘s point of position, Santander ‘s selling scheme is based on transactional selling where they are focused on maximising gross revenues, which in the long term could be estranging its clients due to the force per unit area put on clients to purchase their merchandises.

Alternatively, the company should comprehend a more relational relationship where the gross revenues adult male builds trust with the client so that he or she in the hereafter experience loyal to the concern and so return for future purchases. It is really of import to for client who are geting mortgages from Santander to hold a relational relationship as clients have a immense committedness to purchase a house for case.

8.3.1-Strategic Orientations

Strategic orientation is cardinal to organisational effectivity ( Evered, 1983 ) in that it represents the competitory scheme implemented by a house to make go oning public presentation betterments ( Gatignon and Xuereb, 1997 ) . Meaning that strategic orientation is a manner to unite and fit strengths, failings, chances and menaces in order to get at a figure of strategic picks from which a pick can be made. After a SWOT analysis conducted on the Santander instance survey, the pupil has identified some strategic orientations which could be considered, they are:

Aggressiveness- an indictment frequently levelled at organisations is that they tend to be by and large sulky in accommodating to their environment ( Miller and Friesen, 1980 ) . For case, Santander could make more competitory benchmarking activities, nevertheless, an aggressive demand on investing is necessary to better on comparative market portion and competitory place. A cardinal integrating would be to utilize of their resources, competencies and capablenesss as the success for sustainability in the long tally to place the client ‘s demands specifically. [ 7 ] [ Market orientation and dimensions of strategic orientation ]

Defensiveness- the dimensions of defensiveness reflects behaviours aimed at protecting house ‘s market place as opposed to any effort to develop it in manner ( Venkatran, 1989 ) . This strategic orientation is based on cost decrease and efficiency additions, for case Santander could utilize its expertness and its beginning of competitory advantage ( “ Partenon ” ) as the accent to support itself from other rivals already existent in the market. This IT system would let them to be more adaptable in the changing environment. [ 7 ] [ Market orientation and dimensions of strategic orientation ]


Furthermore, pupil used the Ansoff Matrix ( see Appendix 1 ) and Porter five forces to place in what manner Santander should to vie in its market. The Ansoff Matrix model gives the pupil a clear way of the actions taken by the directors and CEO of Santander. However, the pupil has identified that Santander took considerable hazardous schemes every bit good as schemes that were based on their internal capablenesss used to spread out Abbey ‘s corporation into new merchandise development and new markets.

The analytical attacks used were chiefly from the resource based position position because the pupil clearly identifies that Santander ‘s internal procedures, assets, resources and capablenesss are the chiefly scheme for sustainable competitory advantage to accommodate the demands of the external environment. However, different tools of the place school were besides utilised with great consequence to understand the market and calculate the hereafter utilizing PESTEL and Porter Five Forces. It is of import to advert that even though the pupil sees Santander as a resource based position ( RBV ) retail bank, the mixture of the two attacks ( the place school and rbv ) are the ultimate scheme utilized in order to avoid being nearsighted to run into the demands of the market and to accommodate to the highly changing environment.

In add-on, the schemes developed by Santander enforce critical execution options. For case, the extremist alteration of Abbey ‘s trade name value name and forced execution of the Partenon system imposes possible jobs that would be faced in the long term.

The pupil suggest that Santander uses a conceptual model in the early phases of execution in order to place existent and possible execution jobs every bit good as find how its organisation would accommodate to a new scheme.

Furthermore, Santander ‘s scheme is based on the organisation competences likewise are based on people. The pupil as identified that Santander bought Abbey to get market place in the UK, nevertheless, this scheme causes major deductions as Santander has misjudged that the Abbey ‘s staff could accommodate to the new scheme developed around the corporation, it destroyed Abbey ‘s existent value and its client relationship when merchandising mortgage. Bringing in experience people from the exterior is a possible solution when a dramatic alteration in scheme demands to be implemented rapidly, but it is besides hazardous to convey people who are accustomed to different systems and civilizations.


To reason, Santander is big retail bank runing in the fiscal UK sector with a big portfolio of service. Its IT substructure is an indispensable resource for the company as whole to vie in this industry. However, Santander lacked on a complete overview of the societal trade name impact, mean that Santander alteration Abbeys bequest trade name value to its new manner of concern and logo. Guaranting that Santander ‘s new logo and new operational construction would be good for the consumer is likely to force the company towards a critical stage and emergent jobs could come with this facet such as hapless client service. Finally, this study suggests that Santander should concentrate on service quality and high degrees of client service as it is critical for this company to last and accomplish rival advantage in winning client trueness.