Introduction
Competition in the market has increased in the present times, and as a result, companies have intensified competition while others are considering expansion as well as mergers and acquisitions to provide more services and goods to outdo the competitors in the ever-competing environment. Firms in the present market environment are looking for new innovative products and ideas that can help the company become productive, cost-efficient, and more profitable to ensure stakeholders’ satisfaction. OneWest Bank division will enable it to achieve its goals. The paper aims to illustrate the new OneWest bank division, which centers on the implementation of new and innovative techniques to provide different services and products to its consumers. The division aims to address the needs of customers to achieve a competitive advantage over the organization’s competitors in the market. The essay also describes a business model as well as a vision that clearly demonstrates the organization’s position in the future. Also, the paper presents a summary of how values, mission, and vision are used to design strategic divisions in the new division. Finally, the paper defines the guiding principles and the values under the ethics, social responsibility, and culture framework.
Propose a new product or service for the new company division. The division should be customer-focused with an innovative mission statement. Ensure that you are differentiating your product or service.
The cost of engaging in business has increased in the recent past as a result of competition in the market environment, an increase in minimum wages, and the medical insurance that the government requires. It has made OneWest Bank explore other additional business operation innovations that will enable value addition to the business and help the firm meet its vision and mission statements. OneWest Bank merged with CIT Bank under the name CIT Bank. During the merger, CIT bank will have a deposit of 28 billion USD and 67 billion USD assets.
The additional finance will enable OneWest Bank to meet its financial requirements. The financial regulators’ requirement for commercial banks to meet certain capital adequacy motivated the organization to merge with another bank. After the merger, the combined assets between the two banks will be larger; hence, the firm will be able to offer its consumer loan, which was not possible before the merger because of lending regulatory restrictions based on capital base. Therefore, the merged institution will be in a position to offer new products, especially loans, to its existing customers due to the bigger capital base achieved. Also, new additional customers will be attracted to the bank because of the new products it offers. The branch banking franchise and wholesale lending of OneWest banking will combine with the national loaning platform of CIT in the new merger to form a unique institutional and retail financial services provider. Therefore, the transaction is expected to lower and diversify CIT deposit costs, be accretive to returns and earnings on equity, and broaden the products the bank can offer to its middle market clients while, at the same time, a strong capital is maintained. The new division will benefit the consumers as well as the firm (Penas, M. F., & Unal, H, 2004).
Describe how the division addresses customer needs and achieves competitive advantage.
The merger will enable OneWest Bank to provide new financial services and products to existing and new customers. The increased capital base will enable the organization to provide higher loans; hence, the customers will be able to solve their financial problems with the loans. The merger will enable the commercial and retail customers of OneWest Bank to access a wide range of beneficial financial services and products. The One West Bank will benefit from CIT’s global reach and expansive client base. The bank will be able to diversify its services as a result of economy-of-scale exploitation, benefits gained from advanced technology, and risk diversification due to additional capital mobilization (Penas, M. F., & Unal, H, 2004). The synergy will enable the merged institutions to introduce new products, consolidate the existing ones, and rebrand others for the benefit of the customers; hence, they will compete favorably in the market environment. Therefore, the above-mentioned reasons show that the bank will be able to stay above its competitors in the market as well as provide satisfactory services and products to the customers.
Create a vision and a business model for this new division that demonstrates your decision on what you want your business to become in the future.
The new business vision aims to offer IRAs, high-yield savings products, competitive deposit products, and innovative technologies. The merger between OneWest Bank and the CIT banking subsidiary led to the emergence of the business model known as CIT Bank. Small businesses and consumers enjoy wide arrays of deposits and lending. For instance, trust services, investment advisory, and private banking are examples of wealth management services and products available in the new business division (Mckeown, 2014). Moreover, middle-class individuals enjoy services such as reduced CIT deposit costs and highly diversified transactions. The flourishing of the new business model is attributed to the availability of competent employees from OneWest Bank.
The new business model will carry out banking activities on the Internet. The new technology in banking will reduce the time needed to transact. For instance, balance inquiries, withdrawals, loan repayment, loan requests, and deposits are carried out at any place as long as an individual can access the internet. Advances in technology in the new business model have enabled individuals to access banking services even if they have phones that do not access the Internet to enjoy banking services. The establishment of various branches of the new business division has reduced traveling stress among customers; hence, the use of banking services has increased (Hargadon, 2005).
Explain how the vision, mission, and value of the new division align with the company’s mission and vision.
The mission and vision of the OneWest Bank formed the basis for the creation and implementation of the vision and mission of the new division. The OneWest Bank’s vision and mission is to assist a single business or person in achieving specific financial goals. Therefore, the mission and vision of the new business are to provide the solution to customer needs through the application of emerging technologies. The new business division provides high-quality financial services and products for both commercial and retail products. Many customers are attracted to the created business model due to consumer-oriented services.
Summarize how the vision, mission, and values guide the division’s strategic direction.
OneWest Bank’s value, mission, and vision statement form the footsteps and treads for the new division’s strategic plans. The strategic plans should be aligned with the OneWest Bank. The main focus of OneWest Bank is the delivery of high-quality services and products to customers. The modern environment requires new innovations that will facilitate the delivery of quality services. Moreover, OneWest Bank recognizes customers and employees as the best asset for the company (Mckeown, 2014). Therefore, the company’s success is attributed to the employees and customers. The company also takes care of the external stakeholders such as the society. The mission and vision statement of OneWest Bank has been achieved through the use of modern technologies in its operations. Consumers can enjoy swift and affordable banking services.
Define your guiding principles and values for your division in the context of culture, social responsibility, and ethics.
The new division employees should carry out their duties under the values and ethics set by the two companies that merged. The new division and the OneWest bank’s social responsibility are similar because the created division operates financial services at a different level. The daily activities initially carried out at OneWest Bank are not similar. Therefore, there will be a need to formulate and implement a specific culture for the new division. Each business organization has experienced changes in ethical behavior, social responsibility, and culture as a result of dynamics in the new technologies. Customer services and the team are the cultural foundation for the new division. Moreover, workers can share their issues and concerns since there is an open-door policy in the new division. The new division will ensure that every single operational policy is adhered to and that there will be equal treatment of the employees. Principles and values should only impact the organization positively (Gebler, 2013).
Conclusion
The necessity to maintain minimum capital adequacy is the main reason that banks merge. Merging is a way that banks create a horizontal division that aids them in competing favorably in the market since competition is a common problem facing all corporate businesses. The new division increases customer satisfaction and increases the competitive advantages of the organization. The introduction of the internet and offline transactions in the created division is a new technology that has fostered success in service delivery and consumer satisfaction. The new services retailed at the new division are different from those of the company, hence the need for a specific culture. The standards and ethics are set according to the banking rules and regulations. Therefore, the incorporation of the technologies and the new division has enhanced CIT Bank’s competitive advantage.
References
Gebler, D. (2013). Business Ethics and Social Responsibility. Retrieved from http://managementhelp.org/businessethics/
Hargadon, A. (2005). Leading with vision: the design of new ventures. Design Management Review, 16(1), 33-38.
Mckeown, M. (2014). The Innovation book: how to Manage Ideas and Execution for Outstanding Results. Harlow, England New York: Pearson.
Penas, M. F., & Unal, H. (2004). Gains in bank mergers: Evidence from the bond markets. Journal of Financial Economics, 74(1), 150-175.
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