A strategic plan for BPI Card Corporation (BCC)

Date of Publication

1998

Document Type

Oral Comprehensive Exam

Degree Name

Master of Business Administration

Subject Categories

Business Administration, Management, and Operations

College

Ramon V. Del Rosario College of Business

Department/Unit

Decision Sciences and Innovation

Abstract/Summary

It is believed that the Philippines is highly considered as an important market among foreign players expanding in the region. The credit card industry is growing at the rate of 30% annually. The reasons are lower rates, more features, and more competition in the credit card business.

The market perceives a growing number of Asian and US credit card issuers to enter into joint ventures to tap the vast market in the region. The Lafferty Group, a Dublin-based financial services think-tank, showed that 61% of the respondents in their survey expressed their agreement, while 20% disagreed, while 16% had no view whether Asian banks will opt for alliances.

BPI Express Credit Card Corp (BECC) is no stranger to this option. After a decade of developing and operating a proprietary system the Express Credit, it formed a merger with CityTrust. As a consequence, BPI Card Corp. (BCC) was born in 1997. The move made BCC both an acquiring bank, for its local card, and an issuing bank, for MasterCard.

Although the credit card market is growing, it faces a cutthroat competition. Despite the industry condition, new players are trying to come in because of a promising future. Credit card usage is starting to be synonymous with cash purchases. Credit card companies are now realizing the importance of positioning themselves now before the big boom.

In a user-led age, the comparison of perceived-added value of a product to its price is of most concern to the customers. Price competition leads to the diminishing of profit. Instead of engaging in a price war, the players of the industry should pursue product differentiation to sustain growth. However, differentiation would be short-lived because competitors would only imitate market leaders. Therefore, how to keep differentiation is of critical importance in marketing the product. The differentiation requires a capable information system and a reliable research and development.

In terms of marketing, frequency marketing is useful in retaining valued customers in a market with high attribution rate. Aside from acquiring new customers, the retention of current accounts is of equal importance. For the credit card business, the loss of a cardholders not only increases the cost of marketing and operation, but also reduces income.

BCC competitive advantage of convenience and savings enables it to position itself well. Its objectives of increasing gross billings aggressively instead of its cardholder base speaks of its conservativeness. But this works for them because they are able to keep bad debts to a mere 3%.

Staying ahead of the competition is the next step that BCC should think of. Its Parent Bank.

vast resources makes BCC a force to fathom. But this does not ensure the company survival. I should also keep in mind that at the end of the day customer service is what keeps the leaders from the followers.

Abstract Format

html

Language

English

Format

Print

Accession Number

OCE0018

Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

104, 21 unnumbered leaves ; 28 cm.

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