Rbc's Organizational Strategy

Question 1. Evaluate RBC's organizational strategy . Do you think RBC is well equipped to compete with niche operators such as internet only banks.

In lieu of the changing environment – competition, policies etc, RBC started focusing on differentiation based on customer needs. Objective was to achieve customer intimacy and one possible way was through CRM which aimed at bringing together in one place a view of all contacts, transactions, accounts, and interactions with each customer.

A. Key markets:

1. Youth

2. Nexus

3. Small business

4. Farming and lifestyle agriculture

B. Growth markets:

1. Building

2. Business

3. Agriculture

C. Prime markets:

1. Accumulating

2. Preserving

RBC is trying to serve all segments without any competitor advantage. RBC’s decision to compete on all products and segments might backfire if a customer is not looking for a fully integrated back. CRM will make RBC more customer focused and will provide higher conversion ratio, customer retention and help to identify customer’s profitability over the life term. CRM will lead to streamlined and focused interaction, meaning more business revenue.

RBC is not well equipped against internet only banks as these banks have lower overhead and can provide higher interest rate to the customer. Well deployed CRM by internet only banks with 24X7 call centre and collaboration on other banks on ATMs can severely cause customer churn out for RBC.

Question 2. Do you agree with RBC's decision to withhold profitability , potential and segment information from its front level employees ?

No, RBC should not withhold profitability, potential and segment information from its front level employees. Rather they should be trained to handle all situations and different segment of customers. This will make sure that no one of the customers are ill- treated because of his segment and on the other hand, Employees will not put extraordinary efforts for a low potential customer. With proper monitoring and KRAs/KPIs, RBC will be able to good customer service as well as bring more focus on potential clients.

Question 3. Should Reich make the car loan to Niece , and if so at what interest rate ?

Niece as come as a referral to the bank with her aunt who is an important customer to the bank. From the Niece perspective who is currently unemployed but will soon join advertising firm, is looking for the best market offer