A strategic management paper on Bankard, Inc.

• Main Author: Reyes, Jesus Antonio L.
• Format: text
• Language: English
• Published: Animo Repository 2000
• Subjects: Credit cards > Philippines; Bankard; Inc.
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/3906
• Institution: De La Salle University

The credit card industry is getting more competitive as new players come in. Credit cards become a stand product offering by a bank. Given this as a fact, poses threat to all players in the industry. As the number of players increases, competition becomes stiffer and market share becomes thinner. The proponent being aware of this, formulates strategies to maintain Bankard's competitiveness, profitability and product leadership in the next 4 years. The thrust of Bankard for the next 4 years is focusing on achieving: (1) financial highlights (2) increase market share- card usage from 5% to 10% by year 2004 (3) maintain 13% market share of the total CIF population (4) maintain its position as leader in product innovation/development (5) maintain single digit delinquency rate and (6) increase market share- acquiring business form 4% to 8% by year 2004. At present, Bankard remains to be profitable company with a net income of P115.6 M (based on 1999 annual report), 23% higher then 1998. Industry wise, in terms of card force, Bankard is on the third spot with a 11% market share next to Citibank and Equitable. In terms of delinquency rate, Bankard is at par with the industry. It was able to meet management standard for delinquency rate which is 10% and below. The problem facing Bankard is card usage. Bankard is at the tail end with 5% market share-- card usage considering of it's large CIF. The major challenge for the next 4 years is to increase market share for card usage from 5% to 10% by year 2004. The major assumptions used in the paper to arrive with financial projections are the following: (1) new product initiatives like internet & mobile commerce, chip card conversion & loyalty program will be implemented (2) forecasted CIF is met and (3) economy is stable under President Macapagal's stewardship. Political crisis similar to the jueteng gate scandal won't happen under the administration. In the event that any of the assumptions fails, contingency plans are set to minimize its effect. The paper discusses the present situation of the company, it's financial performance, it's present strategies and the recommended strategies to reach the aforementioned goals. The paper also projects the company's financials for the year 2000 to 2004.