Introduction
The given paper is devoted to the investigation of Dunia’s case and the peculiarities of its functioning regarding the growing market and the UAE baking system. The company was created in 2008 after the collapse of Lehman Brothers, the U.S.-based financial services company (Venkatesan et al. 18). At the first stages of its development, the firm was a joint venture of Fullerton Financial Holdings, Abu Dhabi Mubadala Development company, and Waha Capital (Venkatesan et al. 19).
Dunia was aimed at the provision of particular services to customers working in four large segments: affluent mass market, affluent customers, mass-self employed clients, and mass salaried customers (Venkatesan et al. 19).
The company managed to attain success and turned into a potent organization with employees representing different areas of the world. By 2012, the company had 800 workers, 19 branches, efficient on-line service, and a particular call-center that helped its clients to get consultations via the Internet (Venkatesan et al. 19). The Central Bank of the UAE licensed Duina to work in the most important sectors. In such a way, now the company can provide clients with credit cards, personal and auto loans, different kinds of insurance, etc. (Venkatesan et al. 19).
In such a way, the organization became an influential agent that impacts the financial sphere of the UAE and can stipulate the appearance of specific processes in the financial market. Thus, the case suggests a detailed description of the company’s current approach and its attempts to improve the functioning by using the analytics team to investigate the sphere and attain credible information related to customers behavior, preferences, and choices.
Banking in the USA and UAE
The UAE is one of the fast-growing states characterized by the high speeds of the development of all spheres of its economy. These include not only the traditionally powerful oil industry; however, the business and banking systems also demonstrate stable growth. Thus, it could be considered a logical result of the overall evolution of the state, and it’s becoming one of the leaders of international trade.
This will not be possible without an efficient banking system that takes into account the peculiarities of the region and the way entrepreneurs prefer to do business. The Central Bank of the United Arab Emirates (Central bank) was formed in the 1980s with the central goal to license companies for investment and specific financial activities that should be conducted under the government’s supervision to ensure that the most efficient policies regulating the sphere are introduced (Venkatesan et al. 19).
To understand the unique aspects of the UAE banking system, it will be compared to the U.S. one, which is considered one of the most potent in the world. The first distinct difference is that the Central Bank has to function regarding the confederation of seven emirates with diverse needs and priorities. For this reason, the state has developed one of the most technologically difficult and, at the same time, efficient systems in the Middle Eastern region (“United Arab Emirates – Banking Systems”).
Therefore, as against the USA, there is no federal credit bureau because of the existence of seven emirates; however, a separate independent Credit was introduced. Therefore, data about infractions and other financial operations of the population of the UAE was processed be Embounce, another product offered to control the sphere.
Thus, the second difference between the U.S. and the UAE banking system is stipulated by the natures of these states economies. The fact is that the latter has the developing market, which means that the cost of financial operations and doing business will be much higher (Venkatesan et al. 21). It is preconditioned by the peculiarities of the banking systems and support they provide to growing companies or other agencies.
For instance, the credit bureau of the USA could provide organizations with information about potential customers and suggest a half-percent response rate to guarantee appropriate conditions for the development. In general, it could provide about 40000 potential clients (Venkatesan et al. 21). At the same time, the absence of the central credit bureau in the UAE introduces specific conditions for banking and business development. For this reason, the U.S. and the UAE banking systems differ in their approaches to work with companies that might demand banks services to create a client base and guarantee their further development.
Another critical difference is the ability to collect larger amounts of data about all individuals who have ever used banking services or just need a loan or other assistance. In other words, banks in the USA control a much narrower area than these institutions in the UAE, which provides them with an opportunity to monitor a particular sector, its development, problems, and tendencies. However, this task becomes more complex regarding the developing market and new trends that appear every day. For this reason, the banking system of the UAE has much broader coverage to remain efficient and provide companies with the needed services.
Nevertheless, at the moment, the UAE banking system demonstrates high efficiency and provides all companies with the services they need. Moreover, its unique character could be considered one of the factors that promote the further rise of the economic sector and cultivate a specific business culture within the state. At the same time, there are also several areas that should be improved using the U.S. banking system as an example to ensure that the most beneficial conditions for organizations development will be created.
Analytics and Customer Relationship Management
The management of any company is a complex issue that demands perfect knowledge of the firm’s current position, its closest rivals, peculiarities of customers, their buying capacity, interests, etc. For this reason, a company like Dunia obviously devotes much attention to the collection of credible data related to the current situation in the market and its tendencies. This information is used to create a strategy and guarantee the acquisition of significant competitive advantage.
However, these pieces of knowledge should be processed appropriately. For this reason, analytics becomes an integral part of any company, including Dunia, as their work creates the basis for the firm’s further evolution. These specialists could also help to determine the efficiency of a particular strategy and state whether it should be changed or not. For instance, Dunia used the cross-selling approach to satisfy existing customers and provide them with even more products and services (Venkatesan et al. 21). In other words, the company’s strategy was to sell numerous products to already existing customers to increase their revenue and guarantee the company’s further growth.
The given method is considered not so risky as acquiring new customers and which is also important; it provided all clients with enhanced security guarantees because Dunia already has the most important data about them. However, risk management demands more detailed attention because of its importance to the functioning of the company. In this regard, a potent analytical tool was needed to investigate all pros and cons of the existing customer relationship management and facilitate it (Armstrong and Kotler 24).
For this reason, Hurbas hired an outstanding analytics team responsible for the examination of cross-selling strategy, its impact on Dunia, and its comparison with the acquisition of new customers. At the same time, the enhanced credibility and objectivity of data were needed to make a conclusion about the company’s future and its strategy. As it has already been stated above, analytics plays a central role in the decision-making of huge companies and predetermines their further rise.
In such a way, the team hired by Hurbas collected data directly from the customers. It means that they worked on analyzing clients preferences and their desire to buy a new product. The presence or absence of this desire was used to either support or refute the hypothesis about the efficiency of cross-selling. Moreover, all existing customers attitudes to Dunia were collected via phone calls.
Therefore, the analytics team provided Hurbas with the data that demonstrated the efficiency of the existing approach and opportunities for the company’s further growth. The majority of customers using Dunia’s services remain satisfied with the quality and security concerns, which means that they will continue to cooperate with the company. Additionally, the exploration of cross-selling means enhanced safety measures because of the presence of data about customers operations and preferences.
Finally, it could be considered less risky than the exploration of the approach that presupposes the acquisition of new customers. For this reason, the team concluded that the company might still benefit from the usage of this approach. Investigating the case, it becomes obvious that the functioning of analytics is the central aspect influencing Hurbas decision to use the cross-selling approach as a leading one to support the further rise of Dunia. Being responsible for the company’s growth, he introduced analytic resources that would be able to ensure an objective and efficient analysis of data that will be used in decision-making.
In such a way, analytics significantly affected customer relationship management in Dunia. The company’s CEO acquired data that proving the efficiency of the approach that presupposes the close cooperation with customers and their provision with new services along with security guarantees to attain their devotion. Additionally, the customer relationship management should also be focused on increasing clients revenue with the primary aim to create the basis for the company’s further rise and development.
In this regard, Dunia’s case demonstrates that analytics becomes a fundamental part of any company and its strategy related to customer relations and management. In this case, Hurbas used the team to assess critical data and make a conclusion that will help Dunia to preserve its current status and image among customers.
Customer Lifetime Value
Considering the fact that Dunia is interested in prolonged cooperation with its clients, the issue of customer lifetime value (CLV) acquires the top priority. It could be determined as the prediction or calculation of the net profit related to the entire future cooperation with a customer (Cateora et al. 81). Numerous models are used to determine CLV and are characterized by different levels of accuracy of final data and sophistication (Dib 45).
In such a way, the given aspect becomes a fundamental concept for companies as it promotes significant alteration in their strategies to ensure that the focus will be shifted from short-time to long-time perspectives and customer relations will be fostered (Dixon and Adamson 91). This also means that companies become interested in the prolonged cooperation with their clients and a significant improvement of their financial state.
Speaking of Dunia’s case, it is critical to admit several factors. First, as it has already been stated, the company adheres to the cross-selling approach, which means that the firm distributes its services and diverse products between customers that are already known for the cooperation with Dunia. It means that there is a list of individuals or enterprises that are likely to enter into long-term cooperation with the company and remain its clients for a long period of time. In such a way, the firm becomes interested in the cultivation of the level of income and revenues as among its customers. In its turn, their stable revenues will serve as the guarantee that new Dunia’s services will remain popular and demanded.
These facts demonstrate that the company affects customer lifetime value by creating opportunities for their enrichment and empowerment. Investigating Dunia’s case, we could see the shift of priorities towards the long-time cooperation with clients and close partnership.
It could also be considered an attempt to enhance CLV and acquire a significant competitive advantage. The case also shows that Dumia was active in customer reward in progression with the central aim to encourage their cooperation with the company and long-term deals that would be appropriate for all parties to the agreement (Venkatesan et al. 22). Moreover, Dunia’s system was organized in a way to identify customers who can generate a profit or take corrective actions in case some problems between the forecast and reality are observed.
In such a way, we can come to the conclusion that Dunia belongs to companies that are interested in the creation and cultivation of a specific environment needed to increase the lifetime value of a customer and ensure that the bigger part of clients will engage in the long-term cooperation with the company. Additionally, the exploration of the cross-selling approach could be considered one of the best ways to attain enhanced CLV because of its nature and focus on the needs of already existing clients. Dunia is ready to provide the most important customers with unique conditions beneficial for their further growth and rise in their revenues.
It will also help the company to obtain extra benefits because of its dependence on CLV and net profits generated by individuals who use Dunia’s services. The given information proves the fact that the investigated company tries to increase customer lifetime value and is successful in it. However, its analytics team admits the efficiency of the existing approach and states that the further company’s rise could be associated with the cultivation of this method.
Cross-selling
Being responsible for strategic planning and the company’s further growth, Hurbas should make a difficult choice between cross-selling and new customer acquisition methods that might guarantee the further development of the company and its becoming leader in the sphere. Thus, the complexity of choice comes from the sophistication of the environment in which the firm functions.
As it we have already stated, the UAE has a growing market with the tendency towards the appearance of new threats and processes that might significantly impact the functioning of the company and result in the deterioration of its results. For this reason, Dunia carefully investigates the market and its customers with the primary aim to determine the most efficient way to preserve the competitive advantage and guarantee its further growth.
The case shows that the preference is given to the cross-selling approach as one of the most convenient and potent tools to cultivate a new culture of working with clients and attain a high level of their devotion. However, to understand the perspectives of the choice and its impact on the company, two suggested methods to work with customers might be compared.
Nevertheless, one of the cross-selling apparent advantages is its ability to preserve the existing level of customers interest by protecting their finances and suggesting new services that will help to increase their revenues significantly. In other words, using cross-selling, Dunia becomes able to enter into long-term relations with its clients and benefit from the improvement of their state. Another advantage of the approach is that it helps to ensure enhanced security for all customers because of the company’s ability to store and monitor the most important data related to financial operations and other transactions.
Additionally, the use of the cross-selling design contributes to the significant increase in the customer lifetime value, which is one of the top priorities for the company as its income directly depends on this aspect. Finally, the method might be considered useful in terms of the growing market environment and its constant changes. Having a particular client base, Dunia might decrease risks and its dependence on unpredicted alterations of the sphere or appearance of new tendencies.
As for the new customer acquisition, the method also has several advantages that were considered by the company’s top management while looking for the most appropriate solution. First, it might guarantee the constant flow of new customers attracted by the strategy aimed at the creation of the most beneficial conditions for newcomers and their operations. The number of clients is one of the most important aspects of the business world as it preconditions the level of revenue and the company’s ability to survive in difficult times. For this reason, the focus on the number of new clients instead of their quality might become an efficient measure in some difficult situations or in crisis.
Moreover, the introduction of the given approach might help to popularize the company by demonstrating its ability to help people in different situations to a greater number of potential consumers. Finally, the new customer acquisition method could also be helpful in terms of the developing market as it provides Dunia with more flexibility and cultivates its ability to survive regardless of the negative alterations in the market.
However, comparing the two methods mentioned above, Hurbas decision to focus on cross-selling should be considered the right choice. First, it helps to increase CLV, which is crucial for the company. Second, it guarantees the creation of long-term bonds with customers who use Dunia’s services. It is one of the most important aspects of the companies like the discussed one as the existence of the large client base guarantees their further rise and stable level of income. In this regard, Hurbas makes the right decision when implementing the cross-selling model to the functioning of the company and trying to attain enhanced stability in relations with customers who show high levels of devotion to the company.
Works Cited
Armstrong, Gary, and Kotler, Philip. Marketing: An Introduction. Pearson, 2016.
Cateora, Philip, John Graham, and Mary Gilly. International Marketing. McGraw-Hill Education, 2015.
Dib, Alan. The 1-Page Marketing Plan: Get New Customers, Make More Money, And Stand Out From The Crowd: success wise, 2016.
Dixon, Matthew, and Brent Adamson. The Challenger Sale: Taking Control of the Customer Conversation. Portfolio, 2011.
“United Arab Emirates – Banking Systems.” Export. 2016. Web.
Venkatesan, Rajkumar, Paul Farris, and Ronald Wilcox. Cutting Edge Marketing Analytics: Real World Cases and Data Sets for Hands-On Learning. Pearson, 2014.