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Introduction to Retail Bank MarketSim
Mike Allen
2
Objectives
Overall objectives of school
Objectives of your first year
Your scenario
Navigation of the model/simulation/”your new reality”
Schedule, process and what’s next
3
What we will accomplish in the next 11 days & in the next 3 years.
Objectives
4
CBA Executive Banking Objectives
Retail Strategy• Customer acquisition• Branding & marketing• Product & pricing• Delivery optimization
Bank Management Strategy• Economic value & risk• Capital considerations• Analyst influences• 360° executive
management
Financial Strategy• Financial analysis• Key performance
drivers• Earnings power• Risk considerations
5
Experiential Education
• Proves multiple ways for to learn & process information
• Leads to ways to think, not how to think
• Creates ability to respond to new issues
• Full immersion without drowning
6
Experiential Education
Educational Framework
7
MarketSim Objectives
Retail Strategy• Customer acquisition• Branding & marketing• Product & pricing• Delivery optimization
Bank Management Strategy• Economic value & risk• Capital considerations• Analyst influences• 360° executive
management
Financial Strategy• Financial analysis• Key performance
drivers• Earnings power• Risk considerations
8
MarketSim Objectives
Generate insight into the interplay between key retail strategies in product lines and pricing, delivery channels, customer segmentation, marketing and branding.
Evaluate trade-offs in decision-making while solving to a business plan and Balanced Scorecard.
Inspire elevated cross-departmental teamwork and integration with the greater goals of the retail bank.
Link content from the simulation to business objectives.
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MarketSim Objectives
• Retail Banking Simulation• Live Bank Case• Tactical Case
How are we going to get there?
• Main Lecture Room• Community Rooms• Team Rooms
Lectures
Intersession Assignment
10 Your Scenario
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Your Scenario
You and your management team have just been appointed to run retail for this bank.
Prior management has elected to run it the Old Way.
You are not differentiated at all from your competition.
Your CEO has said “We need to make more money in Retail and I Hope it works out for you!”
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12
Your Scenario
You are a team of retail professionals.
You will get a lecture on a subject and then your team must decide who, what, how much, and how.
You are in a community with 4 other banks and “monoline” national players.
A computer model will be used to simulate the results of you decisions in the market.
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Your Scenario
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Your Scenario
Starting Point sent previously
Each bank starts at the same place
NOT a very well run retail bank!
Reports shows Customers, Delivery, Product, and Financial data
Worksheets provide forecast tools
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Your Scenario: RolesCh
ief R
etai
l Offi
cer
Chief
Financial
Officer
Marketing
Officer
Product Officer – Deposits Product Officer – All Other
Delivery
Officer
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How we’ll keep score
Your Scenario16
17
A stock analyst will analyze each team in a community. Results are based on balanced scorecard fundamentals.
They will then rank each team against the other 4 and compute a Balanced Scorecard Index (BSI) The analyst uses this to HYPE Stocks.
The analyst then publishes this for all their sales force to see.
Your Scenario17
Your Scenario18
19 Navigating MarketSim
Tour of the Simulation/Model
www.retailbanksim.com
20
Customer Design
Product Price
Product Revenue
Variable Costs
Income
x
=
-
=
Team selects target markets and invests in marketing
Fixed Costs
-
Team selects products and product features
Team determines pricing
Team defines distribution architecture
Navigating MarketSim
21
In case you thought this is easy…
22
Change levers, such as investing in customer marketing, effect appeal along one or more dimensions
Just Starting
Working Poor
First House
Emerging Affluent
Blue Collar
Single Income
Pre-retired
High-income M&S
Money Mogul
Downtown
Industrial
Working Class
Start UpLight In
dustrial
New Suburban
Trade-Up
Old Money
Bedroom Community
Checking Reg
Checking Gold
Savings
Investments
Loans
Target marketing decisions (e.g. to Blue Collar Segment) affect appeal across this band
Navigating MarketSim
23
Just Starting
Working Poor
First House
Emerging Affluent
Blue Collar
Single Income
Pre-retired
High-income M&S
Money Mogul
Downtown
Industrial
Working Class
Start UpLight In
dustrial
New Suburban
Trade-Up
Old Money
Bedroom Community
Checking Reg
Checking Gold
Savings
Investments
Loans
Product Change decisions (e.g. to
Checking Gold) affect product appeal across
this band
Navigating MarketSim
24
Just Starting
Working Poor
First House
Emerging Affluent
Blue Collar
Single Income
Pre-retired
High-income M&S
Money Mogul
Downtown
Industrial
Working Class
Start UpLight In
dustry
New Suburban
Trade-Up
Old Money
Bedroom Community
Checking Reg
Checking Gold
Savings
Investments
Loans
Distribution Change decisions (e.g. to Light Industry area) affect appeal to customers in cells across this band
Navigating MarketSim
25
Just Starting
Working Poor
First House
Emerging Affluent
Blue Collar
Single Income
Pre-retired
High-income M&S
Money Mogul
Downtown
Industrial
Working Class
Start UpLight In
dustry
New Suburban
Trade-Up
Old Money
Bedroom Community
Checking Reg
Checking Gold
Savings
Investments
Loans
Navigating MarketSim
26
Changing Levers Impact
27
Changing Levers Impact
28
For the next 11 days
The Schedule
7:30-9:45 Community Rooms
**7:30 Start Time**
MarketSimPresentations
4:00-5:00
Team Rooms
Tactical CasePresentations
2:00-3:00 JH 101
RegulatoryUpdate
(Hunt)
Development Team ExerciseAnalysis and Presentation
2:30-5:00 JH 101
Live Bank Case: Strategy & Wrap-up
(Allen & Underw ood)
(Hippensteel)
1:00-2:00 JH 101
IntrasessionAssignment
(Gambucci)
10:30-12:00 JH 101
Ethics(Smythe)
10:30-12:00 JH 101
(Smythe)
Ethics1:00-2:30 JH 101
Debrief
8:00-9:00
Community Rooms
Debrief
8:00-9:00
Team Exercise
9:00-10:30 Team Rooms
Decision 5Team Exercise
9:00-10:30 Team Rooms
Decision 6Team Exercise
1:00-2:15 JH 101
CRO/CFOBusiness Plan
Functional
2:15-4:00 Team Rooms
Business Plan Development
Team Exercise
Community Rooms Current Topics3:00-5:00 Team Rooms
Team ExerciseTactical Case Study2:30-4:00 Team Rooms
Performance1:00-2:30 JH 101
Saturday, July 25: No Classes
Presentations
DebriefCommunity Rooms
8:00-9:00
Decision 49:00-10:30 Team Rooms 10:30-12:00 JH 101
Integrated DecisionMaking
(Allen) (Vanderheide)
Analysis II
2:00-4:30 Team Rooms
Decision 1 Team Exercise
1:45-2:30
4:00-5:00
Team Rooms
Business Plan
12:00-1:00
LUNCH
12:00-1:00
LUNCH
12:00-1:00
LUNCH
Comm Rms
Debrief
2:30-5:00 Team Rooms
Decision 2Team Exercise
2:30-5:00 Team Rooms
8:00-9:00 JH 101
Live Bank Case:
Delivery
9:00-10:30 Team Rms
Team Exercise
8:00-9:00 JH 101
Live Bank Case:
Product
9:00-10:30 Team Rms
Team Exercise
10:30-12:00 JH 101
Product Design& Pricing
(Frisbie)
10:30-12:00 JH 101
10:30-12:00 JH 101
Delivery Strategies(Travis)
Leadership II(Callahan)
(Callahan)
Leadership2:30-4:00 JH 101
MarketSimFinancial Reports
(Smythe)
8:00-9:00 JH 101
Live Bank Case:
Customer
9:00-10:30 Team Rms
Team Exercise
4:00-5:00
12:00-1:00
LUNCH
SurfaceOrientation
9:00-10:00 JH 1018:00-9:00 JH 101
8:00-10:00 JH101
Strategic Planning Team Rooms
Team Exercise
3:00-4:00
Comm Rooms
Debrief
1:00-3:00 JH 101
Retail Bank Performance Analysis(Vanderheide)
10:00-12:00: JH 101
Consumer Bankers Association
Executive Banking School: Year 1
and Marketing
(Underw ood)
Sun 7/19
Mon 7/20
Tue 7/21
10:00-12:00 JH 101
Balanced Scorecard(Allen)
10:30-12:00 JH 101
Customer Segmentation
Welcome &Introductions
(Underw ood)
4:00-5:00 Comm Rm
SurfaceWorkshop
1:00-2:30 JH 101
Intro to MarketSim(Allen)
12:00-1:00
LUNCH
Decision 3Team Exercise
1:45-2:30
Comm Rms
Tue 7/28
Wed 7/29
Wed 7/22
Thur 7/23
Fri 7/24
Sun 7/26
Mon 7/27
1:00-1:45
JH 101
ProductFunctional
1:00-1:45
JH 101
DeliveryFunctional
12:00-1:00
LUNCH
12:00-1:00
LUNCH
12:00-1:00
LUNCH
Debrief
8:00-9:00 9:00-10:30 Team Rooms
Team Rooms Initial PlanTeam Exercise Presentation
1:00-2:00 JH 101
MarketingFunctional
12:00-1:00
LUNCH
8:00 8:30 9:00 9:30 10:30 11:3010:00 11:00 12:00 12:30 2:30 3:30 4:301:00 2:00 3:00 4:00 5:00
8:00 8:30 9:00 9:30 10:30 11:3010:00 11:00 12:00 12:30 1:30 2:30 3:30 4:301:00 2:00 3:00 4:00 5:00
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With all of the this you will need a process
MarketSim Process
Time Management
Focus via
Visual Aids
Communication
31
Your Process
Your Process
32
Analyze
Plan
ForecastExecute
ReviewRetail Bank
MarketSimProcess Flow
Your Process
33
Analyze
Plan
ForecastExecute
Review
Worksheets
Reports
Decision Inputs
Retail Bank
MarketSimProcess Flow
34 What’s Next
Your Process
35
Analyze
Plan
ForecastExecute
ReviewRetail Bank
MarketSimProcess Flow
36
What’s Next
Developing tools to analyze your MarketSim Bank Deal with any lingering issues with your Surfaces
36
2:30-4:00 JH 101
MarketSimFinancial Reports
(Smythe)
4:00-5:00 Comm Rm
SurfaceWorkshop
1:00-2:30 JH 101
Intro to MarketSim(Allen)
1:30 2:30 3:30 4:301:00 2:00 3:00 4:00 5:00
37 Finally…
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It’s okay to be a little nervous
It’s okay to get a little lost
It’s okay to get a little distracted
It’s okay to make mistakes
It’s okay to have fun!
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39 Sit tight, Dr. Tom is next!
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