Market Potential Analysis for the Trade Finance Function of a Multinational Bank

What was the problem?

An international bank considered a strategic plan for its SEE local fast growing operations including an expansion into the trade finance market in a time of global economic downturn due to the current financial crises.  The problem was that the local management didn’t know what exactly was the market potential for the traditional trade finance products and services, how it was going to develop (grow or decline) and how to compete with the local leaders in the most effective way.

How was it solved?

Strateggo conducted a market potential evaluation and analysis of the trade finance industry in a key SEE EU country for an international bank with a local fast growing subsidiary.
A comprehensive dynamic model of trade finance industry including global and local trends and major competitors positioning in the country was developed. Local trends in the international trade activities were revealed, and as a result a strategic plan and implementation programme for market penetration were proposed to the client.
 

Business Simulator

Strateggo transformed the dynamic model of the market to a computer business simulator which was used to generate market potential development scenarios.

What if scenarios like product price fluctuations, alternative marketing activities, sales effectiveness and potential products/service synergies, expected range of reactions of key competitors, changes in economic environment and banking and finance regulation were explored.

The results of the different configurations of activities and what if scenarios were compared and and analysis informing the most resilient course of action related to the design and the implementation of the chosen market strategy.

What were the benefits for the client?

Evaluating trade finance market potential, its alternative scenarios for development and designing a robust market entry appeared to be a real problem for international bank, given the market and regulatory uncertainties, knowledge gaps and the shortcomings of the traditional linear strategic and market potential evaluation tools. Through this project, the client obtained a clear capability to understand the potential, development and dynamics of a new market supported with predictive market potential modelling, market scenario generation and rigorous performance indicators for optimal market strategy selection and implementation.

The simulation environemnt that Strateggo built provided more realistic projections of what could have been the effects of any decisions and actions undertaken by the client  within what-if market potential, economic and regulatory scenarios, which helped managers to gain realistic and dynamic market predictive insights for evaluating and designing a strategy that promised to fulfill their business goals.