Market research: Understanding customers and competition.
TITLE
Explain the term ‘market research’.
ESSAY
Title: The Dynamic Nature of Corporate Objectives in Banks
Introduction
Market research is a crucial aspect of any business, including banks, to understand consumer needs, preferences, and market trends. It helps in making informed decisions, developing strategies, and achieving corporate objectives. In the context of a bank, corporate objectives may vary based on internal and external factors such as competition, regulations, leadership changes, economic conditions, and societal demands.
Internal Factors Influencing Corporate Objectives
1. Leadership Changes: New senior managers may bring different perspectives and ideas, leading to a shift in corporate objectives. Their vision and goals could impact the bank's direction and priorities.
2. Organizational Culture: The ethos and values of a bank can influence its objectives, such as focusing on ethical practices, social responsibilities, or profit maximization.
3. Shareholder Influence: If a government or other shareholders have a stake in the bank, their expectations and demands may shape corporate objectives, including compliance with regulations, tax obligations, or divestment from certain activities.
External Factors Impacting Corporate Objectives
1. Regulatory Environment: Changes in government regulations can force banks to alter their objectives, such as reducing risky operations, implementing stricter compliance measures, or contributing more to the economy through taxes or lending policies.
2. Competitive Landscape: Increasing competition from ethical banks, credit unions, or social enterprises may necessitate reevaluating objectives to remain competitive, attract customers, and differentiate services.
3. Economic Conditions: Shifts in the economy may prompt banks to reassess their role in society, such as supporting small and medium enterprises, facilitating economic growth through liberal lending policies, or contributing to financial stability.
Conclusion
Market research plays a vital role in helping banks navigate the dynamic business environment by understanding changing consumer needs, market trends, and competitive forces. Corporate objectives in banks are subject to continuous evolution due to internal and external influences, and organizations must be adaptive and flexible to succeed. By acknowledging and responding to these factors, banks can align their objectives with changing dynamics to achieve long💥term success in the financial industry.
SUBJECT
BUSINESS STUDIES
LEVEL
A level and AS level
NOTES
Explain the term ‘market research’. Answers could include: • corporate objectives of a bank (if a PLC) might well be to maximise profits; grow; reduce the competition; develop new products/services; pay employees significant salaries/bonuses; expand into new markets; manipulate markets and ignore regulations. • these objectives may change for a number of reasons: new government regulations may require significant change; to curtail marginal potentially unethical activities so costs may increase. • competition might increase from more ethical banks, credit unions; social enterprise. • may be urged to pay more attention to small and medium enterprises. • if a government has a shareholding, a bank may be required to withdraw from some highly profitable activities and pay more taxes or be subject to extra taxes. • new senior managers may have different views on what the corporate objectives should be. • the economy may change requiring a bank to play a much more social role in pumping money into an economy through a more liberal lending policy. Strong and evaluative answers will recognise that the corporate objectives of a bank may change as a result of internal and external forces and that banks that fail to be adaptive and flexible may well fail.