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Introduction Of China Construction Bank Case Study

China Construction Bank Corporation or CCB belongs to the group of “big four” banks that have their operations in China. In the year 2015, CCB had gained second biggest position among various banks within the world. The bank operates more than 13,000 domestic branches and it also has its overseas operations in Frankfurt, Barcelona, Hong Kong, Luxembourg, Seoul, New York City, Tokyo, Kuala Lumpur, Sydney, Auckland, Brisbane and Johannesburg. The total assets of CCB in the year 2009 was around 8.7 trillion CN Yuan. The organization has gained sixth biggest position based on overall market capitalization.

Introduction Of China Construction Bank Case Study

Industry Structure And Economic Feature

 The financial sector of China is smaller in comparison to the Western economies like the United States and the history of financial markets and financial services in China is also based on the overall size of the sector. China was mainly isolated economy before the 1980s and the country has started the slow process related to economic liberation based on gradual introduction of the market economy. Shenzhen and Shanghai are considered to be the major financial sectors of China and large centres of trading are a part of these two cities. China Construction Bank is a major organization in the financial sector of China that provides huge levels of contribution towards improvement of the economy. The independent financial sector was mainly based on the operations of Chinese companies in the country and the changes that are taking place in the environment.

Industry Structure And Economic Feature

China Construction Bank Case Study Strategic

Vision and Mission Statement of China Construction Bank

The vision statement of China Construction Bank states that “Pioneer always at the forefront of China’s economic modernization, strive to be a world-class bank”. The mission statement of China Construction Bank states that “Provide better service to our customers, create higher value to our shareholders, build up broader career path for our associates and assume full responsibilities as a corporate citizen.”

China Construction Bank Situation Analysis

The situational analysis of China Construction Bank is mainly related to the overall macro and micro environmental situation within which the organization is operating and the position that it has been able to develop in the financial industry. The expansion of operations of China Construction Bank and the growth that it has depicted in the market are considered to be major factors that have an impact on the strategies that the organization aims at implementing in the sector of its operations. The impact of the strategies of China Construction Bank on the stakeholders of the organization is a major aspect of the situational analysis. The overall organizational operations and competition being faced in the industry are important aspects of the situational analysis. 

China Construction Bank Strategic

i) Business Level Strategies

             The business level strategies that have been implemented by China Construction Bank are mainly based on the best services being provided to the customers and maximizing the value offered to the shareholders along with the excellent career-related opportunities being gained by the employees. The corporate customers of China Construction Bank belong to different industries that include telecommunications, power, gas and oil and the infrastructure. The retail and wholesale products offered by the organization are focussed on the fee-based businesses that include the settlement and payment services, management of corporate treasury and personal management of wealth.

ii) Corporate Level Strategies

            The corporate level strategies used by China Construction Bank are considered to be customer-centric and market-oriented in nature and the organization is also committed towards developing into the world class group of banking services that aims at improvement of the capabilities related to value creation. The Bank aims at achieving integration of the long-term and short-term benefits and further synthesis of the objectives related to social responsibilities and business goals. The maximisation of value being provided to the stakeholders including the shareholders, associates, society and customers are also considered to be a major aspect of the corporate level strategies.

iii) Competitive Analysis and Advantage in the industry

            The business environment in financial sector of China is considered to be highly competitive in nature due to the presence of various other organizations that offer similar services. The organizations in the industry that provide similar services include Agricultural Bank of China, Chase Bank, Citibank, Industrial and Commercial Bank of China Ltd., Bank of China and JP Morgan Chase & Co. The highly competitive business environment is considered to be a major factor that has an impact on the strategies being developed and implemented by the organization.

SWOT Analysis

i) Strengths

             The major strengths of China Construction Bank have led to formation of a competitive advantage of the organization in Chinese financial sector. The effective financial position and strong name gained by the bank is an important factor that has helped the organization in developing its position in the industry. The extensive services and facilities gained by the Bank are also strengths that have been effective for ensuring that it enhance its image in the sector.

ii) Weaknesses

             The major weakness that is being faced by China Construction Bank is related to the strong levels of competition being provided by the various international banks in the financial sector. Unstable conditions of the market in the post-pandemic period have also led to formation of weaknesses of the organization.

iii) Opportunities

             The opportunities related to expansion of the operations of China Construction Bank in different countries and market can be considered by the organization for maintaining its position in the industry. Diversification of the portfolios for the customers and expansion of the Chinese economy in future are important aspects that can influence the profit margins and revenues being gained by the organization.

iv) Threats

             The threats that are being faced by China Construction Bank are mainly related to the changes taking place in the government regulations and the levels of financial crisis being faced by the organization. The slowdown detected in the Chinese economy based on changes in the policies can also have an adverse impact on the strategies of China Construction Bank and overall profitability gained by the organization.

PESTLE Analysis

Political factors – The tariffs and trade regulations are considered to be important factors that can influence the strategies of China Construction Bank. China Construction Bank has its operations in various countries and the government policies and capacities are different based on which the company can aim at developing the strategies. The political unrest in different companies can affect the operations and revenues of the company.

Economic factors – Economic aspects can affect the operations and decisions made by China Construction Bank and the countries that offer high rates of interest can attract the firm for making investments. The different factors like inflation rate, interest rate, savings rate and foreign exchange rate can have an impact on the economic condition of China and the revenues gained by China Construction Bank.

Social factors – Social factors that are mainly based on the cultural aspects and norms can influence the types of products that can be offered by China Construction Bank. The skill levels and demographics of China have an impact on the types of services and products that are chosen by China Construction Bank.

Technological factors – The technological advancements in the different countries have increased the importance of social media for marketing and promotional activities of China Construction Bank. Fast disruptions in the different industries and changes in the transportation industry have an influence on the players like Lyft and Uber.

Environmental factors – The growth in concern related to global changes in climate and increase in levels of pollution are considered to be major environmental aspects that influence the strategies of the company. The laws related to environmental pollution, waste management, water and air pollution are able to play an important role in influencing the strategies of China Construction Bank.

Legal factors – The laws related to anti-discrimination and human resources influence the strategies of China Construction Bank. The anti-trust laws being applied in the industry and consumer protection laws can also affect the strategies and operations of China Construction Bank in the financial sector of China.

Target Market Analysis of China Construction Bank

i) Demographic Characteristics of Market

            The target customers of China Construction Bank can belong to different income groups, ages or backgrounds. The corporate customers are also targeted by some of the high-value services and products that are offered by the organization.

ii) Demographic Characteristics of Market

The target customers of China Construction Bank can belong to different income groups, ages or backgrounds. The corporate customers are also targeted by some of the high-value services and products that are offered by the organization.

iii) Psychological Characteristics of the Market

            The psychological characteristics that are depicted by the target customers of China Construction Bank are mainly related to the needs and demands of individuals based on the best banking support that can be provided by the banks. The financial assistance gained during the times of emergencies are important aspects related to target customers of the organization.

iv) Behaviours of the Target Market

             The behavioural aspects of the target customers of the organization are related to the fulfilling of demands of the customers.

Marketing Mix of China Construction Bank

i) Product Strategy (Product Mix)

             The huge number of products that are offered by China Construction Bank include the national banking, corporate banking and the treasury operations. The services related to management of global wealth including residential mortgage, credit cards and infrastructure.

ii) Pricing Strategy

             The pricing and interest rates are controlled by the central authority and these influence the prices of services provided by China Construction Bank. The flexible prices of products and services of the organization can also be affected by the rates of interest.

iii) Promotional/ Advertising Plan

            Promotions and advertisements are important aspects of the strategies being implemented by China Construction Bank. Extra benefits being offered by the banks are also able to affect the banking options being provided by China Construction Bank.

v) Strategies Appealing to Market

             The leadership position that has been gained by China Construction Bank in the industry is mainly related to the focus that has been provided by the organization towards customers and the types of products that are offered to them.

China Construction Bank Competitive Analysis

i) 4Ps’ comparisons with competitors 

ii) Product – The products and services being provided by the competitors of China Construction Bank provide major competition to the bank.

iii) Price – The competitive pricing of the products offered by competitors of the organization have an impact on the overall profit margins.

iv) Place – The distribution strategies of the competitors of China Construction Bank are able to influence the reach that has been developed towards the customers.

v) Promotion – The promotional and advertisement strategies of China Construction Bank are effective for the organization to enhance its image in comparison to the competitors.

vi) Strengths’ comparisons with competitors

            Research and development are done by competitors.

vii) Weaknesses’ comparison with competitors

            Lawsuits are not always faced by other companies.

viii) Organization’s Competitive Advantage

            Competitive advantage of China Construction Bank is based on large portfolio of products.

Conclusion Analysis

Key success factors

             The major success factors that have led to improvement of the organizational position of China Construction Bank are mainly related to the enhance customer satisfaction and wide variety of the services being provided to the customers.

Problems and Issues in China Construction Bank Organization

             The issues and problems that have been faced by China Construction Bank are based on the changes taking place in the financial industry and the policies after the global covid-19 pandemic.

Financial Analysis

             The financial position and resources of China Construction Bank are based on the huge number of customers that have been gained by the organization.

Conclusion

            The overall success and improvement of revenues and profit margins of China Construction Bank have been related to the effective services that are offered to the customers and the changes that are mainly taking place in the financial sector of China.

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