The main subject of this paper is how the Bank Aljazera utilizes electronic marketing strategy. The model used in this analysis is a singular focus on the uniqueness of the Bank Aljazera in cutting a niche as far as internet marketing is concerned. The paper begins by giving an overview of the banking industry in Saudi Arabia analyzing how the banking industry finally opened up to international involvement and also competitions the industry faces. The paper is divided into sections including SWOT analysis and the conclusive summary on the main subject of the paper.
Ajazera is amongst the most important banks recognized in the Islamic state of Saudi Arabia. It mainly gives services to rich individuals and big national corporations found within the region. The bank of Ajazera was launched in 1975 and in 1992 it began to undergo a reformation process. According to the Islamic Research Institute (1988) Ajazera is Shari’ah-compliant. The board of directors of the bank of Ajazera constitutes the chairman of the board of Drectors and Executive Committee, a deputy Chief Executive Officer, four directors who are not members of any committee and four directors who are members of different committees. Bank of Ajazera has a range of services including personal banking, investment banking, business banking and other electronic services. The major competitors to the bank of Ajazera are the Al Rajhi, the National Commercial Bank also known as Alahli and Samba Bank.
The bank of Ajazera has a large customer base that is spread all over the world. The bank has online services that are convenient to its customers worldwide. Some of its internet services include online banking that works both day and knight, mobile banking and phone banking. According to Ajazera website page (2006) the bank also has a range of electronic visa cards which are in the forms of classic, gold and platinum visa cards. These cards can be used by the bank of Ajazera to transact business both within and outside Saudi Arabia. Its international electronic services have enabled it to have a big number of customers which is a source of its growth.
Banking technology still undergoes a lot of improvement. The bank of Ajazera therefore, has a greater advantage of pursuing current technology and integrating it into it services production. With the good performing Saudi Arabia’s economy there are growing numbers of people who require banking services. The bank should be able to identify the potential customers and serve them with appropriate incentives. The Islamic world is still large and presents the bank with an opportunity to grow. It should open its branches in other countries where Muslims are found and also where Shari’ah laws are recognized and practiced. It also has favorable interest rates to its customers. This is a better incentive to attract potential customers.
The short coming of the bank of Ajazera is that it is Sheri’ah compliant; this does not allow other potential customers practicing other religion to seek its services. A very large population of the world forms other religious groups which do not recognize Sheri’ah laws in their practices. This means its strict adherence to Islamic laws is a barrier to members of other religions to seek the bank’s services.
The financial performance of Bank Aljazera has not been consistent, judging from the 2008 financial report. Drawing from the financial report of second quarter of the year 2008 (Bank Aljazera, 2008) total investments dropped from SR’ 4.96billion in December, 2007 to SR’ 4.43 billion in June 2008 and credit commitments and other commitments amounted to approximately SR’ 2.22 billion in December, 2007 and the amount increased to an estimated SR’ 4.01 billion. The total liabilities as at June 2008 are more than the total liabilities as at December, 2007. This shows that the bank has to focus on reducing cost of its operations in order to survive in the ever increasing competitive environment.
The bank of Ajazera has good services to its customers. However, it does not enjoy monopoly of banking services in the market, both local and abroad. It faces strict competition from other major banks like Al Rajhi, Alahli, Samba and Riyath banks. This means to remain top in the banking industry the bank of Ajazera must continuously improve and upgrade its services to its existing customers and attract more through competitive services and incentives.
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It is a technique used to analyze the ability of the Bank Aljazera to perform and compete with other banks in the market.
Strengths of the Bank Aljazera
- The bank serves mostly the rich individuals and corporations in the Saudi Arabia, this gives it a huge capital base and raises its degree of liquidity;
- It is Shari’ah compliant and therefore has the trust and confidence of most Muslim communities within and outside Saudi Arabia.
- It has highly qualified information technologists who keep it up-to-date with current information developments as regards to customer services.
- The bank has a very high degree of liquidity and is able to meet its financial obligation over a very long period of time.
- The Bank has electronic cards that enable its customers to transact businesses both within Saudi Arabia and abroad. The cards are manufactured and operate according to the Islamic laws.
- Aljazera also enjoys good relationships with other banks in the world through enabling its customers to withdraw money from other banks. This is especially advantageous in places where the Bank Aljazera is not found.
- It has exclusive banking services for women which is consistent with Islamic laws
Weaknesses of the Bank Aljazera
- The Bank Aljazera is Shari’ah compliant; this makes its international expansion to non-Muslim states limited since Shari’ah laws are only recognized and followed by Muslims and Islamic states
- The Bank Aljazera only operates locally within Saudi Arabia and is not able to compete internationally with other banks.
- Slow services due to its large customer base
- It has few branches concentrated only within the Kingdom of Saudi Arabia.
Opportunities for the Bank Aljazera
- There are still large numbers of people seeking banking services. The Bank Aljazera should come up with incentives to attract the growing number of bank services seekers. These include those entering job market and new businesses
- There are many Muslim countries to which the bank can expand to, these also include non-Islamic states recognizing Islamic religion
- With the high rate of globalization, international businesses transactions have not yet been exhausted; the bank can take the advantage and strengthen its international involvement in the world banking industry.
- Can expand its services to include brokerage and trust fund
Threats faced by the Bank Aljazera
- There already exist strong competitors in the banking industry. These competitors provide similar products to the customers
- The possibility of political instability due to government’s involvement in international war against Israel and its allies.
- The possible breakdown in its electronic services due to human error or cyber crime.
- The recent world’s credit crunch
- The government’s poor policies on the financial sector
Analysis of the Bank Aljazera’s competitors
The Bank Aljazera has numerous competitors within Saudi Arabia alone. There are already established banks which also provide similar range of services offered by the Bank Aljazera to customers. The major competitors include but not limited to Arab National Bank, Riyadh Bank, the National Commercial Bank, Al Rajhi, Alahli, Samba, and Saudi investment Bank. Most competitors like the National Commercial Bank offer other services not offered by the Bank Aljazera. For instance other banks offer asset management services, mutual funds, wealth management and brokerage services to customers.
Another important competitor is Rajhi Bank. This is a bank that has planned to expand its services network in three years time through establishing additional ninety branches to the already existing ones. It also provides to its customers similar services given by the Bank Aljazera. So the banking sector has closely related products hence very competitive.
Analysis of the current Internet strategies of the Bank Aljazera
This process includes the bank’s internet business model, identification of internet model and finally, the evaluation of the online marketing strategies.
Internet business model
Internet marketing strategies are effective ways of attracting people to the bank’s website where there is information regarding the bank. These strategies also help in the branding of the Bank Ajazera and its products. Bank Aljezera has ensured that its website is easily available through the major search engines and has also ensured better search optimization techniques. The Bank Aljazera has also used its website to publish financial articles sought by most business entities. This helps market its online products. The bank has also a program of posting its annual newsletter on its site so that it keeps the customers updated on its activities. This reduces the cost of producing hard copies of such materials and also lessens time for their distribution (Fox, 2006).
The bank has to produce annual reports for investor information; it also has to issue bank statements to its customers. Instead of preparing several manual copies, the bank is able to issue this information through posting it on its website. This reduces the timeline for passing information to the stakeholders hence speeding up its services.
Using internet marketing allows information to reach clients in a wider geographical scale. By using internet marketing, the Bank Aljazera is able to reach a wide range of clients within a short time and reduced time. The bank has displayed the types of credit cards on its offer. This helps customers to choose which type they want without traveling to the bank. The customers are able to acquire the visa cards from any location in the world. By selling credit cards through internet the bank is able to generate revenues from all over the world thereby increasing its liquidity.
Identification of internet strategies
In this case the Bank Aljazera has determined how much of its product line is to be handled through internet. It uses certain internet elements to ensure effectiveness of its online services. The element of internet marketing is referred to as the 5 Ps of marketing otherwise known as the market mix. The 5 P strategies entails product services the bank offers to its customers, methods of promotion or ways used in the communication of the feature advantage of products offered, the place where the business offers it products on sale, how the bank prices its products to ensure it remains competitive and also the people to whom the products are offered on sale. All the 5 Ps can easily be combined in a website and still an effective feed back is achieved (Lake, 2010).
Evaluation of the bank’s internet marketing strategies
In evaluating the internet marketing strategies, we look at a number of aspects. First it is important to have information on the business performance before the beginning of the online marketing activities. This serves as the bench mark against which the benefits of internet marketing are measured. There criteria used in the evaluation process, they can be used all at once or applied selectively depending with the information sought. One way though the determination of Return On Investment (ROI). This is a calculation that shows how much is received in comparison to the amount of investment input in the internet project. The business can also check whet her there is improved customer relations; customers can be impressed by the internet services and more and more of them would appreciate and increase there demand for online services. Customer satisfaction by the online services can be found through customer survey and evaluating the out comes. On brands, the business can find out through survey on online brand awareness, increased online interactions and market share changes (Fox, 2006).
The Bank Aljazera has definitely experienced growth through its online marketing strategies. Through online sales of visa electronic and credit cards, its customers have increased and are spread all over the world. The bank is able to receive customer complains and solve them online thereby increasing customer satisfaction and confidence. There are many customers who order for visa electronic and credit cards through internet. The convenience of hiring through internet has seen the frequent offline application. The bank deals with most customers through the internet. Customers use its online services to purchase property, find range of account services and also financial advice. Through placing adverts from other businesses on its site the bank has also witnessed increase in revenue earning.
According to Al-Mudimigh (2010) electronic marketing is a process through which the information about new or existing products is passed to the potential consumers. The most modern marketing is done via electronic media or through the internet. The bank of Ajazera has been using the strategy of electronic marketing through establishment of Automated Teller Machines stations all over the country; it has established electronic visa cards that can be used by the customers to access its services through out the world. By using electronic based marketing strategy the bank is able to reach many customers within limited time and at a negligible cost as compared to the traditional marketing method.
The bank has also in introduced electronic services like pc banking, mobile banking, online banking, and mobile banking; these services are in compliant with Islamic laws (Islamic Research Institute, 1988). Through these media the customers can transact and obtain information from the bank without having to travel in person. The bank still has many growth opportunities through improving its services to the customers, giving premium interest rates, expanding to other Muslim countries, and embracing the most current e-commerce technologies. The weakness of the bank is that it is not universal. It is mainly based on Islamic laws and principles and therefore only serves the Muslim community leaving out a very large number of people from other religion; this limits its customer base and therefore unable to compete favorably in the international banking industry.
Within Saudi Arabia, the Bank of Ajazera faces stiff competition from other well established banks like Rajhi, Samba, and the National Commercial Bank also known as Alhali. The services given to customers by most banks in Saudi Arabia do not have so much difference. They give almost similar products. This tightens the competition in the banking sector. To overcome the threats of competition Ajazera bank must ensure its products remains the best in the market.
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